Of the 24.6 million Hispanics1 in the labor force, 13.5 million, or 55%, are STARs. An additional 25% of Hispanic workers lack a high school diploma. The Hispanic workforce is younger and has fewer years of educational attainment than the rest of the workforce.
Hispanics make up 18% of the 77 million STARs in the United States, and while Hispanic STARs are represented in every occupation, they are overrepresented in lower-wage jobs. Hispanic STARs earn a median wage of $16.80/hour, 10% less than non-Hispanic STARs.
This chart illustrates the disparity. At the top, we see occupation categories where Hispanic STARs are overrepresented. Five of the top six are shaded purple, showing that they pay below the overall median wage for STARs. At the bottom of the chart, the occupations in orange pay higher than the overall STAR median wage and have lower representation of Hispanic STARs.
Even in Construction and Extraction, a higher-wage occupation category with a high representation of Hispanic STARs, we see an overrepresentation of Hispanic STARs in lower-wage jobs like construction laborers (36% of STARs are Hispanic) and a significant underrepresentation in higher wage jobs such as building inspectors (14% of STARs are Hispanic).
Our research shows that many low- and middle-wage jobs provide on-the-job skills that are transferable to higher-wage work, paving the way for skills-based transitions that offer wage gain.
The tool below illustrates the opportunity for such skills-based transitions for Hispanic STARs. We identified the ten highest volume jobs for Hispanic STARs (their “origin” job) and for each, we show feasible skills-based job transitions that offer a wage gain of 10% or more. Each of these job transitions has been observed for workers in the labor market, with marker size illustrating the number of people who have made these exact job transitions over the past 10 years. We plot these “destination” jobs based on their potential wage gain, as well as the number of STARs already employed in these roles.
The tool shows that Hispanic STARs have more mobility than one might expect given high occupational segregation illustrated above. We see a large number of transitions to higher wage jobs in the trades – such as construction laborer to insulation workers (offering a 16% wage gain), but also see transitions from customer service representative and front-line sales supervisor to higher wage jobs in sales and management. These latter transitions, however, are often hindered by formal educational degree requirements.
When we look at all jobs currently held by Hispanic STARs, we find that for 3 million (nearly one-fourth) of the higher-wage, skills-based job transitions that should be available to Hispanic STARs, employers typically choose to require a four-year degree when making hiring decisions.
These degree requirements hinder mobility for STARs who have skills to move into higher-wage occupations but lack the formal credentials often expected by hiring managers. For instance, as illustrated, around 85% of Hispanic STARs currently working in management (in jobs such as food and service, construction, and property managers) will face degree requirements when trying to move into similarly-skilled but higher-wage work.
This dynamic reinforces the occupational crowding of Hispanic STARs in lower-wage work. Workers who manage to navigate the hiring process to transition into roles that traditionally require a four-year degree would earn a median hourly wage of $41 (a median wage increase of 62%), compared to a wage of $24 (a 47% increase) for Hispanic STARs who move up the economic ladder, but remain in roles that do not have degree requirements.
As employers commit to diversity and inclusion, they must reexamine how they assess talent. 13.5 million Hispanic STARs – more than half the Hispanic workforce – are often overlooked and concentrated in lower-wage jobs, in part due to employers’ educational pedigree requirements for career advancement. However, that doesn’t make these workers low skilled. Employers can increase mobility for Hispanic STARs if they focus on the skills these workers demonstrate on the job.
Prioritize skills over degrees. A four-year degree requirement screens out 80% of Hispanic workers, many of whom have skills developed through alternative routes, particularly on the job.
Make GED and certification programs accessible to Hispanic workers. Lower educational attainment among Hispanic workers can hinder their ability to signal their job readiness to potential employers. Employers can open pathways for Hispanic workers by helping them get the credentials that open doors.
Expand job sourcing to include less traditional routes. As shown above, many low-wage roles have similar skill sets to higher wage roles. Recognize that low wage does not mean low skill and recruit and source talent in ways that support skills-based mobility.
The definition of Hispanic used in this analysis is based on the American Community Survey (ACS) classification, which is in turn set by the U.S. Office of Management and Budget (OMB). OMB defines “Hispanic or Latino’’ as a person identifying as Cuban, Mexican, Puerto Rican, South or Central American, or other Spanish culture or origin regardless of race.