Latino Immigrants' Income Is Rising

Construction Boom Pushed Low-Paid Workers to Higher Earnings, Study Says

Latino immigrants have steadily moved out of jobs paying the lowest wages and into middle-income employment in the past decade, helped by the boom in the construction industry, which hires millions of foreign-born workers, according to a study released yesterday by the Pew Hispanic Center.

Recent Latino immigrants are moving up the ladder just as foreign-born workers did generations ago, said Rakesh Kochhar, author of the study.

"Foreign-born Latino workers are making progress, and if that appears contrary to our perception, it really has to do with the sheer growth in their numbers," Kochhar said. "Their numbers are so large that we are distracted. In relative terms, they are progressing out of the lowest-wage work and progressing toward middle-wage work."

Foreign-born Latino workers made up 36 percent of laborers earning less than $8.50 per hour in 2005, compared with 42 percent earning low wages in 1995, according to a Pew analysis of U.S. Census data. Kochhar said that the advancement of Latino immigrants to middle-income scale was faster than pay increases among native-born workers. He attributed Latino immigrants' rising incomes to the construction boom, which has since slowed down.

Even as many Latino immigrants moved up the pay scale, other foreigners replaced them at the bottom. While the number of Latino immigrants earning "middle income," defined as $8.50 to $16.20 per hour, increased to 2.6 million, there were 3.3 million earning a lower wage, primarily in the service industry as janitors, lawn-cutters and dishwashers.

The number of Latino immigrants on the low end of the wage scale grew by 1.2 million workers, but that was about 600,000 fewer than would be expected based on the growth of the foreign-born Latino population, Kochhar said.

However, the stagnation of the real estate industry, rising interest rates and slowing construction could soon affect the immigrant workers who benefited from the boom in the late 1990s.

Lindsay Lowell, director of policy studies at Georgetown University's Institute for the Study of International Migration, said: "There was strong immigration, and it was in response to wages. There was a demand for these workers."

With the construction slowdown, that demand could wane.

"The shoe that may drop is the construction slowdown, though we haven't seen signs yet," Kochhar said.

Foreign-born Latinos make up 5.8 percent of the population but account for 7.2 percent of the country's workers, Kochhar said. The study also notes that Latino immigrants who arrived in the past few years are older, better educated and less likely to be employed in agriculture and other low-paying jobs than previous cohorts of foreign-born workers.

And the study noted that some immigrants boosted their incomes by opening businesses, moving from the lowest-paid ranks of the service sector to wealthy entrepreneurs in short order.

Peruvian immigrant Giovanni Nicolacci, 46, arrived in the Washington area two decades ago with a few hundred dollars and a degree in hotel business management. In eight years, he went from busboy to owner of a business that supplies military equipment to the government. Last year, the company had annual revenue of several million dollars. Now he lives with his Argentine wife in a Chevy Chase condo with a Jacuzzi tub in the bathroom and two Mercedes vehicles in the garage.

"Everything that I have achieved here, it would have taken me three lifetimes to achieve in Peru or anywhere else," Nicolacci said.

The study also shows that Asian immigrants significantly boosted their presence in the high-wage workforce. The number of Asian immigrants earning more than $24 per hour nearly tripled, to 1.2 million in 2005 from 451,000 in 1995.

Minh Nguyen, who immigrated to the United States from Saigon on a boat with his parents when he was 8, said his mother made light switches in a Philadelphia factory while his father worked as an engineer. Nguyen, 34, and his brother attended college, where both studied engineering. After working in corporate America, they started a software engineering business, Millennium Enterprise, in Fairfax. Last year, the Nguyens won their first federal contract, to design a database portal for a government agency, and they expect the firm to book more than $300,000 in revenue this year.

The study counts legal and illegal immigrants and does not address American-born workers displaced by immigrants. There is debate among economists over how much immigrants compete with native-born workers. George J. Borjas of Harvard University has concluded that immigration depresses the salaries of American-born workers, particularly those with low education levels, but a Council of Economic Advisers report found that, on average, U.S.-born workers benefit from immigration.