Insights on the Hispanic Labor Force

Isabel Soto Economic Prosperity

Insights on the Hispanic Labor Force

Economic Impact of Hispanic Workforce: Hispanic workers and business owners play a vital role in the U.S. labor force, with a high participation rate and significant contributions to economic growth. Current policies potentially limit worker freedom, increase business costs, and could disproportionately affect the Hispanic labor market. Ensuring access to work, reducing regulations, and supporting small businesses are crucial for a strong labor market and economic recovery (Dubina 2021; BLS 2024).  


Chaotic Unemployment Data: U.S. year-over-year unemployment claims fluctuated in 2023, Initial claims dropping 15.6% below the previous January, accelerating to 22.7% by June, then evening out by year’s end. Continuing claims fell 8.8% early, soared 30.9% above 2022 levels by July, and finished 10.5% higher than 2022’s end. Overall unemployment rose 0.3% (U.S. Employment and Training Administration 2024).  

Hispanic Unemployment Disparity Continues: Through 2023, Hispanic unemployment consistently outpaced the national average by 1%, with December witnessing a 5% unemployment rate among the Hispanic population (BLS 2024), underscoring a persistent disparity.  

Leisure and Hospitality Down: The changes in leisure and hospitality spending disproportionately affected Hispanics who comprise 25% of that sector’s employees, indicating that sector-specific vulnerabilities have the power to disproportionately harm Hispanic employment.  

Construction Industry Resilient: The construction sector displayed robust growth, however, adding 448,000 jobs since February 2020. Notably, an estimated 153,216 of these roles were filled by Hispanic Americans, signaling significant employment opportunities in this industry (Soto 2022; BLS 2024).  

Labor Force Participation

LFPR Explanation: U.S. labor force participation continues to dip from pre-2000s highs. Reaching 62.5% in 2023, still below the immediate pre-pandemic level, 63.3%. Hispanic participation, consistently above the average and peaking at 70.3% in 2001, also hasn’t rebounded to pre-COVID levels. Overall, by the end of 2023 the labor market saw a deficit of 2.1 million workers, including 530,000 missing Hispanic workers compared to the pre-COVID labor force (BLS 2024, LIBRE analysis).  

LFPR Struggles to Return to “Normal”: In 2023, both overall and Hispanic LFPRs showed minimal improvement towards pre-COVID levels, with Hispanic LFPR initially increasing then declining and the overall rate stable at 62.6%. This highlights the importance of lowering labor market barriers and improving work access for economic stability (BLS 2024).  

Curious Gap Persists: Post-pandemic, a significant widening in the gap between job openings and hires signals labor shortages, potential wage inflation, and strong demand for workers, underlining market inefficiencies possibly caused by skills mismatches and highlighting the need for regulatory reform, workforce upskilling, and immigration adjustments (Duval et al 2022).  

Bottom-Up Solutions Emerge: Recent efforts to raise LFPR include employer-community college partnerships and industry-specific training programs, with 55% of companies eliminating degree requirements in 2023 to broaden the talent pool (Crist 2023). Despite these measures, policy decisions have limited work access and flexibility, challenging small businesses and potentially increasing consumer costs.  

Policy Changes

Labor Policy Disruption affects Hispanics Disproportionately: Revised joint employer standards (moving from direct to potential control) and stricter “independent contractor” criteria threaten to raise liabilities, operational costs, and litigation for franchises and service sectors, while also burdening employers and limiting flexibility for the 70 million independent workers, particularly impacting workers of color and those requiring flexible work arrangements. LIBRE Initiative analysis found that 26 percent of all independent workers are Hispanic and that nearly 30 percent of Hispanic-owned, employer businesses are franchises (IFA 2022; Holtz-Eakin 2024; U.S. Congressional Record 2024; Lafolla 2024; Soto 2020; Soto 2024; Braga 2023; MBO Partners 2024).  

Immigration Rule Changes: Proposed rules limiting H-2A and H-2B visa use could exacerbate labor market gaps, increasing costs for employers and restricting access to these temporary work programs. High regulatory costs and complex processes deter small businesses and family farms, potentially reducing legal pathways for economic migrants and impacting U.S. agriculture and small businesses negatively (Federal Register 2023; Garza and Peak 2023; House Committee on Agriculture 2023; Soto et al. 2021; Bier 2023).

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