If Congress fails to act on the "fiscal cliff," come January 1 a series of tax cuts will expire and obligatory budget cuts will come into play that will likely drag our economy back into a recession.
What's more, the Congressional Budget Office estimates that unemployment will likely rise to over 9 percent.
The latest report from the government’s Office of Personnel Management notes that Hispanics now represent 8.1 percent of the federal workforce, up from 6.5 percent in 2000
- Raul Mas
Everyone should be concerned about these negotiations, but Latinos in particular have a great deal to lose if Congress fails to act.
The Hispanic population already suffers a much higher unemployment rate than the general population, 10 percent vs. 7.7 percent for the national average.
Any job cuts resulting from budget cutbacks would likely affect the Hispanic population disproportionately and lead to even greater unemployment.
Employed Latinos are less likely to have a college degree than either whites or African Americans, and they earn only 71 percent of the average weekly wage earned by whites.
Thus any economic downturn will further crimp their already below-average income stream.
In addition to making a bad employment situation even worse, the failure of Congress to act would impact Latino small business owners.
Hispanic small businesses represent the fastest component of that sector, with an estimated 6.3 percent being self-employed.
Not only will their income taxes go up, but small business owners will also be forced to withhold higher Social Security and Medicare taxes from their employees, thus lowering the take-home pay of many who are already struggling to survive in a tough economic climate.
In recent years, Hispanics have made great strides in gaining federal civilian jobs and are being more fairly represented in the government workforce.
The latest report from the government’s Office of Personnel Management notes that Hispanics now represent 8.1 percent of the federal workforce, up from 6.5 percent in 2000.
Fully 20 percent of the Department of Homeland Security is made up of Hispanics.
Many of those jobs will likely be in jeopardy if sequestration, the mandatory $1.2 billion in automatic spending cuts, begins taking place on January 1.
In addition, the Department of Defense budget is targeted for deep reductions under the sequestration scenario.
Six hundred billion dollars in cuts will come to a military that is already facing sharp cutbacks as our Middle East wars come to an end and we bring our troops home.
While some might think this a good thing, the reality is that the U.S. military has historically been a great source of education and career advancement for many Hispanics. The Navy and Marine Corps have particularly high rates of Hispanic participation; but all the armed services will suffer dramatically if mandatory budget cuts take effect.
And so, Latinos should care deeply about the looming “fiscal cliff."
Our jobs and the financial health of our families and communities are dependent on our political leaders coming together.
We are in a lackluster economic recovery and we cannot afford to let partisan politics send us back into a recession. It is important that our political leaders reach a compromise and enact sensible legislation to keep our economy growing -- not sliding backwards.
Raul Mas is a Business Development & Investment Management Professional, as well as a Political and Economic Commentator