September 4, 2007
Source: The Wall Street Journal

Last week's news that the U.S. poverty rate fell to 12.3% in 2006 from 12.6% in the prior year becomes even more noteworthy when you consider that Hispanics led the way.

According to the Census, poverty rates in 2006 were statistically unchanged for whites, blacks and Asians but decreased to 20.6% from 21.8% among Latinos. The poverty rate among Hispanics is lower today than the poverty rate among blacks (24.3%). Per capita income also increased across the board, by 1.9%, but here, too, Hispanic gains stand out. The per capita income of whites, blacks and Asians, increased by 1.8%, 2.7%, and 8% respectively, while Hispanic incomes rose by 3.1%.

Given the rapid growth of the Hispanic population due to immigration and higher birth rates, this is a welcome trend. And it is a trend. Current Population Survey data compiled by Jeffrey Passel of the Pew Hispanic Center show that the Latino poverty rate, which was 22.5% in 2003, has fallen for three straight years. America's fastest-growing ethnic group has been steadily improving its economic lot, notwithstanding lower education levels on average and overrepresentation in low-skill occupations.

Last month, Pew released a study on the wages earned by foreign-born Latinos between 1995 and 2005. Latinos comprise the largest share of foreign-born workers and accounted for 13% of the overall labor force in 2005, up from 6% in 1980. According to Pew, between 1995 and 2005, "The proportion of foreign-born Latino workers in the lowest quintile of the wage distribution decreased to 36% from 42% while many workers moved into the middle quintiles."

The report's author, Rakesh Kochhar, cites higher levels of education and a move from jobs in agriculture to construction and other higher-paying occupations as major factors in Latino upward mobility.

"During this period," writes Mr. Kochhar, "many foreign-born Latinos stepped out of the low-wage workforce and headed toward the middle of the wage distribution." Some conservatives assert that the U.S. is importing impoverished immigrants from Mexico who are destined to remain that way. These fears are misplaced. The data show that over time Latinos can and do climb the economic ladder, much as previous immigrant groups have done.

Unfortunately, most of the media decided to minimize or ignore the poverty figures, preferring instead to play up the Census data showing that 47 million Americans lacked health insurance in 2006, up from 44.8 million in 2005. But the ranks of the insured also grew, and most of the uninsured are people who can afford insurance but don't buy it, especially the young, or who qualify for Medicaid and other government programs but are not enrolled.

Many of those caught in between have been priced out of the market by government mandates that drive up costs and limit choice. They're also victims of regulations that have led many employers to stop offering coverage, rather than offer an expensive plan that would force them to lower wages. With the right reforms, they could all have access to affordable private insurance.

We hate to spoil the morose political mood with such contrary optimism, but we have to follow the facts where they lead.