Powering Greater Boston's Economy

Powering Greater Boston's Economy

Why the Latino Community is Critical to our Shared Future

Overview

Boston’s prosperity is tied to the rapidly growing Latino community, which currently makes up 20 percent of our city’s population. Boston’s Latino community is a source of human capital with many opportunities for development. This report is divided into two sections:

ASSETS:

Contributions of Latinos to Boston’s Population and Economy

OPPORTUNITIES:

Workforce and Business Development Trends

The Assets section details the contributions Latinos have made to Boston’s population and economy. Latino population growth accounts for 92 percent of Boston’s population growth since 1980. Latinos make up 24 percent of births and 31 percent of children, contributing to Boston’s population of the future. Latinos also contribute to Boston’s economy as 14 percent of the workers in Suffolk County and 10 percent of the business owners in Boston.

The Opportunities section presents some challenges and areas for growth faced by the Latino community in Boston. Obstacles to higher education and limited English proficiency hinder Latinos from accessing high-skilled jobs. This challenge will become increasingly acute in the future, as an increasing share of well-paying jobs will require advanced training, especially in STEM fields. There are tremendous opportunities to better leverage the talents of Latinos in order to create a more prosperous Greater Boston for everyone.

Note: For the purposes of this report, we define “Latino” using data from the U.S. Census Bureau, including people who meet any of the following criteria:

  • Self-described ethnicity of “Hispanic or Latino,” which is defined as a person of Cuban, Mexican, Puerto Rican, South or Central American, or other Spanish culture regardless of race
  • Place of birth in Brazil
  • Self-described ancestry of Brazilian

Latinos In Massachusetts

Today, there are about 850,000 Latinos in Massachusetts, comprising 12 percent of the state population. While nationally Latinos are predominately Mexican, in Massachusetts the largest group of Latinos is Puerto Rican (42 percent). After World War II, Puerto Rican migration to Massachusetts began in the Connecticut River Valley towns of Springfield and Holyoke before moving into the cities of Eastern Massachusetts. Currently Latinos are concentrated in Boston and the state’s Gateway Cities. The cities and towns with the highest concentrations of Latinos are Lawrence (77 percent of the city population), Chelsea (66 percent), Holyoke (50 percent), Springfield (42 percent) and Lynn (36 percent).

While Boston’s Latino share is smaller than some other Massachusetts towns-at 20 percent-Boston has the largest total number of Latino residents at just over 130,000. Latinos in Boston make up 16 percent of all Latinos in the state. The largest Latino groups in Boston are Puerto Rican (28 percent of Latinos), Dominican (24 percent), Salvadoran (11 percent), Colombian (6 percent) and Mexican (6 percent). International immigration accounts for a large share of the growth in the Latino population. Almost half of Latinos in Boston are foreign born (43 percent). Puerto Ricans have U.S. citizenship at birth and are native born.

Percentage Latino or Hispanic by County Subdivision

 

ASSETS

ASSET: Population Growth

Without Latinos, Boston's Population would still be near 1980 levels

Over the last several decades, Boston has boomed. Our population has grown and the economy has expanded. But this is actually a recent trend. Boston’s population declined sharply between 1950 and 1980 and this population decline coincided with a slowing of the local economy.

Fortunately, the city has rebounded in recent decades, thanks in large part to growth in our Latino population. From 1980 to 2000 Boston’s Latino population grew by almost 2.5 times while the non-Latino population continued to shrink. The non-Latino population has begun to grow since 2000, but Latino population growth still accounts for 92 percent of Boston’s total growth over the 25 years from 1980 to 2015. Without Latinos, Boston’s population would still be near 1980 levels.

Population of Boston
Boston Child Population

ASSET: Future Growth

Latinos are also key to Boston's future population. Without Latinos, Boston's child population would have declined dramatically.

Declining population threatens our ability to expand the economy and strengthen our civic institutions over the long term. In order to thrive we need entrepreneurs coming up with new ideas, creating new businesses and starting new community organizations. And we need enough skilled workers to meet growing employer demand.

