Re-Examining the Hispanic Middle Class

The remainder of this paper uses a combination of income and ownership to measure middle class status, a standard which I believe is closer to the heart of the arguments about what it takes to be middle class. That argument emphasizes that middle class status is a combination of both income level and housing status. It captures the notion that both the ability to buy the middle class life style and the commitment to and integration into the local community represented by ownership, are essential parts of middle class status. Thus, this re-examination of the middle class focuses on the combination of income and ownership as essential criteria for entry to the middle class. Of course, in this paper as in other research on the middle class, the numbers and proportions which are discussed in the report, are a direct function of the definitions. Different definitions will indeed provide different estimates of the middle class. To provide the greatest possible detail, I also report the numbers and proportions by the income criteria separately.

The measure of income follows that illustrated in Figure 3: household income between 200 and 499 percent of the poverty line. Income in this range was between $16,000 and $24000 in 1980 and between $32000 and $83000 in 1999. This latter income range is quite similar to the $30,000 to $80,000 middle income range suggested by Levy (1998). He further restricted it for families in the prime earning years of 25-54 and although we will examine all household heads 18 years and older we will also consider two finer age breakdowns of the data. As discussed above, ownership can be seen as a further constraint on membership in the middle class. Other constraints could be added, pension participation, health coverage, and so on, but many of these additions are in fact highly correlated with income and ownership. 

Absolute and Proportional Gains
It is clear that there are important positive changes occurring for Hispanic households. These more constrained definitions of the middle class also show an increase in Hispanic middle class households in the last two decades. In the most recent year for which the Current Population Survey provides data, there are only a little more than 3 million middle income Hispanic households, about equally divided between native and foreign-born. The number of Hispanic households who meet the middle class criterion is smaller or course, about 1.8 million households (Table 4).  While the number of middle-income households are not that different from the Rodriguez results, the strict and more realistic definition of the middle class (income and ownership) provides a measure which is significantly less than that of Rodriguez (compare tables 3 and 4). 

Still, the results are impressive — a gain of almost a million middle class Hispanic households in a 20-year period. Although the gain in native-born households was smaller than that of foreign-born households, both groups increased their proportion of all middle class households, from 3.5 percent of all middle class households to 5.9 percent 20 years later (Table 5). This increase in both numbers and proportions suggests that the economic prosperity, despite the downturns, is lifting the new Hispanic households, both native and foreign-born. 

The relative story is also quite positive. The proportion of Hispanic native-born households who are middle income is about 40 percent and was relatively constant between 1980 and 1990. Similarly, the proportion who are middle class has been nearly constant (Figure 6). This is quite notable in the context of relatively high fertility and large household size, and even more remarkable in the light of overall declines in the overall proportion of middle-income and middle class households. The story is much less compelling for Hispanic foreign-born households who have lost ground over time. It is important to emphasize that even though these are cross sectional measures, they are measures of the level of all foreign-born households. That is, if the newly entered foreign-born were either joining the middle class or able to move into the middle class easily (say at the rates of earlier arrivals) there would be relative constancy in the proportions over time. That is not the case. 

The story about middle class penetration for older Hispanic households is remarkably compelling. While all middle-income and middle class households were having difficulty maintaining their position, older native-born Hispanic households were more likely to be in the middle-income range or the middle class with the passage of time. Keep in mind these are cross sectional analyses which will be extended with an analysis of cohorts later in the paper. The story for foreign-born Hispanic households is not nearly as positive. Younger foreign-born households are very unlikely to be in the middle class, hardly a surprising finding, but the levels are low and declining even for older foreign-born Hispanic households. They are significantly less likely to be members of the middle class. However, because this is a measure of the proportion of all Hispanics who are middle class it will reflect the very large number of less skilled workers and households who will have to move up if the gains of past groups are to be repeated. 

