LATINO HOUSEHOLDS REMAIN POOREST OF NATION'S POOR.

Byline: Carey Goldberg The New York Times

If he dared tattoo gang symbols on his neck, Myrna Morales warned her strapping 17-year-old son, William, she would burn them off with her iron. Or a frying pan.

Such was the desperation of Morales, 41, a naturalized American from Guatemala who has watched three of her American-born children seduced by the worst of Los Angeles' inner-city culture and seen her own earnings as a housecleaner shrink in recent years. With her diminishing income, she asked, how can she promise they will prosper like so many immigrants' children before them?

``I tell them go to school and don't be like me, cleaning bathrooms,'' said Morales, who scrubs and vacuums for $300 a week despite her degree as a medical assistant from a local college.

To judge by the latest Census Bureau statistics, Morales is right to be worried. The data show that in 1995, median household income rose for every other American ethnic and racial group, but for the nation's 27 million Latinos, it dropped 5.1 percent. The downturn, which affects the American-born as well as the newly arrived across a broad spectrum of socioeconomic indicators, has baffled social scientists. And it has prompted some to warn that many Latinos, members of the nation's fastest growing ethnic or racial group, may become entrenched as America's working poor.

Census data show that for the first time the poverty rate among Latinos in the United States has surpassed that of African-Americans. Latinos now constitute nearly 24 percent of America's poor, up 8 percentage points since 1985. Of all Latinos, 30 percent were considered poor in 1995, meaning they earned less than $15,569 for a family of four. That is almost three times the percentage of non-Latino white people in poverty. Of the poorest of the poor, those with incomes of $7,500 or less for a family of four, 24 percent were Latino.

These are not just statistical blips. Overall, household income for Latinos has dropped 14 percent since 1989, from about $26,000 to under $22,900, while rising slightly for African-Americans.

Nor do the data simply reflect the recent influx of illegal Latino immigrants. ``As we know from the data in other studies,'' said Manuel de la Puente, the chief of the Census Bureau's Ethnic and Hispanic Statistics Branch, ``the immigrants tend to be low-educated individuals, hold service-sector jobs and have little or no English, and all these things contribute to income.''

But when Census analysts separated out American-born Latinos, de la Puente said, they found their income levels declining as well. Statistics indicate that America's Latino population is experiencing an almost across-the-board impoverishment.

``It is the American nightmare, not the American dream,'' said Arturo Vargas, who heads the National Association of Latino Elected Officials, based in Los Angeles. Though the Latino middle class has been growing, Vargas said, most Latinos are caught in jobs like gardener, nanny and restaurant worker that will never pay well and from which they will never advance.

The declining income among the nation's Latino population is little understood and requires more study, researchers say, as do new data showing improved economic well-being among African-Americans.

Researchers also caution that the Latino population, which is an ethnic term and includes some African-Americans, is an amalgam of people, and their descendants, from nearly 24 countries. They range from typically prosperous Cubans of Miami to Puerto Ricans, largely concentrated in New York and the nation's poorest ethnic group. Generalizations, then, are often of limited use. Nonetheless, the growing group of scholars who study America's Latinos point to several factors that affect most of that population:

Structural changes in the economy that have drastically reduced well-paid blue-collar jobs.

The failures of institutions like schools to retain Latino students and provide them with a marketable education, resulting in a widening gap in graduation rates from high school and college. Latinos have by far the highest high-school dropout rate of any group in the nation; 1990 Census figures found that even among American-born Latinos, only 78 percent finished high school compared to 91 percent of whites and 84 percent of African-Americans.

Discrimination among employers who see Latino immigrants, particularly those who speak poor English, as disposable workers.

Experts acknowledge that the influx of millions of Latin American immigrants over the past 20 years - 2 million between 1990 and 1994 alone, the Census reports - have pulled income numbers down because immigrants tend to be poor.

``Everybody's going up the escalator but there's a big queue at the bottom and the queue's getting bigger, so the average number of steps people have gotten up has slipped,'' said Dowell Myers, a demographer at the University of Southern California who has studied the region's Latino population.

CAPTION(S):

Chart

Chart: A WIDENING GAP

White other groups are staying ahead of inflation, Hispanic families, whether American-born or newly arrived, are falling behind.

The New York Times