By the Numbers

spring 2007

By the numbers

Demographic changes, education and earnings gaps between Hispanics and Non-Hispanic Whites in Idaho

Huei-Hsia Wu, Ph.D.
Boise State University



	FEATURES

Education is an important institution for social mobility and the economic growth of individuals and society as a whole. During the era of industrialization, education served a vital role in providing training and skill in operating machinery in manufacturing occupations. However, because of globalization, advancing technological innovation and the declining labor union influence, the importance of postsecondary education (particularly in science, technology and math) has become unprecedented (Hirschman 2001; Wilson 1991). Since the 1970s, the financial return on education has increased among highly educated and skilled workers, while the earnings of workers with a high school degree or less have either remained constant or declined. While research shows that the average earnings of workers with an advanced degree (graduate/professional degree) increased by more than 20 percent during this time, the average hourly earnings of an American male high school dropout decreased from $13.61 in 1973 to $9.78 in 1999 (a 28 percent decrease in earnings). Therefore, increasing educational attainment over the last three decades has led to a widening socioeconomic gap between the highly educated/skilled and those who are not.


	Francisco Herrera’s La Mexicana in Hailey serves Blaine County's growing population of more than 1,000 Hispanics. Courtesy Idaho Mountain Express.

This trend has been very discouraging for racial and ethnic minority groups nationwide. Hispanics/Latinos have been particularly disadvantaged because they have historically been left behind in educational attainment. Census 2000 statistics suggested that Hispanics throughout the nation have the lowest educational and income levels, and the highest poverty and high school dropout rates, followed by African Americans and Native Americans. Of Hispanic Americans, more than 85 percent are Mexican Americans, of whom only 46 percent have received a high school diploma and 7 percent have obtained a bachelor’s degree in the United States (Census 1970, 1980, 1990 & 2000; CPS 2006; Ramirez 2004). This is especially the case in states such as Idaho, where the populations with the lowest education are also the groups growing at the fastest rate. In 2005, the Hispanic population comprised about 10 percent of Idaho's 1.5 million residents, with a median age of 21 years old, relative to that of non-Hispanic whites (35 years old). The younger age Hispanic group suggests a rapidly growing Hispanic workforce in Idaho’s labor economy in the near future. The persistent socioeconomic inequality across racial/ethnic groups at both the national and local levels seems to suggest that most state systems of higher education have largely failed to address the social significance and policy implications related to the inequality issues.

How educated is Idaho?

Idaho’s working age population had considerably fewer college degrees in 2005 (about 26 percent, up from 23

percent in 2000) than the same group nationally (30 percent). That year, Idaho ranked 38th in the number of students who earned an undergraduate degree or higher, compared to the District of Columbia (more than 45 percent), Massachusetts (about 38 percent), Colorado (36 percent), Connecticut (36 percent), Maryland (35 percent) and New Jersey (35 percent), to name a few. Moreover, Idaho*s educational attainment was not evenly distributed across the state. The areas with the highest educational attainment are in Blaine County, followed by the Boise and Pocatello metropolitan areas and some areas in Central West Idaho and Northwest Idaho (Table 1). The percentage with a bachelor’s degree or higher ranged from approximately 38 percent to 60 percent in these areas.

Educational attainment by race/Hispanic origin

Overall educational attainment in Idaho also differs by race/Hispanic origin and nativity. Although the educational attainment for all racial/ethnic groups in Idaho has slightly increased in the last decades, Hispanics and American Indians/Alaskans still lag behind across all educational levels (CPS 2003 & 2006). Of non-Hispanic whites, the percentage of those with “no high school diploma,” and “a high school diploma or equivalent” has declined while the percentage of those with “some college education,” and “a college degree or higher” has somewhat increased.

Looking at the education of the Hispanic population age 25 and over, not only were a majority of Hispanic adult workers located at the bottom of Idaho’s educational hierarchy between 2000 and 2005, the share of Hispanic/Latino Americans with a college degree or higher in Idaho dropped. At the same time, the percent of Hispanics with no high school diploma or less increased. Hispanics with no high school made up about 42 percent of the Hispanic population in 2005, up from 37 percent in 2000. The proportion of Hispanics with a high school diploma or GED also declined, from 23.6 percent in 2000 to 23.3 percent in 2005. Furthermore, the share of Hispanics with some college but no degree dropped considerably, from about 20.8 percent in 2000 to only 13.2 percent in 2005. Hispanics with a college degree or higher made up only 12 percent of the total Hispanic population in 2000; that number dropped to 5 percent in 2005. Foreign-born Hispanics were the most disadvantaged group in Idaho, with the least amount of education and thus the lowest social standing.

These numbers suggest that the educational system in Idaho has not been able to raise the educational levels of Hispanic and Native Americans at the pace of non-Hispanic whites and Asian Americans, especially at the higher levels. The gaps in educational attainment reveal important policy implications. First, Idaho may lose ground in the proportion of its labor force with a college degree. The most significant growth will take place in the population with less than a high school education. Second, Idaho’s personal earnings will decline in the near future relative to other states due to a lack of a highly educated and skilled work force. This will also have a negative influence on the tax contributed to Idaho and its capacity to provide services such as higher education, health care, school lunch, Social Security, etc.