That Hispanic native-born households are holding their own is strong evidence of the upward economic process at work — clearly some of the native-born are joining the middle class. However, the results for the foreign-born highlight the issue of their future trajectories and the length of time it may take to make the penetration of the middle class. Foreign-born Hispanic households as a group have further to go today than the foreign-born of 20 years ago. In addition, the fact that the middle class proportion is so much lower than the middle-income group is a reflection of the difficulty of entering the homeowner market and achieving middle class status. 

Hispanic Middle Class Penetration in the Context of Middle Class Growth
To understand the levels of Hispanic penetration of the middle class it is useful to put the increases in the middle class in the context of the overall growth of the middle class. Are Hispanic households reaching parity with white native-born populations? Are the increases in middle income and middle class households, about the same as the increase in the Hispanic population as a whole? 

Examining middle-income and middle class penetration in the context of overall changes in the proportion of middle class households provides a more cautionary tale than that of the absolute numbers and the relative percentages of Hispanic households who are middle class. While the growth of middle class native-born white households was greater than the growth in the native-born white population as a whole, the evidence for Hispanic households is more mixed. Native-born middle-income Hispanic households held their own, not quite at parity, but without significant losses (Figure 7). The situation for foreign-born households is less sanguine. Fewer of them are middle class households in 1999 than were middle class households in 1970. While in 1980, Hispanic foreign-born middle class households were about a percent less than their proportion in the total population, by 1999 they were 2.2 percent less than their total proportion of all households. Of course, it is related to the very large increases of young (and unskilled) recent migrants who arrived in large numbers in the good economic times of the 1990s, but who are proportionately less likely to be doing as well as earlier arrivals. The extent to which the foreign-born do penetrate the middle class will be examined further with an analysis of cohort changes for second and third generation immigrants.

In sum, as so often is the case in discussions of the immigrant story, the outcomes are more complicated than a glass full or glass empty description. Those who would see immigration as an unmitigated blessing must recognize the implications of increasing numbers of foreign-born Hispanics who are less likely to be members of either the middle-income group or of the middle class. On the other hand the view of immigration as unmitigated disaster, must be tempered by the real gains being achieved by native-born Hispanic households. The question, as always, is about their generalizability, variability, and the changes over time.

Regional Variations in Middle Class Entry 
Regional contexts significantly impact the ability of Hispanic households to penetrate the middle class. The analysis examines four of the largest Hispanic immigrant destinations, California, New York-New Jersey, Texas-Arizona-New Mexico, and Florida. 

The numerically largest Hispanic middle class concentration is in California (Table 6) where the combined native-born and foreign-born middle-income group is moving toward a million households. Middle class Hispanic households in California are well over half a million. For both the middle income and middle class groupings, foreign-born Hispanic households are now larger in California than the number of native-born Hispanic households. The numbers are of a similar magnitude in Texas, Arizona, and New Mexico but in these states, the native-born dominate both middle income and middle class groups. The absolute numbers are much smaller in New York-New Jersey, and in that region there was an absolute decline in the number of households who were middle income and middle class between 1980 and 1990. The small recovery since 1990 has still not brought the numbers back to the levels of 1980. Florida has a disproportionately foreign-born middle class, the impact of the series of Cuban migrations to Florida beginning in the 1980s. Those numbers have grown to the point where the foreign-born middle class is almost four times the size of the native-born group.

The percentage increase in middle class numbers is quite variable, both by time and place. There were losses in New York-New Jersey, but very large percentage increases in Florida and Texas-Arizona-New Mexico in the 1990s. The proportionate gains are greater for the foreign-born population than the native-born population, but this is largely a function of the quite small initial populations. Over the two-decade period, the middle-income and middle class groups have nearly all doubled (with exceptions in New York-New Jersey); in Florida, in some instances, they have increased three times. 

