Underemployment and economic disparities among minority groups

Abstract

This article examines the interracial/ethnic differences in the United States in labor force positions among Puerto Ricans, blacks, Mexicans, Cubans, Chinese, and Japanese. The analysis is based on the Labor Utilization Framework developed by Hauser, Sullivan, Clogg, and others and the 1980 US Census data. Our results show that these minority groups differ in the ways in which they are utilized in the labor Iorce and that differential economic consequences are associated with interracial/ethnic differences in labor force utilization. In general, over 40 percent of the members of each of the minority groups are underemployed in the labor market in one way or another, though the ways in which they are underemployed vary. In particular, blacks and Puerto Ricans are hardest hit by labor force nonparticipation and by high rates of sub-unemployment and unemployment. Mexicans do not seem to be particularly hard hit by joblessness, but they fall disproportionately in categories of partial or low-wage employment. Chinese are most disadvantaged in adequate employment, but this disadvantage seems to be offset by high rates of low-wage employment and occupational mismatch. Cubans and Japanese have a relatively higher rate of adequate employment than other groups, and, at the same time, they manage to bypass the disadvantages of joblessness through occupational mismatch. These patterns of interracial/ethnic disparities persist in the labor market even after controlling for education and age. Another significant finding is that some forms of underemployment offer fewer disadvantages than others. Occupational mismatch, for example, may be an effective way to bring about substantial positive economic consequences.