Living the American DREAM: Katherine Perez

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By Gabriela Gomez, Communications Department Intern, NCLR

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Katherine Perez, far right. Photo: Katherine Perez

When Katherine Perez arrived in the United States from Colombia in 2005, she had one goal in mind: to get a great education that would pave the way to a better life. Her parents made the tough decision to leave their country after her mom got a job offer in the United States, the “land of opportunity.” Yet soon after settling in, the Perez family was met with a harsh reality: the attorney overseeing their immigration case had fled the country, their paperwork and savings in tow.

Despite this setback, the Perez family was determined to move forward. Little by little, the family worked to rebuild their lives in Maryland. While her parents worked, Katherine poured herself into her schoolwork, taking honors courses in middle school and participating in the International Baccalaureate program at her high school. Though she thrived academically, her immigration status put her at an extreme disadvantage.

“I was very dependent on what my parents could help with and provide for me. [With] no money of my own, unable to drive and attend events and school programs—I felt as if everyone else my age was ahead of me, and I was falling behind every day more and more,” said Katherine.

When the college application period rolled around, the legal and financial barriers multiplied. It quickly became clear that the road to a college degree would be challenging and extremely costly.

With help from supportive mentors, Katherine obtained a private scholarship that enabled her to enroll as a full-time student at Montgomery College and work toward an associate’s degree. But economic difficulties at home meant she’d also have to juggle a part-time job to help support her two younger sisters.

As much as she tried, mounting pressures from school and work often led Katherine to question whether her degree was worth the hardship. Would the barriers of being undocumented ever be lifted?

Obama_SOTU3_resizedOn June 15, 2012, she got her answer by way of President Obama’s announcement of the Deferred Action for Childhood Arrivals (DACA) program. Though initially hesitant, Katherine set her fears aside, submitted her application, and hoped for the best.

Today, the 22-year-old DACA recipient is a student at the University of Maryland. Since receiving DACA, Katherine has found a steady job and transferred to the University of Maryland, College Park, where she is pursuing a bachelor’s degree in science. Thanks to DACA, she now looks to her future with renewed hope and resolve.

“I have a job and I am in the process of getting my driver’s license. I can now save money to pay for next semester and help out at home with the expenses. I feel more empowered and in charge of my life,” said Katherine.

Though these stories echo the power of DACA, they also echo the voice of an immigrant community eager to contribute to the progress and prosperity of the nation. Eager to prove the narrative of the American Dream is alive and well, and within reach. Katherine would like to remind those in Congress seeking to repeal DACA: “Even though we were not born in this land, we have grown to love and respect the national symbols, and to pledge allegiance to the flag. We are here not to bleed out the country, but to make it a better one and to contribute to [its] well-being.”

The Economic Impact of Latino Workers: A By-the-Numbers Breakdown for Tax Day

Hispanic Americans are firm believers in the American Dream: hard work will earn you and your family a better life. Expected to make up much of the growth in the American workforce in the next four decades, Latinos are helping to revitalize communities and strengthen local economies all throughout the nation. Hard work however, is just one contributing factor to ensuring that the country remains prosperous. In order to support investments in education, infrastructure, health care, and many other areas that millions of Americans rely on, everybody must contribute financially through the tax system. Luckily for this country, Latinos are a tremendous asset thanks to their commitment to paying their fair share of taxes.

In honor of Tax Day, let’s take a by-the-numbers look at the economic impact that Latinos have on the U.S. economy.

Labor Force Participation

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Entrepreneurship and Purchasing Power

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  • Despite slower growth during the recession, the number of Hispanic-owned business was projected to grow by nearly 40% between 2007 and 2013, to nearly 3.2 million businesses.
  • In 2013, sales receipts for Hispanic-owned businesses in the United States totaled almost $470 billion.
  • Because the Latino population is comparatively younger than other racial and ethnic groups and the number of Hispanics in the United States is quickly growing, Hispanic purchasing power is also expected to grow to nearly $1.7 trillion by 2019.

Tax Contributions

Photo: http://401kcalculator.org, Creative Commons

Photo: http://401kcalculator.org, Creative Commons

  • In 2013, Hispanic households paid almost $124 billion in federal taxes, including individual and corporate income taxes, payroll taxes, and excise taxes, and almost $67 billion in state and local taxes.
  • States with large Hispanic populations have also benefited from their tax contributions. Hispanic households accounted for 23 percent of state and local tax payments in Texas, 20 percent in California, 18 percent in Florida, and 15 percent in Arizona.
  • Tax contributions from Hispanic households also play a critical role in funding Social Security and Medicare. In 2013, Hispanic households contributed about $98 billion to Social Security and $23 billion to Medicare through payroll taxes. Many economists believe that tax contributions from young Latino workers will be the key to keeping the Social Security system strong.

The Work of the Fair Housing Act Is Not Yet Complete

HousingDiscrimination_blogpic_newHomeownership is a cornerstone of the American Dream and often a doorway to greater opportunity. The family that is able to buy or rent in a neighborhood with a thriving local economy is undoubtedly more likely to find the kinds of quality, well-paying jobs that will help them move up the economic ladder. Children who are able to attend good school systems have a greater chance of moving on to higher education and achieving their professional dreams. Choosing where to settle down is a decision with tremendous implications for a family’s future.

Unfortunately, not everybody is given a fair shot at living in the communities of their choice. The Fair Housing Act, signed into law more than 45 years ago to end discriminatory housing practices, has been an essential safeguard for Latino families who would otherwise have been denied equal access to housing. Yet housing discrimination persists at alarming rates—more than three million cases every year. NCLR research shows that even in communities with a longstanding Latino presence, such as San Antonio, housing discrimination is still an issue that Latinos face on a regular basis.