Earning gap based on education

Over the last decades, information-related jobs grew at a faster rate and in larger numbers than other occupations and industries, rewarding workers with higher levels of earnings. Recent empirical evidence has shown that more than two-thirds of employees working at these jobs received at least some postsecondary education between 1959 and 1997. In recent years, the largest growth coupled with the highest pay has been found in high-tech and service-related jobs (Carnevale, et al. 2001). In contrast, manufacturing and farm-related occupations have experienced a major decline. Because these jobs do not require higher or advanced education, the proportion of Hispanics and other racial groups with less than a high school education working at these occupations has increased drastically. Because manufacturing and farm work tends to pay less with little growth in earnings, the socioeconomic inequality between manual workers and those in service industries has become worse than ever. Given the increasing racial/ethnic gaps in education and the existing lower levels of earnings, as well as under-representation of Hispanic and Native Americans in higher education, it will be very difficult to reach racial/ethnic equality in the information technology and service-based sectors of employment.

          Tables 2 and 3 show average personal earnings by race and Hispanic origin between 2000 and 2005 in Idaho and the U.S. Over this time period, the earnings discrepancy between workers with a graduate degree and those without has continued to grow. The average earnings of a worker with a graduate degree is at least two to three times higher than for workers with an undergraduate degree or less. In Idaho, overall personal earnings of non-Hispanic whites in 2000 and 2005 exceeded those of other racial/ethnic groups at comparable educational levels. Specifically, the average earnings of non-Hispanic whites across all educational levels increased by a larger margin than other racial/ethnic groups, although the magnitude of increased earnings varied by educational levels and gender. The average personal earnings for non-Hispanic white workers with a bachelor’s degree or higher increased significantly, while workers with a high school diploma or less experienced no real increase in earnings, and those without a high school diploma lost ground.
          With respect to racial/ethnic earnings gaps, Hispanics experienced a growth across all earnings and education levels between 2002 and 2005. The average personal earnings of Hispanic workers with a college degree or higher was $31,836 in 2005, up from less than $15,000 in 2002. The proportion of Hispanic workers in this income bracket also increased, from 5.1 percent in 2002 to 16.2 percent in 2005. Non-Hispanic whites with a college degree or higher experienced a greater earnings increase than Hispanics, up from $42,168 in 2002 to $50,609 in 2005. The ratio of non-Hispanic whites in this income bracket grew from 24.2 percent in 2002 to 26.3 percent.
          The average earnings for workers with some college education also differ sharply between Hispanic Americans and non-Hispanic whites in Idaho. Approximately 7.6 percent of Hispanic workers had some college education and earned about $20,450 in 2002. The share of Hispanic workers with some college education increased in 2005 (18.8 percent). However, the average annual earnings for these workers decreased to $11,564 in 2005. In contrast, the percentage of non-Hispanic white workers with some college education slightly decreased (from 35.5 percent in 2002 to 34.7 percent in 2005). Nevertheless, annual earnings for non-Hispanic whites with some college education increased from $25,253 in 2002 to about $30,000 in 2005. In short, due to structural discrimination, Hispanic Americans did not earn income comparable to non-Hispanic whites for the same level of education. The earning inequality between Hispanic Americans and non-Hispanic whites was even wider at the higher and advanced educational levels.

Discussion & conclusion

The overall results of this analysis verify the demographic trends in relation to racial/ethnic composition, and educational and income attainment observed in the Idaho population. Numerous demographers and sociologists have asserted that demographic characteristics, such as age structure, educational attainment and social equality among racial/ethnic groups, have an important impact on economic prosperity. An analysis on the changing population patterns in Idaho can provide insight into demographic characteristics associated with cultural diversity, social change and the decision-making process of public policies.
The educational attainment gap between non-Hispanic whites and Hispanic Americans observed in this study is consistent with prior empirical studies that suggest a widening education and earnings gap between the highly educated and those who are not. Hispanic Americans are the fastest growing group throughout Idaho and the country, and also the most disadvantaged. These patterns are consistent with the literature that shows that the number of Hispanics with at least a college degree is three times higher than in 2002, while the average earning level is almost three times less than that of non-Hispanic whites at the same educational level.

In conclusion, the size of Idaho’s lower-middle class (lower-educated/skilled labor force) is growing drastically, while the richer middle- and upper-middle class is shrinking. Despite the overall improvements in educational attainment, Hispanic and Native Americans in Idaho still lag behind in educational attainment and overall changes in mean personal earnings. At the beginning of the 21st century, the advancement of information technology and globalization will continue to trigger a decline in the number of manufacturing jobs. To remain competitive in the global and national economy, closing the socioeconomic gaps between the dominant group and Hispanic Americans and other disadvantaged minority groups is more important now than ever. Future research in this area must focus on the growing racial/ethnic inequality in socioeconomic status, and examine public policies aimed at raising the Hispanic population’s level of human and social capital. This in turn will help close the education and earning gap in Idaho.

See an expanded PDF version of Dr. Wu's research.