Boston’s population decline since 1950 hit the population of children particularly hard. Even with the upswing in overall population since 1980, there are still fewer total children aged 17 or younger in Boston than there were in 1980. However, between 1980 and 2000 growth in Latino children increased rapidly, with the number of Latino children roughly doubling in only 20 years. Over this same timeframe, the Boston non-Latino child population declined by one-third. Without growth in the number of Latino children, Boston’s child population would have declined dramatically.

In 2015, Latinos made up 31 percent of children in Boston, despite being just 20 percent of the city’s population. Additionally, 24 percent of births in Boston are to Latina mothers. The Latino population will grow into the future, continuing to support the growth of Boston as a city. These Latino children will be the citizens and workers of Boston’s future.

ASSET: Increasing Diversity

Growth in our Latino population coincided with growth among other racial and ethnic groups.

A core reason why cities are such dynamic places to live and work is their diversity. At their best, cities bring people of different experiences and perspectives close together, generating new ideas and finding creative solutions to difficult problems.

For a long time, Boston had been a strikingly white city; back in 1970, eight in ten residents were white. But it’s not just the Latino population that grew over the years since then. Growth in our Latino population coincided with growth among other racial and ethnic groups-much of it from new immigration-helping enrich our city with greater diversity. Combined growth in the Hispanic, Asian/Pacific Islander and Black populations helped lead to Boston becoming a majority non-White city for the first time in the 2000 Census.   Latinos and Asian/Pacific Islanders grew most over this 45 year time-frame, with Latinos growing from 3 percent of the city’s population to 20 percent and Asian/Pacific Islanders growing from 1.3 percent to 9.5 percent. That’s growth of more than 600 percent for each of these two groups.  

Boston's Population by Race & Ethnicity
People Working in Suffolk County

ASSET: Latino Workers

Latinos are a growing share of Boston’s workforce.

Related to growth in the overall Latino population, Latinos now represent 14 percent of the workforce in Suffolk County. (Due to data limitations, this analysis uses Suffolk County, rather than Boston, as the place of work. Boston makes up the vast majority of Suffolk County, which also includes Chelsea, Revere and Winthrop.)

This growth is striking, since back in 1980 Latinos only made up 2 percent of the workforce in Suffolk County. And the rate of growth in more recent years continues to be rapid. Latinos in the workforce grew over 60 percent in just 5 years from 2010 to 2015 (from 60,000 to 97,000).

ASSET: Entrepreneurship

Latinos are increasingly contributing to Boston’s economy as business owners and entrepreneurs

Helping spur new growth and innovation, Latinos increasingly contribute to Boston’s economy as business owners and entrepreneurs. The share of privately-held firms owned by Latinos grew 60 percent from 2007 to 2012 (from 7.8 percent to 10.4 percent). And the number of paid employees of Latino-owned firms increased 115 percent over the same time period (from 1,568 to 3,364). Latino-owned businesses, however, remain small compared to all privately-owned firms in Boston. Latino-owned businesses average less than $100,000 in annual sales, compared to $644,000 in annual sales for all privately-owned firms. Further, 91 percent of Latino-owned firms have no paid employees compared to 79 percent of all privately-owned firms. Latino firms with employees average six total employees compared to 12 employees for all privately-owned firms.

Latino Share of Privately-Owned Firms in Boston
Economic Output in Suffolk County

ASSET: Economic Output

Latinos boost our local economy as workers and entrepreneurs.

Latino workers hold jobs in Boston and Latino entrepreneurs own businesses that employ additional workers. Altogether these jobs in turn help support more jobs in the region, either through supplier relationships with local companies, or through Latino spending on local goods and services. The growing contributions of Latino workers and entrepreneurs is an important part of how Boston turned a corner, reversing our economic slowdown and revitalizing the urban core.

In 2014, the direct and indirect cumulative effect of Latinos accounted for roughly $9 billion in Gross Domestic Product, about 7 percent of Suffolk County’s total economic activity. This is up significantly from 1980 when economic output associated with Boston’s much smaller Latino population was less than $1 billion.