Having just gone through a housing crisis that wiped away generations of wealth from communities of color who were disproportionately targeted with predatory lending practices, it is clear the Fair Housing Act is needed now more than ever. However, a challenge in the Supreme Court could irrevocably alter this essential legislation for the worse. Today the Supreme Court heard oral arguments on a case that will determine whether the use of disparate impact within the Fair Housing Act can continue to protect against discriminatory housing policies.

Family in front of houseAs it stands, disparate impact prohibits housing policies that result in discrimination, regardless of intention. For example, when a community passes a local ordinance outlawing families larger than four people to sign a rental lease, the result is an unintentional limitation on rental options for large families—families who may be living with multiple generations under one roof or have relatives visiting from their home countries for extended periods of time. These types of policies, which enable racial exclusion to persist, are kept at bay by provisions of the Fair Housing Act.

If our nation is to live up to its highest principles of fairness, justice, and opportunity, then the Supreme Court cannot chip away at the critical protections offered under the Fair Housing Act. If we allow these discriminatory policies to persist, we will forever have a nation in which people who make the same incomes, have the same financial profiles, and have the same credit scores, will not achieve the same results—simply because housing service providers can employ separate but unequal systems that perpetuate discrimination. Discrimination, even if it is unintentional, must be eradicated in order to foster more diverse and inclusive communities that empower Americans to seek out opportunity and fulfill the American Dream.

For Latinos in Large Cities, High Rent and Stagnant Income Mean the American Dream is Slipping Away

While a majority of Latinos believe that homeownership is part of the American Dream, high housing costs and low incomes coupled with a lack of mortgage credit are locking them out of achieving it.

In the 10 cities in the nation with the highest median rents, households devote an average of 44 percent of their income to rent. NCLR overlaid the large Latino populations in these cities to show the high burden of rent on Latino households, who tend to earn below-median income, especially in places like Los Angeles, San Francisco, New York, and Miami.

While we’ve highlighted trends in the past indicating Latinos are being locked out of the American Dream of homeownership due to tightening mortgage credit standards, this analysis highlights the difficulty many Latinos have in simply affording rent, let alone being able to pay off debt to improve credit scores or saving for a mortgage down payment.

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Between 2009 and 2013, an estimated 1.3 million Latino families lost their homes to foreclosure and were made to downsize or switch to renting rather than paying a mortgage. As income has stagnated for much of the American middle class, rents have sharply risen, leaving Latino families with few options and forcing them to devote even larger portions of their paychecks to rent. A report by Reis, a real estate research firm, shows that rents today are 15.2 percent higher than they were at the end of the recession in 2009, with no sign of this trend slowing down anytime soon. Though Latino household income did rise slightly last year, it is still shockingly low, and long-term stagnation of wages is damaging to the American economy.

Across all 10 cities, families devote close to half of their incomes to rent, with the average rent-to-income ratio a staggering 45.4 percent.

In Los Angeles, the city with the nation’s largest Latino population, average monthly rent for a one-bedroom apartment now costs $1,740, while the city’s median monthly household income is just $4,145. This means a family making the median income living in a median-rent apartment devotes 42 percent of monthly income to rent.

In Miami, where Latinos make up 70 percent of the population, the rent-to-income ratio is even starker, with 61.9 percent of income going toward rent each month in families making the median income. Only in notoriously expensive New York City is this rate higher, with families devoting more than 68 percent of their income to rent.

Low wages and high rents trap many Latinos in a vicious cycle of poverty and debt, putting homeownership out of reach. With such high housing costs, Latino families may have little income left over to pay off outstanding debt, which leads them to take on further debt, which can lower their FICO credit scores. Low credit scores, in turn, make qualifying for a mortgage even more difficult. According to recently released data from the Home Mortgage Disclosure Act, the top three reasons Latinos were denied mortgages in 2013 were debt-to-income ratio, credit history, and down payment issues.

While a majority of Latinos believe that homeownership is an important part of the American Dream, high housing costs are locking them out of achieving it. Because Latinos are increasingly the face of America’s housing market, how Latinos fare in the housing recovery will have implications for the entire nation’s economy. Sensible policies like increasing the minimum wage can help ease the burden by improving stagnating incomes. Similarly, housing regulators can reduce barriers to homeownership by making sure lenders stop the overcorrection in credit standards that are shutting millions of creditworthy borrowers out of the housing market. We must ensure Latino families aren’t kept out of the home-buying process at a time when recovery is needed most.

In an Unequal Country, Latinos Occupy the Bottom Rung

 Investing in Children Can Ensure a More Prosperous Future

 By Leticia Miranda, Senior Policy Advisor, Economic Security Policy, NCLR

 OLYMPUS DIGITAL CAMERAEarlier this month, President Obama called income inequality the “defining challenge of our time.”  Indeed, the reality of America is that the rich are getting richer and the poor are getting poorer, challenging the very premise of the American Dream, that anybody who works hard enough in this country can move up the economic ladder.  Unfortunately, Latinos are at the bottom rung.

The U.S. Census Bureau recently released data using the new Supplemental Poverty Measure (SPM), revealing that there are more poor Americans overall, and that Hispanics have the highest rate of poverty in this country among every racial and ethnic group, at nearly 28 percent.  The SPM counted almost 15 million Latinos as poor in 2012, about one million more than were counted using the official measure of poverty.  The official measure of poverty, which is still in use, counts pre-tax cash income and makes no other adjustments.  Unlike the official measure, the SPM accounts for the impact of critical noncash antipoverty programs such as food assistance and subsidized housing, the value of refundable tax credits, and the differences in costs of living by region and housing type.  It also adjusts for expenses such as out-of-pocket medical charges, payroll taxes, and child care costs.  Continue reading