Posted on Tue, Jan. 03, 2006

Report: N.C. Hispanics contribute billions

STELLA M. HOPKINS

shopkins@charlotteobserver.com

North Carolina's fast-growing Hispanic community is almost 20 percent larger than government estimates, nearly half illegal and contributes billions to the state's economy, according to research released today.

Researchers at UNC Chapel Hilll's Kenan Institute also said the state spent $61 million -- $102 per Hispanic -- more than it received in taxes to provide key social services.

That net taxpayer cost has to be viewed in the context of the much larger economic contribution Hispanics make as they buy goods, create demand for services and fill low-wage jobs, said John Kasarda, Kenan Institute director and one of two lead researchers on the eight-month project.

"This will shed light...on the immense contributions that many people who are undocumented are making," said Kasarda, a Chapel Hill management professor.

The state has an estimated 600,913 Hispanics, who contributed $9.2 billion to the economy in 2004, the report said.

That was 10 times greater than the Hispanic buying power in 1990, when the official count of the community was less than one-sixth current levels. Census figures estimate the state's Hispanic population last year at 506,000.

The growing population holds potential for greater sales locally, expanded exports and small-business growth, the report concluded.

Immigration -- legal and illegal -- had been an increasingly contentious issue nationwide.

President Bush, while calling for stricter border controls, has also been pushing a program that would allow illegal immigrants to continue working in the country. Critics dismiss Bush's proposal as mass amnesty.

Businesses see a growing consumer market and a low-cost work force. Critics see a growing tax burden, depressed wages and jobs taken from native-born citizens and legal residents.

In the Charlotte area, the debate became especially emotional last year after two people were killed in traffic accidents allegedly caused by illegal immigrants driving drunk. U.S. Rep Sue Myrick, R-NC, cited the crashes when calling for tougher immigration laws and higher fines for employers employing illegal workers.

The N.C. Bankers Association funded Kenan's work, paying nearly $140,000, said Paul Stock, the group's executive vice president. Bank members might be better able to tap the Hispanic market using the report's information on where the population is concentrated, earnings and other demographics.

"This study quantifies for the first time the enormous economic contributions made by our state's Hispanic population, as well as pointing to a wide range of public policy issues and business opportunities to be explored," Thad Woodard, CEO of the N.C. Bankers Association, said in a news release today. "North Carolina policymakers and business leaders now have a wealth of data and information on which to make decisions about both challenges and opportunities offered by this increasingly significant segment of our state's population and economy."

The report is being released this morning to kick off the sold-out Economic Forecast Forum presented in Research Triangle Park by NCBA and N.C. Citizens for Business and Industry.

Kenan researchers said the state spent $817 million providing Hispanics with education, health care and corrections services, such as imprisonment and probation. Those services are considered primary measures of immigrants' impact on state budgets. Hispanics generated $756 million in state income, property, sales and other taxes, for a shortfall of $61 million.

Researchers did not differentiate between legal and illegal residents, which troubled Jack Martin, special projects director with the Federation for American Immigration Reform.

"I would want to steer clear of any study that lumped Hispanics together, Martin said. The problem, he said, is the big difference in earnings between legal and illegal workers.

The Washington group has estimated that North Carolina has 425,000 illegal immigrants but does not identify country of origin or ethnicity.

Ron Woodard, director of N.C. Listen, an immigration reform group, said Friday that the burden on the schools and healthcare system is only going to get worse as more immigrants, many of whom are uneducated, poor, and lack health insurance, enter the country. He had not seen the report.

The report said that over half the state's Hispanic population has less than 8 years of schooling. The lack of education contributes to far lower average earnings for Hispanics.

The report also found the average age of N.C. Hispanics is younger than that of non-Hispanics. More than half the women are aged to 18 to 44, and nearly 40 percent are 17 or younger.

The high number of women of child-bearing age and those soon to be old enough means "the potential for rapid Hispanic growth...is significant," the report said.

Kasarda said concerns about growing future costs are legitimate but that the benefits are greater.

"I'm not trying to whitewash it," he said.

However, the report also said that Hispanic workers have eased labor shortages, filling one of three jobs created in the past decade. That's meant more competition for jobs that might have gone to non-Hispanics with limited education and work skills.

Hispanic workers' lower wages also have kept costs down and made business more competitive, Kasarda said.

"North Carolina manufacturing in labor-intensive industries is not globally cost-competitive," he said Tuesday morning prior to the release. "Hispanics have enabled us to hold on to some of those jobs."

Manufacturing, for example, shed hundreds of thousands of workers in the last decade, but the number of Hispanics working in factories increased, the report said. They make about 40 percent less than non-Hispanics.

Construction is the largest single employer for N.C. Hispanics, accounting for more than 42 percent of jobs overall compared with 14 percent of non-Hispanics. But they earn nearly half as much, according to the report.

Annual construction labor costs would be nearly $1 billion higher without Hispanics, researchers said. Up to 27,000 houses wouldn't have been built in 2004, and a total of as much as $10 billion in construction wouldn't have been completed, they said.

"Hispanics have added substantially to North Carolina's supply of cost-effective labor," the report said. "In many cases, labor cost savings are passed on to local consumers."

Employers, such as farmers, have also said they need Hispanic workers to do jobs non-Hispanics don't want. Woodard disagrees. They just don't want to work for the low wages many businesses want to pay, he said.

Woodard acknowledges the economic contributions of the Hispanic community, but says that's not a reason to eliminate the country's borders.

"The question is `Do you have a job for everyone?' " he said. "The bigger issue is whether you're displacing an American and or driving down their wages."

Kasarda acknowledges the job and wage competition Hispanics bring, but he said, "On balance, it looks like a major plus for North Carolina."

Here are some findings from the report, which is available online at www.kenaninstitute.unc.edu and also at www.ncba.com:

• Hispanics accounted for 27.5 percent of the state's population growth from 1990 to 2004.

• Hispanics accounted for 57 percent of public school enrollment growth in the last five years.

• Hispanics make up 7 percent of the state's population, up from 1.1 percent in 1990.

• Mecklenburg's Hispanic community grew by 21,475 people since 2000, the largest number statewide. Mecklenburg also has the highest percentage of the state's Hispanic public school students, at about 12 percent.

• At nearly 70 percent, Union County experienced the highest percentage population growth, followed by Cabarrus at 59 percent. Gaston's Hispanic population increased nearly 55 percent.

• Hispanic births accounted for 14 percent of the state's new babies in 2003, up from 1.6 percent in 1990.

 -- Staff writer Franco Ordonez contributed.

 -- Stella Hopkins: (704) 358-5173

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