There is considerable regional variation in the proportion of middle class Hispanic households across regions (Figure 8). In California, the proportions of Hispanic middle income households are high, over 40 percent, and higher than for the population as a whole. Thus, it is clear that the native-born Hispanic households are doing well in California — support for the trends shown by Rodriguez if not for the absolute levels. While the levels for middle class status are quite a bit lower than those for middle incomes, an effect of the more expensive housing market, these rates too, are not different from the population as a whole. Foreign-born households, consistent with our story in general, are at lower levels and more importantly are not maintaining position. There is a notable drop between 1980 and 1999 in the level of foreign-born Hispanic middle-income households. The proportion that is middle class is significantly lower than the proportion for middle income. New York-New Jersey has a pattern of increasing followed by decreasing proportions, and the level of middle class penetration is much lower than for the other regions especially for the foreign-born. In Texas and the nearby states, the proportional levels of Hispanic middle income are high, though not as high as in California. However, the middle class proportions are as high as in California. In Florida, native-born Hispanic households are holding their own over time and have rates of middle income and middle class penetration which are similar to rates for the society as a whole. 

Florida constitutes somewhat of an exception to the general trends in other states. In Florida the relative proportion of the Hispanic population which is middle income is as high as in California, but unlike California has not declined (the proportion who are middle income increased and then stabilized at 1980 levels). Even more notable is the fact that the foreign-born population in Florida has middle class penetration rates that are like the native-born penetration rates in California and Texas, and two and a half times higher than the native-born Hispanics in New York. This finding emphasizes the regional variation in middle class penetration and highlights the findings for California and Texas where indeed there is strong evidence of an emerging middle class Hispanic population. 

At least a part of the explanation for the strong differences in the Hispanic middle class is related to the varying composition of the Hispanic population in these states. New York has very large proportions of Dominican and Puerto Rican Hispanic populations and Florida is dominated by Cuban origin populations. The contrast between New York and Florida is clearly a contrast between relatively well-educated Cuban origin populations and much less-educated and lower-skilled populations from the Dominican Republic and from Puerto Rico. About 15 percent of the New York Hispanic population is from the Dominican Republic and another 30 percent from Puerto Rico. In contrast, Florida’s Hispanic population is approximately 55 percent Cuban. The findings about middle class penetration emphasize again the important role of human capital, the education and skills that immigrants bring with them or that they acquire after they arrive in the United States. The findings also raise the central question of the future trajectories of those without the human capital or with large families to support.

The growth in the middle-income and middle class populations is also different in different geographic settings (Figure 9). Texas and Florida had large growths in the native-born middle-income and middle class populations. However, in Florida only a very small part of that growth was from Hispanic households. In contrast in Texas, nearly half the native-born middle class growth was from Hispanic households. Both states had quite large growths of the native-born Hispanic middle class. California and New York provide other contrasts. In California there was a very small, almost non-existent middle class growth of the native-born population but a very large foreign-born increase in the middle class. New York-New Jersey is notable for the lack of any middle class growth at all. In California, more than 350,000 foreign-born Hispanic households are now members of the middle class and over 600,000 are in the middle income range. The changes in California stand out amongst the much smaller changes in the other regions. 

The geographic variability is important. It is not sufficiently informative to talk about national patterns as those patterns vary remarkably from state to state. To reiterate, while in Texas the growth of the proportion of the native-born Hispanic middle class was equal to the total middle class growth, in Florida the Hispanic middle class growth was only a few thousands and was dwarfed by the growth of the non-Hispanic native-born middle class growth. 

In the context of the middle class as a whole, Hispanic households are doing well. They are more than 17 percent of the middle class population in California (adding native-born and foreign-born together) and 21 percent in Texas (Table 7). The proportion is nearly 12 percent in Florida but it is negligible in New York-New Jersey. The proportions are high for the foreign-born population in California and Florida though as the Hispanic population is a very large proportion of all foreign-born in Florida and California these proportions are not equivalent. It is still true that these groups have not reached parity with their proportion of the total population. Currently California and Texas are respectively more than a fifth and a quarter Hispanic, but the levels for the middle class are still 3 or 4 percent behind those levels.