OPPORTUNITIES

OPPORTUNITY: Skilled Workers

Almost half of new job openings will require a college degree.

With our region’s longstanding backbone of world-renowned colleges and universities, Boston has been a hub of high-skill jobs for most of its history. As the national economy has shifted toward higher-skilled employment in recent years, the need for higher education in order to succeed in Boston has continued apace. By 2022, almost half of projected job openings from new growth (46 percent) will require a Bachelor’s degree or higher. And seven in ten job openings (71 percent) will require at least some college coursework or a post-secondary certificate.

Many of our projected replacement openings will also require some college coursework (59 percent), but these replacement openings are less likely to require higher education than openings from new growth.

Because so many people in our region have college degrees-58 percent of people in Suffolk County have a Bachelor’s degree or higher-even some jobs that do not require a college degree may be filled by someone with a college degree. This dynamic makes it all the more difficult for people without post-secondary education to find employment in Boston.  

Porject Job Openings in Boston by Education 2012-2022

OPPORTUNITY: Occupation Growth

Most of the occupations projected to see the largest growth are in high-wage fields.

While it’s hard to predict future labor market changes, the state’s Executive Office of Labor and Workforce Development does provide rough occupation growth projections out to 2024 (summarized below). Many, although not all, of the areas with the greatest growth will likely be in high-wage jobs. Management and computer occupations are projected to grow by over 10 percent each and wages in these fields are above $90,000 a year. Food preparation and personal care occupations, which provide entry-level jobs for many new immigrants, are also projected to grow significantly, but pay wages in the range of just $30,000 a year.

Unlike in other parts of the country where much of the job growth is in low-skill, low-wage occupations, Boston is fortunate to have many thriving industries that pay good wages. But the prevalence of these good jobs brings with it a serious challenge; workers without the required higher-level skills risk getting shut out.

OccupationEmployment2014

OPPORTUNITY: STEM Job Growth

Science, technology, engineering and math (STEM) occupations are among Boston’s fastest growing.

Science, technology, engineering and mathematics (STEM) occupations have become an important part of our regional economy, and they are among the occupations that the Executive Office of Labor and Workforce Development projects will grow fastest over the coming years. The table below highlights selected STEM occupations that are projected to grow by more than 6 percent by 2024.

Job growth in just these selected occupations adds up to thousands of net new openings. The top three categories of software developers and computer systems analysts together are projected to grow by more than 13,000 jobs, and average wages in each of these occupations are all above $93,000 a year. If Latinos are not able to access higher education, they may be excluded from these occupations. Similarly, if Boston is not able to further develop its STEM talent pipeline, Boston companies may face difficulty filling these jobs.

OccupationBPDA

OPPORTUNITY: Education

Increase the education and English proficiency of Latinos in order to fully realize their potential.

Since they are less likely to have a college degree, many Latinos are not well-prepared to take advantage of these job openings in high-skill areas. As shown in the graph below, only 19 percent of working-age Latinos have a Bachelor’s degree or higher compared to 50 percent of non-Latinos. At the other end of the spectrum, over 60 percent of Latinos have only a high school degree or less.

Educational Attainment of Working-Age Adults by Ethnicity
English Proficiency by Ethnicity

One key barrier for Latino advancement through higher education and into high-wage occupations is a lack of English proficiency. As was noted earlier, 43 percent of Latinos are foreign born, with the vast majority of these newcomers having grown up speaking other languages, most often Spanish or Portuguese.

In Boston, 25 percent of Latinos are not proficient in English (speaking English either “Not well” or “Not at all”). By contrast, only 6 percent of non-Latinos are not proficient in English. As we continue transitioning into a knowledge economy where communication skills are paramount, it will be critical to build more supports for improving the English language skills of all lower-skill workers, including Latinos. 

OPPORTUNITY: High-Wage Occupations

Increase Latino representation in highly paid occupations.

