California Labor Force Trends

Sectoral growth is occurring most rapidly in many areas of the economy which have not traditionally employed Latinos. In California, employment in large-scale assembly line manufacturing has grown significantly more slowly than employment in information, service, and high technology activities. (See Table 5.3.) Declines are reported in high-wage sectors of manufacturing and government. But at the same time, California agriculture has become more labor-intensive and has stimulated the growth of' Latino farm worker populations in a number of small rural communities.

More than any other group, the Mexican and other Latin American origin workforce is concentrated in such blue-collar occupations as operators, laborers, craft and low-wage service Workers. One recent UC study suggests that over 60% of the second and third generation Mexican American labor force has been employed in such blue collar occupations from 1940 to the present, a level higher than that of any other single group in California's population. When compared to the general population, wage rates remain low for this group across major economic sectors; and occupations for a large proportion of third or more generation Mexican Americans are concentrated in declining blue-collar manufacturing employment. (See Table 5.4.) While the large proportion of unskilled or low-skilled immigrants in the available data (50% of California's Latinos are foreign born) may explain some of this stratification, third and more generation Latinos continue to possess significantly lower rates of educational and professional attainment and lower levels of household income.

Projecting data from California's Department of Finance, the Center for the Continuing Study of the California Economy reported in January 1988 that U.S.-born and immigrant populations of Latin American and Asian origins will likely represent more than seventy percent of overall labor force growth in the 1987-1995 period, with Latinos accounting for nearly forty percent of this growth. (See Table 5.5.) Immigrants from Mexico and Latin America will contribute much of the increase in the Latino labor force during this period.

Women will constitute more than fifty-five percent of the increase in the labor force in the coming eight years. Based on 1980 census and 1986 federal Current Population Reports on household income by group, working women of Latin American origin are concentrated in the lowest-paid jobs to a degree higher than any other group in the State. In California, 53 percent of all Mexican origin women were wage earners. The incomes of Latinas remained stable in the 1970's following gains over the previous decade. But among those employed full-time, Latinas as a group experienced declining incomes. Latina wages remain considerably less than the relative incomes of Anglo women. In the 1980-1985 period, for all Latin American origin groups, Latina employment increased in low-paid service fields, while decreasing in the higher paid occupations of the service sector. According to 1987 current population data for the United States, 48 percent of Mexican origin female headed households had incomes below the poverty level. (See Table 5.6.) Despite the fact that the 1970s witnessed some gains of educational attainment for Latin American origin females, the slowest gains in this area were made by college educated Mexican-origin women.

Much recent analysis indicates that a large number of those entering California's workforce over the next eight years will lack the skill level or education to participate fully or competitively in the sectors of projected growth. This is especially the case with both native born and immigrant Latino workers, whose level of educational achievement and household income lags significantly behind that of State median levels. (See Tables 5.7.1 and 5.7.2.) Without steps to improve education and training for this group, a substantial number of California's working population will remain characterized by inability to advance beyond the lowest-paid levels of the labor force and will experience further occupational segregation. This challenge is made all the more urgent given the fact that Latinos will constitute the single largest portion of labor force growth in the younger age groups and will account for the foundation of California's future labor force. (See Table 5.8.)

These facts raise many complex questions about California's future economy and the factors which influence the composition of the labor force. Perceived inadequacies of the labor force could lead California to lose jobs to other areas, as companies relocate or make new investments where workers may reflect higher levels of educational attainment or skilled job training. But researchers, labor economists, and policy analysts disagree about the extent of the divergence between the abilities of the labor force and the level of skill and background required for jobs in California's growing economic sectors. Most agree, however, that current trends, without enlightened guidance, may perpetuate economic inequalities along lines of national origin and racial distinctions. In particular, native born Latinos, in relative terms, have remained at a disadvantage to the general population, characterized by lower incomes and by employment concentration in areas of decreasing opportunities such as manufacturing and other forms of more traditional blue-collar employment. For immigrants and multiple generation residents alike, low levels of educational attainment for Latinos further limit job or business opportunities in the State's economy. Unequal access to education or employment as a result of discrimination is undoubtedly a factor in the patterns noted above. Yet current data fails to explain adequately the specific relationship between discrimination and the over-representation of Latinos at the lower end of the employment spectrum.

The increasing disparity between projected demand for skilled and educated workers and a poorly educated, limited skill labor force requires further examination in order to better address the State policy concerns it raises. Four approaches can be defined. One suggests that a concerted effort to improve education and job training services by government and the private sector would serve to raise the skill level of the working population. Another approach emphasizes the promotion of small business and basic manufacturing industries to help provide entry level employment to those with lesser skills. Third, enforcement of fair wage and labor standards needs to be assessed to determine whether effective enforcement can mitigate the effects of discriminatory practices and violations of minimum wage and other legal protections for low-wage workers, or whether specific policies may encourage discrimination. A recent GAO report suggests that the 1986 Immigration Reform and Control Act (IRCA) may have increased employer hiring discrimination against prospective U.S. born Latino workers (U.S. General Accounting Office, Immigration Reform: Status of Implementing Employer Sanctions After Second Year. -GAO/GGD 089-l6, November 1988.). Also, the promotion and hiring practices of private firms need be assessed to determine the extent of de facto discriminatory practices. Finally, State housing, education, and transportation policies may have served in the past to limit economic opportunity for Latinos. Based on a thorough review of these policies, new policy initiatives could be developed to expand opportunities for all groups.

Low-paid, easy entry, and temporary employment, often found in smaller firms or sub-contracting arrangements, will be available to Mexican Americans, Mexican and Central American immigrants and other Latin American origin workers. This type of work rarely results in significant mobility. Indeed, this trend can lead to the development of a semi-permanent underclass with clear Latino, Black, Asian, or Pacific Islander ethnic boundaries. At the same time, there will not be sufficient replacement of non-Latino whites in management, professional, administrative, and highly skilled jobs. As such, Latinos as a group will not be in a position to move up" without a consistent and coherent effort to improve educational and training opportunities. (See Table 5.9.)