In a Confusing Economic Climate, Hispanics Are Feeling the Pain of Raising a Family

Federal policy should protect the high stocks of social capital enjoyed by Hispanics if they are to escape or avoid poverty. Yet in today’s strange economic climate, Hispanics are feeling the cost-of-living crunch more than other groups. They also find themselves with steep rates of decline in key social capital measures. As Hispanics look for alternatives to Left-leaning policies, this week, we propose several center-Right policies that should secure strong assets like family, extended family networks, and participation in faith communities—while also considering how the Child Tax Credit (CTC) and paid family leave would make raising a family easier and help achieve upward economic mobility.

It is an economically confusing time. We are by former measures in a recession, but jobs are abundant; house prices are set to tumble while housing stock remains limited; and child poverty rates are lessening, yet surveys show that families feel hard pressed. Earlier this year, millions of people quit their jobs, without seeming to need an income. Meanwhile, the President has offered to cut student debt.

The picture is complicated as we came to assess family affordability in America in a report released today by the Social Capital Campaign, and in light of new figures on the cost of raising a child ($300,000) from the USDA. In the report, we looked specifically at America’s Hispanic population to see how affordable raising a family is for them. 

America’s 62 million Hispanics are a diverse group, yet compared to their White or Black counterparts, they have significantly higher indicators of social capital, as measured by intergenerational households, marriage rates, and church attendance. Hispanics tend to be either married or cohabiting, rather than lone parenting. They prefer to have a stay-at-home mother care for their children, and they are the least likely to want to send children to day care. Yet at the same time, Hispanics are over-represented in the share of the population in poverty and are otherwise a significant presence in America’s working class. 

Federal policies need to work with the grain of positive, socially conservative norms that many Hispanics enjoy, rather than play into trends that cause a downward spiral. 

Social capital—the presence of rich networks of relationships in childhood development and later in adult personal and professional life—is a key indicator of the ability to avoid or escape poverty (as we explored in a paper co-authored with IFS senior fellow Brad Wilcox.) Therefore, policy must include support of existing social capital, while boosting social capital creation where it is missing. So, it is concerning that Hispanics have not been immune to America’s social capital decay—experiencing steeper declines in marriage rates or church attendance than any other group in recent years.

With this in mind, our report addresses five problems that we see in family affordability. First, costs of raising a family have not kept pace with income. Second, workplace policies are out of date, to the point that the U.S. is an international outlier in how little a share of its GDP the government spends on children. Third, current government financial support and welfare policy is decades old and due an overhaul. Fourth, fertility rates are down, with some citing affordability as a reason why. Finally, parents are increasingly isolated—whether lone parenting or with less social capital support in general.

We found that Hispanics bear much of the brunt of these five problems. More Hispanic children live in poverty—4.2 million in 2020—than children of any other racial or ethnic group. They have higher labor force participation rate than average, but the least access to family-friendly employment policies, such as paid leave, healthcare, flexible hours and location, or advanced schedules. Further, Hispanics have a lower take-up rate of child-related government benefits relative to Whites or Blacks despite their eligibility. And in 2016, half of Hispanic children were born to unmarried mothers, up from 34% in 1990.

The economic picture is perhaps less confusing to Hispanics: it’s hard. Housing affordability has been hardest felt by low- and moderate-income renters. In a recent Bipartisan Policy Center poll, half of respondents said it has been somewhat or very difficult to pay rent over the past year—with Hispanic respondents the highest at 59% compared to 57% of Black respondents, and 45% of White respondents. Further, the uninsured rate among Hispanics is nearly double that of Whites. While the majority of Whites, or 66%, receive healthcare through their employers, only a minority of Blacks do (46%), and a smaller share still of Hispanics (41%). 

Today, 1 in 4 children in America are Hispanic, and these children are overrepresented in poverty figures. Yet the strong supplies of social capital Hispanics enjoy mean they are well placed to take advantage of upward economic mobility. Federal policies need to work with the grain of positive, socially conservative norms that many Hispanics enjoy, rather than play into trends that cause a downward spiral. 

To address these issues, we propose that the CTC and Paid Parental Leave be part of a mix of programs that simplify existing welfare and change the culture around employment that puts too much of a burden on mothers and families. Hispanics are hard working. They want to achieve success. They believe in the American Dream. Conservative policies can help ensure they can achieve it. 

Read the full report, “Family Affordability: Building Social Capital at Home,” written by Abby McCloskey. 

Chris Bullivant is Director of the Social Capital Campaign; Carlos Duran is President of the National Hispanic Pastors Alliance.