The Pew Hispanic Center published a report tracking Hispanic household wealth from 2005 to 2009, and they found a marked decline for the median Hispanic household:
Median household wealth among Hispanics fell from $18,359 in 2005 to $6,325 in 2009. The percentage drop—66%—was the largest among all racial and ethnic groups, according to anew report by the Pew Research Center’s Social & Demographic Trends project. During the same period, median household wealth declined 53% among black households and 16% among white households.
The Pew Research report provides the first look at how the Great Recession impacted household wealth. It finds that plummeting house values were the principal cause of the erosion in wealth among all groups. However, because Hispanics derived nearly two-thirds of their net worth in 2005 from home equity and a disproportionate share reside in states that were in the vanguard of the housing meltdown, Hispanics were hit hardest by the housing market downturn.
One wonders how this might shape the political landscape. The group identified by the Pew Hispanic Center doesn’t necessarily line up with the Hispanic electorate, yet the Hispanic electorate, like the larger Hispanic population, is concentrated in regions hard-hit by the housing bust, with the notable exception of Texas.
There are two usual prescriptions for Republicans in light of the growing size of the Hispanic electorate and the fact that the broader Hispanic population has not fared well in the post-crisis economy: (1) the GOP needs to “detoxify” its brand by embracing comprehensive immigration reform that creates a path to citizenship for unauthorized immigrants and (2) the next Republican presidential nominee should choose a running mate of Hispanic origin or with strong ties to the, or a particular, Hispanic community, e.g., the Cuban American Florida Senator Marco Rubio or the Mexican American New Mexico Governor Susana Martinez or former Florida Governor Jeb Bush, all of whom have suggested that they’re not interested in the job.
Martinez is an interesting case. I am inclined to take her at her word when she says that she pledged to serve a full term as governor, yet she’s been actively engaged in the immigration debate, e.g., in a legislative battle over driver’s licenses for unauthorized immigrants — she is against granting them — and she recently acknowledged that, unbeknownst to her, one of her grandparents was himself an unauthorized immigrant. And though I haven’t followed New Mexico news as closely as I should, it seems that she has handled herself with great aplomb, which is intriguing.
I’m sympathetic to the view that a charismatic Hispanic running mate would make sense for a candidate like Mitt Romney. But there are Quayle-like and Palin-like risks involved in choosing someone who has spent a relatively short period of time in public life.
As a substantive matter, and that’s what we like to focus on in these parts, the challenge of rebuilding Hispanic household wealth is very vexing, particularly if we acknowledge that we’re not going to see, nor should we see, something like the housing boom of the last decade. Encouraging other forms of asset-building is the right strategy, but it is likely to take time. Romney at least gestures in the direction of an asset-building strategy with his call for eliminating capital income taxation on under-$200K households, but this is hardly a very vivid, eye-catching proposal.