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The Hispanic Population in the Fifth District: Growing and Working

Regional Matters
October 3, 2017

September and October bring us colorful leaves and cooler temperatures, but also the annual celebration of National Hispanic Heritage Month, which started on Sept. 15 and continues through Oct. 15. During this time, we celebrate the culture, history, and accomplishments of American citizens who trace their ancestors to Spain, Mexico, the Caribbean, and Central and South America.

In 2016, people of Hispanic origin accounted for 17.8 percent of the total population in the U.S., making them the largest ethnic or racial minority. In the Federal Reserve’s Fifth District, the Hispanic population accounted for 8.3 percent of the total population. The District of Columbia had the highest share at 10.9 percent, while West Virginia had the lowest share at 1.5 percent.

Growth of the Hispanic population has far exceeded that of the total population, however. Over the decade from 2006 to 2016, the average annual growth rate of the total population in the U.S. was 0.8 percent, but the Hispanic population grew by more than triple that rate, at 2.6 percent. Similarly, growth of the Hispanic population in Fifth District jurisdictions far surpassed growth in the population overall – nearly three times as fast in North Carolina and South Carolina (see chart below).

The Hispanic population in the Fifth District is significant and is growing, but a look at labor market indicators provides some insight on the disparity in outcomes for the Hispanic population relative to the population overall. Recently, Governor Lael Brainard spoke about the significance of demographic and geographical disparities in labor market outcomes for the nation's growth prospects.

One measure of keen interest is the level of participation in the labor force, defined as the number of people in the labor force (employed or looking for work) as a share of the working-age population. The labor force participation rate can reflect various factors, including the age composition of the population, which tends to skew to younger age groups for the Hispanic population.

In the nation as a whole, the labor force participation rate was 62.8 percent in 2016, and it was somewhat higher, 65.8 percent, for Hispanics. However, in the Fifth District, labor force participation for Hispanics was much higher than the rate for the broader population, ranging from 71.1 percent in North Carolina to 78.9 percent in the District of Columbia.

In addition, although the labor force participation rate in North Carolina and South Carolina is lower than the national rate for the total population, the rate for the Hispanic population is well above the national rate for these two states.

The high rates of labor force participation, by definition, suggest that Hispanics are more likely than the overall population to be working or looking for employment. It is important to understand whether high rates of labor force participation coincide with lower rates of unemployment.

The unemployment rate, the ratio of the unemployed to the labor force, averaged 4.9 percent in the U.S. for the total (civilian, non-institutionalized) population in 2016. For the Hispanic population, the unemployment rate was almost a full percentage point higher, at 5.8 percent. Across Fifth District jurisdictions, however, the unemployment rate was more often lower for the Hispanic population – and by a sizable margin in the District of Columbia, South Carolina, and Virginia.

On the other hand, in Maryland the unemployment rate was much higher for Hispanics, 5.4 percent, compared to the rate for the total population, 4.2 percent. And finally, in North Carolina the difference was minimal, with the unemployment rates nearly the same for the two groups. In addition to the high rates of labor force participation for Hispanics, it seems that the ability to secure employment is higher as well, at least for some of our Fifth District states.

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Views expressed are those of the authors and do not necessarily reflect those of the Federal Reserve Bank of Richmond or the Federal Reserve System.

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