Why Austin-area Latinos saw a big boost in household incomes


Highlights

Latinos in the Austin-Round Rock metro area saw 17% increase in median household income from 2015 to 2016.

The percentage of Texas Latinos ages 25 and older with at least a bachelor’s degree also rose.

While Latinos are 17% of all workers, report says, they account for 21% of new entrepreneurs.

For almost two decades, Bladimira Martinez scraped by on $7-an-hour pay as a maid. Even when she broke off from the company to work for individual families, she could only make as much as she could clean in one day at $50 an hour.

Martinez, 45, depended on her husband to make payments on their Pflugerville home, and the family barely had time for leisure, let alone vacations, with Martinez working most weekends.

Today, Martinez owns her own cleaning company, Perfection Maid Services, and makes an average annual salary of about $37,345. She manages 30 employees, contributes to her home payments and can afford luxuries such as an upcoming trip to Disney.

“I’m very happy now because I was able to better my quality of life and also that of other people,” said Martinez, who opened her business three years ago.

Latinos such as Martinez in the Austin-Round Rock metropolitan area saw a 17 percent increase in median household income from $48,160 in 2015 to $56,306 in 2016, according to recently released census data. The area includes Travis, Williamson, Hays, Bastrop and Caldwell counties.

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The revelation fits handily within the national trend of most states seeing income increases and almost half seeing lower poverty rates. Minorities, who have longer ways to go to make up for income gaps, accordingly saw the greatest gains.

There could be several explanations as to why Latinos are seeing an income boost, experts said.

Pia Orrenius, senior economist at the Federal Reserve Bank of Dallas, noted that the number of Latino households in the Austin area decreased this year while the overall Latino population in the area increased. For households that now have more earners under one roof, that could cause the household’s median income to increase.

“That might be part of it, (but) I think the bigger reason is that education levels really rose substantially,” Orrenius said.

Census data show the percentage of Texas Latinos ages 25 and older with at least a bachelor’s degree increased between 2015 and 2016, and at least 20 percent of Austin-area Latinos in that age group have bachelor’s degrees.

ALSO READ: Hays County has second-fastest-growing Latino population in state

The new income data could be indicative of changing tides for Latinos’ overall economic well-being.

“Increasing incomes, if it’s part of a sustained trend, are a sign that Hispanics are increasing their living standards,” Orrenius said. “For immigrants, it can mean that they are assimilating faster — learning the language, getting more U.S. job experience. For (natives), it’s consistent with other data on falling dropout rates and higher educational attainment.”

A December study on Latino prosperity by NERA Economic Consulting showed that Latinos are more likely to be employed, increasingly affluent and disproportionately entrepreneurial.

Stories like the Martinezes’ are becoming more prevalent: While Latinos make up 17 percent of all workers, the report states, they account for 21 percent of new entrepreneurs.

“Given the demographic profile of Hispanic Americans, it seems extremely likely these trends will continue in the years to come,” the report stated.

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But while the new data are encouraging, disparities between minorities and whites in America persist, experts say.

The median household income for whites in the Austin area ($73,906) is still 31 percent higher than that of Latinos ($56,306) and 48 percent higher than that of African-Americans ($49,871).

“Unfortunately, I don’t really see enough evidence to convince me that the gaps are closing quite yet, so we’ll have to keep an eye on it,” said Kristie Tingle, research analyst with the Center for Public Policy Priorities.

For the people who live out those statistics, however, the step up is a welcome change.

Martinez, who is still learning English and works closely with her bilingual daughter to run her company, credits her success to determination as well as to guidance she received through an entrepreneurship course she took at the Austin-based nonprofit Hispanic Alliance.

For some, not being fluent in English might deter them from starting their own business, she said, but she’s living proof that it is possible. Martinez is studying English now and hopes to take finance courses in the future.

“Once you cross that barrier of having fear, you can do anything,” Martinez said. “Now that I know, I want to tell everyone.”

ALSO READ: Suburbs lead the way in Austin region’s growth

For others, the barrier to higher income is education. Tess Ortega is well acquainted with that phenomenon, as it’s something she’d been preaching to Austin high school students in her previous job as a college readiness advocate at the nonprofit Austin Partners In Education.

The 24-year-old North Austinite recently saw an annual income increase of more than $10,000 when she went from being an hourly employee, who had a contract during the school year but had to find other work during the summers, to becoming a salaried employee as lead organizer for Jolt, a nonprofit Latino civic engagement organization.

Ortega said in her experience, her bachelor’s degree opened doors to many jobs, regardless of her biology major being in a different field than positions she was seeking.

The bigger paycheck has allowed Ortega to save money as well as help family in Houston with recovery after Hurricane Harvey, which caused severe damage to their home and ruined two vehicles. She’s also chipping in toward her sister’s college tuition.

“Before, I was making enough to pay all my bills and be OK, but I wasn’t making enough to actually save anything for my future or to help family,” Ortega said. “Now, I’ll actually be able to do that. I’m happy about that.”



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