Thursday, August 21, 2008

The Economic Consequences of a More Diverse America

On August 14, 2008, the U.S. Census Bureau released its projections for the ethnic composition of the population in 2050. The key finding is that minorities, which currently constitute one-third of the U.S. population, will rise to 54%. As early as 2023, minorities will comprise more than half of all children.

The breakdown in 2050 is projected as follows: non-Hispanic white alone: 46.3% (65.7% in 2008); Hispanic: 30.3% (15.4% in 2008); black: 14.0% (15.0% in 2008); Asian: 9.2% (5.1% in 2008); and mixed race: 3.7% (1.7% in 2008). American Indians, Alaskans, Hawaiians, and Pacific Islanders will increase by less than 1%. The two largest changes are a one-third decline in the non-Hispanic white and a doubling in the Hispanic population.

Numerous studies have attempted to determine high school and college graduation rates among Americans. A sampling includes the Center for Public Education, the U.S. Census Bureau, the Urban Institute Education Policy Center, and a National Bureau of Economic Research paper written by Chicago professor James J. Heckman and American Bar Association affiliated Paul A. LaFontaine. Although the numbers and percentages differ among the four reports, all found a large gap between Asians and Whites, the top two groups, and blacks and Hispanics, which enjoyed lower graduation rates. Depending on the methodology employed, the gap between whites and blacks/Hispanics ranged between 16-28 percentages points. The gap was a few percentage points greater between Asians and blacks/Hispanics. These gaps have persisted for 35 years. The gaps were even larger for college graduation rates.

Unless blacks and Hispanics markedly increase their secondary and tertiary graduation rates, the average educational level of the American work force will steadily decline in the coming decades as better educated whites are replaced by less well-educated blacks and Hispanics. On this trend, America will steadily lose competitiveness. America must find the means to better educate its minorities.


Chick said...

How long does it take a White Hispanic to be classified as White? What percent of Hispanic ancestry makes for an Hispanic? I suspect that racial an ethnic bookkeeping in the next decades will become more muddled than it is today. More telling will be those who identify with being a non-hyphenated American.

sridhar gurivireddy said...

Birth rate among Hispanics is supposedly higher than other races. This is compounded by continuing illegal immigration. Lower education levels also prompt for higher fertility, for economic security. We should spend money to educate both current generation and next generation of Hispanics. Of course, we should also send the illegal immigrants back before they add more kids here.