Fight or Flight: Hispanic Migration during the Recession.

Over the years, a strong, stable economy has attracted a large number of Hispanics to migrate to the United States. With the economy in recession, some hypothesized that Hispanics would grow frustrated and return home. Despite the downturn, Hispanics are not leaving the U.S.; it is clear they are in the United States for more than economic reasons and have found ways to weather the storm and see the economy recover.

The job market for Hispanics in the United States is bleak. As of March 2009, the Hispanic unemployment rate rose to 11.4%, a quarter higher than the general population’s 8.5% rate (1). Construction, an industry in which Hispanics make-up nearly 30% of the workforce, lost 1.3 million jobs in the first 5 months of 2009 alone. (2)

With Hispanic unemployment so high, a drop in the U.S. Hispanic population would be expected. According to the Pew Hispanic Center, the United States typically attracts Hispanics when its economy and job market are growing and loses Hispanic residents when both shrink in recession.(3) The current economic cycle, however, has been different: Hispanics in the U.S. are staying at a higher than average rate. The U.S. census reports that 22% fewer Hispanics left the U.S. to move abroad in 2008 than in 2007. (4) Reports from Latin countries on return immigration support the census’ measurement. The Mexican Immigration Institute reported that the number of Mexican-Americans that returned to Mexico in winter 2008 was also 22% less than the same period in 2007. (5)

A growing retention rate in a shrinking economy implies Hispanics have reasons for staying in the U.S. that defy economics. A closer look reveals one reason they’re staying is that they have become attached to U.S. and the lifestyle it has to offer them and their families. The U.S. is also an attractive place to be as times grow increasingly tough worldwide. Third, Hispanics are discovering they are well equipped to ride out the recession and enjoy life in the U.S.

Many Hispanics are staying in the states because of their children. Statistically speaking, Hispanic families are larger and have a stronger influence on the individual and his choices than in the general population. Hispanics have more children than most Americans; 57% of Hispanic households have children, which is 66% higher than general population homes. For many Hispanic kids, the U.S. is the only home they know: 73% of undocumented Hispanic immigrants have a U.S.-born child. Hispanic parents value services like free education and healthcare that the U.S. offers children. In many cases, these services are not available to them at home.

Optimism towards the future is another key factor in keeping Hispanics in the states. According to a recent Pew study, 77% of Hispanics believe their economic circumstances will be better in 10 years than they are now, compared to 71% of whites. Their long-term outlook is even more buoyant. When asked whether their children would have an easier or harder time moving up the income ladder, whites are pessimistic with over half saying it will be harder to move up the income ladder, just 41% of Hispanics feel the same. (6)

The global nature of this recession is also influencing their decision; home offers no reprieve from tough times for Hispanics. The International Monetary Fund predicts Latin America’s economy will shrink at pace with the American, Japanese and European economies in 2009.(7) Hispanics are willing to face a challenging economy in the U.S. rather than return home to face the same there.

Immigration reform and enforcement is also playing a role. Hispanics who may want to leave are staying because getting back into the United States is becoming increasingly difficult. Immigration has become a hot political topic in the United States. Both parties have called for immigration reform that would likely make reentering the United States difficult. Hispanics who used to move between the states and home based on economic conditions find it more difficult to do so now.

As jobs go, Hispanics are often multi-skilled workers who have a more flexible approach to earning income, a characteristic that gives them a competitive edge. California journalist and second- generation Mexican-American Gustavo Arellano explained Hispanic immigrants’ approach to the job market in a recent interview, “I hold a Masters in Latin American studies. But my dad, he has a 4th grade education and came to this country in the trunk of a Chevy. If anyone needs a carpenter, a plumber, an electrician, a swimming pool cleaner, a truck driver – both short haul and big rig – then you can contact Lorenzo Arellano. He’s much more likely to find a job than me.” (8)

From an investment standpoint, many Hispanics were fortunate to have avoided the housing market meltdown. Owning a home is the largest investment most Americans will ever make. Hispanics, however, are 28% less likely to be homeowners than the general population. (9) Not being tied to a mortgage or devalued home makes Hispanics financially nimble.

Hispanics’ collectivist attitude about cohabitation is another housing advantage. Hispanic homes are often multi-generational and multi-income; this arrangement is an economical way to pool resources and reduce cost. The average Hispanic household has 26% more residents than a general population home (3.1 vs. 2.3) . (10)

The recession is not having the effect on Hispanics that some expected. Instead of leaving the United States when the economy got tough and jobs grew scarce, Hispanics decided to stick it out like most Americans. Hispanics have laid roots in the United States and have become an enduring thread in the fabric of American society. They will weather the storm alongside everyone else to see economic growth and prosperity on the other side.

By JACOB PEREZ and ALEX CARANTZA, account planners at The Vidal Partnership

1 -US Bureau of Labor Statistics March 2009
2 -US Bureau of Economic Research
3 -Sanchis, Eva. “Recession Hits Home, From Abroad.” World Policy Institute (2009) 53-59
4 -Current Population Survey, March 2008
5 – Instituto Nacional de Migración
6 – Pew Hispanic Center 2009
7 – IMF, “World Economic Outlook” April 2009
8 – “Is the Recession Changing the American Dream?” Talk of the Nation Neal Conan, March 18, 2009
9 – Simmons 2008
10 – Simmons 2008