The Chicago-area Latino population contributes more in local taxes than it uses in government services, providing a net gain in public revenue for Chicago and its suburbs, a report released yesterday finds. The research also highlights Latinos’ increasingly large impact in the local economy and workforce.
The Chicago-area Latino population contributes more in local taxes
than it uses in government services, providing a net gain in public
revenue for Chicago and its suburbs, a report released yesterday finds.
The research also highlights Latinos’ increasingly large impact in the
local economy and workforce.
According to the authors of the report, Latinos account for more than $5 billion in direct and indirect local taxes annually. This contribution is offset by $3.9 billion in costs for public services such as education, health care, and public safety, resulting in a net gain to public coffers of nearly $1.2 billion after rounding.
While Chicago’s overall population declined in the past decade, its Latino population has continued to grow. Latinos now comprise 22 percent of the metropolitan Chicago population and a proportional 20 percent of its workforce, with the latter number estimated to climb to 25 percent by 2015, according to researchers.
The report was published by the University of Notre Dame’s Institute for Latino Studies, a research institute dedicated to “fostering understanding of the U.S. Latino experience.” The findings were presented at a public forum hosted by the Federal Reserve Bank of Chicago on Wednesday morning.
“This report sets the record straight,” said Eduardo Arnal-Palomera, Consul General of Mexico in Chicago, who spoke on a panel at the forum.
A stated goal of both the report and the panel speakers on Wednesday was to counteract common misconceptions about Latinos: specifically, that as a result of illegal immigration, their population drains public resources, does not pay taxes, and redirects the majority of its earnings back to their countries of origin.
In contrast to this portrayal, the report finds that Chicago-area Latinos as a whole -- including undocumented residents -- effect a positive influence on public finances and the economy as a whole.
In addition to increased tax revenue, the findings show that Latinos’ growing presence in the workforce has provided the Chicago area with an economic stimulus. Latinos earned $26.2 billion in 2009; after taking out taxes, savings, and money sent back to family in other countries, the population pumped $12.3 billion back into the local economy. Juan Carlos Guzmán, lead author of the report, speculated that after accounting for multiplier effects such as indirect spending stimulated by Latino consumption, the total impact on the Chicago region was closer to $23 billion.
William Testa, a researcher at the Chicago Federal Reserve who served on the panel, also noted the high rate of home ownership for Latinos. He asserted that this finding undermined the popular perception of Latino immigrants as transient group unwilling to embrace life in America. “This is a population that is putting down roots and integrating into the local community,” said Testa.
The report culled data primarily from the U.S. Census Bureau’s American Community Survey, which is published annually. The conclusions refer to Latinos in the Chicago Metropolitan Area, a population of over 1.8 million that spans the city and suburbs in seven counties. Speaking before the forum, lead author Guzmán also observed a “suburbanization of Latinos” in the Chicago region: 57 percent of the area’s Latino population now lives in the suburbs, a trend that has increased in the past decade. Relative contributions and costs are fairly consistent between suburban Latinos and those living in Chicago proper.
Despite their contributions to public and private finances, Chicago-area Latinos face significant challenges. The recession disproportionately affected the Latino workforce: unemployment spiked from 7.2 percent in 2008 to over 12 percent in 2009. And while their labor force participation rate of 73.6 percent remains the highest among all racial and ethnic groups, Latino households still earn only 64 percent of whites’ median household income.
Education is also a particularly important issue for Chicago Latinos; every panelist on Wednesday identified it as the population’s number one priority. The majority of public costs incurred by Latinos -- $1.9 billion annually -- go toward public elementary and secondary schooling. Over 40 percent of the city of Chicago’s public school enrollment comes from Latinos. Yet despite this investment, the population continues to have the lowest educational attainment levels of any racial or ethnic group. Just over 65 percent of Latino students in Chicago graduate high school; and nearly 45 percent of the Latino population over 25 does not have a high school diploma.
Though the panelists largely avoided making any policy recommendations based on the report, all of them noted the need for the United States to address challenges surrounding its growing immigrant population, of which over 50 percent are from Latin America. “The report is useful at a time when once again the immigration issue is being used as a scapegoat” for the nation’s economic troubles, said Arnal-Palomera. And Allert Brown-Gort, head of the Institute for Latino Studies, said that the findings underscored “the urgent need” for Americans “to come to some sort of understanding about how we’re going to [deal with] immigration in this country.”
When the panel took questions from the audience, many of those who spoke were from Chicago research institutions and community groups. A representative in the audience from Congressman Mike Quigley’s office urged Latino community leaders to meet with the local government representatives to ensure that their voice was heard. And one of the panelists -- Ngoan Le, VP of programs for the Chicago Community Trust, which funded the research -- argued that civic engagement must be a priority for the Chicago Latino community. An active population would be able to impact local policy that affects Latinos, such as funding for public schools, she said.
Toward the forum’s close, Brown-Gort summarized the consensus: “The real point of this report is that we all have to get involved.”