With nearly half of all new jobs in our local economy likely to require a college degree or more, Latino workers without a college education face real barriers to employment. Currently, Latinos in Boston are overrepresented in low-paid occupations such as building and grounds maintenance and food preparation. Latinos make up 33 percent of food preparation jobs, for instance, but median wages in these occupations are only $31,000 a year for full-time work. Other occupations, like those in business and finance, pay median wages of roughly $92,000 a year. But Latinos comprise only 5 percent of these occupations.

There is also a range of jobs earning different wages within each occupation, and Latinos are concentrated within the lower-wage ones; for most occupation categories, the Latino share of wages is smaller than the Latino share of employment.

Latino Share of Employment vs. Share of Wages, by Occupation

OPPORTUNITY: High-Wage Industries

Latinos are also under-represented within Boston’s more highly paid industries.

In addition to being underrepresented in Boston’s more highly paid occupations, Latinos are also underrepresented in Boston’s more highly paid industries. Whereas “occupation” captures the type of job an individual holds (e.g. an accountant), “industry” captures a whole field of work that includes people working in many different occupations (e.g. retail trade).

Within industries, Latinos make up 17 percent of employment overall, but only make up 8 percent of employment in high-wage industries like finance and insurance (with median wages of $71,000 a year). On the other end of the spectrum, Latinos make up 32 percent of employment in accommodation and food services, but median wages in this industry are only $27,000 a year.

And similar to the story within occupations, there is a range of jobs within each industry category, each of which earns different wages. As shown in the graph below, for each industry group, the Latino share of wages is lower than the Latino share of employment, suggesting that Latinos are concentrated in the lower-wage jobs within each industry.

Latino Share of Employment vs. Share of Wages, by Industry

OPPORTUNITY: Business Development

Increase representation of Latino-owned firms in high-value industries and promote their growth.

Latino-owned firms face difficulties in growing their businesses and accessing higher value industries. Within almost every industry, Latino-owned firms employ a disproportionately low share of that industry’s total employees. Latino-owned firms, for instance, make up 23 percent of the privately-held firms in health care and social assistance, but they employ only 4 percent of the employees. This is also true when comparing the share of Latino-owned firms with their share of total sales within that industry. In retail, for instance, Latino-owned firms make up 14 percent of the industry, but only 3 percent of total sales.

Latino Share of Firms, Employees and Sales in Boston by Industry

assets + opportunity = action

Boston is blessed with a strong and increasing supply of Latino talent. Growth in the Latino population has helped us fend off what would otherwise have been stagnant population growth during the past 35 years. And now on the aggregate level our local economy is quite strong. Overall unemployment is relatively low, currently at 3.9 percent (April 2017), and there is growing demand from employers, especially those in burgeoning, high-wage fields, such as science, technology, engineering and math (STEM). This increasing demand presents a real opportunity because these fields offer good jobs with higher than average wages.

But high-skill, high-wage jobs bring with them an important challenge: Workers without the required high-level skills risk getting shut out entirely. In order to grow our economy so that we all can thrive, we need to do a better job of building the talent pipeline so that the supply of workers, including those within the Latino population, have the skills necessary to meet the demands of our 21st century workforce.

As this report shows, Boston’s diverse and growing Latino community already is making tremendous contributions to this region’s cultural and economic life, but its potential is even greater-and essential to our shared future prosperity. Since Latino children represent such a large percentage of our city’s young people, it’s no exaggeration to say that our city’s future vitality depends on tapping the wellspring of human capital within the Latino community. When Latinos thrive, we all thrive.

Credits

A Special Report from Boston Indicators and the Boston Planning and Development Agency in support of the Latino Legacy Fund at the Boston Foundation

Authors
Alvaro Lima, Boston Planning and Development Agency
Christina Kim, Boston Planning and Development Agency
Luc Schuster, Boston Indicators

Editors
Stephen Chan, The Boston Foundation
Barbara Hindley, The Boston Foundation

Design
Kate Canfield, Canfield Design

Special Thanks To:
Aixa Beauchamp and Juan Carlos Morales, Co-Founders, Latino Legacy Fund and Rosalin Acosta and Zamawa Arenas, Members, Latino Legacy Fund Advisory Committee, and Members, Boston Foundation Board of Directors