- At Globe Live Media we explain why Latinos would be the most affected by a recession in the US, according to the analysis of financial experts from the Wells Fargo bank
A special report prepared by financial analysts from Wells Fargo, one of the largest US banks in the country, indicated that, in the event of a modest recession in 2023, Latino or Hispanic workers in the US would be among the groups most affected by unemployment.
“If our forecast of a modest recession in 2023 comes true, Hispanic workers would be disproportionately affected,” the Wells Fargo report indicates.
To justify this trend, analysts at this financial institution indicated that Hispanic unemployment grows disproportionately during periods of poor US economic performance.
The data for 2010 seem to demonstrate this, since in that year, Hispanic unemployment increased from 8% to almost 13%, while unemployment in non-Hispanic communities only increased by 5%.
Why would Latinos be the most affected in the event of a US recession?
During the most recent periods of recession in the US, Hispanic workers have been highly affected by unemployment due to the labor composition of this sector of the population.
According to data from Wells Fargo, Hispanics make up about a third of the workforce in the construction industry, which has seen severe job losses during previous recessions. It should be noted that this sector is about to suffer difficulties due to its important relationship with interest rates.
The Wells Fargo report clarifies that the construction sector is probably not at its best in the short and medium term due to the strong monetary policies carried out by the Federal Reserve (Fed) to reduce the high inflationary levels in the country.
Among the states in which Hispanic workers would be most affected is Texas, an entity that has a large number of Latinos who could lose their jobs due to the decline of the construction industry.
Likewise, Hispanic workers also find themselves in other industries that have an exacerbated sensitivity to the various fluctuations or economic cycles in the country, such as transportation, storage, and the manufacture of non-durable consumer goods.
US recessions tend to hit workers with less work experience harder
Another important factor to keep in mind is that Hispanic workers are statistically younger than non-Hispanic workers. This is a point that plays against the Latino community, since recessions tend to affect workers with less work experience more strongly.
According to data compiled by Wells Fargo, Hispanic workers are 30 years old on average, which is 10 years younger than non-Hispanic workers.
Also, less experienced workers have historically had a harder time finding employment in weak labor markets.