FedUpUSA

June Jobs: Immigrants Displacing American Workers…Again

 

By Edwin S. Rubenstein

President Obama’s July 1 speech reaffirming his commitment to “comprehensive immigration reform” a.k.a. amnesty completely ignored unemployment, needless to say.

But unemployment is not ignoring him and his Administration. The June employment data, released the next day, were bad—and immigrant displacement of American workers appears to have resumed with a vengeance.

Nonfarm payrolls shrank by 125,000 in June. After adjusting for the downsizing of government census takers and other public sector jobs, the June job count was up by 83,000.

Even that is disheartening: the median forecast from economists and economic forecasting firms was that the U.S. would add 110,000 private-sector jobs.

The economy needs to add about 130,000 to 150,000 jobs a month just to keep pace with new workers entering the market (still including, incredibly, an estimated 40,000 immigrants). The labor pool is already overflowing with about 15 million unemployed job seekers.

The average duration of unemployment is now 35.2 weeks. A year ago it was 24.4 weeks.

The other labor survey, of households rather than businesses, was even more downbeat. It reported a June job loss of 301,000. Here is the action for the month:

  • Total employment: -301,000  (-0.22 percent)
  • Hispanic employment: -99,000 (-0.50 percent)
  • Non-Hispanic employment: -202,000 (-0.17 percent)

Our measure of native labor displacement, the VDARE.COM American Worker Displacement Index (VDAWDI), uses Hispanics as a proxy for immigrants because some 40% of them are immigrants, retreated to 125.7 in June from 126.1 in May:

 

VDAWDI is calculated like this:

  • For every 100.0 Hispanics employed in January 2001 there were 123.2 in June 2010
  • For every 100.0 non-Hispanics employed in January 2001 there were 98.0 in June 2010
  • June’s VDAWDI equals 125.7 (=100 X 123.2/98.0)

We’ve always said Hispanic employment is an imperfect proxy for our primary interest: foreign-born employment and its implications for job prospects of native-born workers. In recent months the employment report has (finally!) begun tracking foreign- and native-born workers. The data are not seasonally adjusted, making month to month comparisons tricky. But we can compare this June with last June:

Employment Status by Nativity, June 2009-June 2010
(numbers in 1000s; not seasonally adjusted)
  Jun-09 Jun-10 Change % Change
  Foreign born, 16 years and older
Civilian population 35,258 36,155 897 2.5%
Civilian labor force 24,135 24,688 553 2.3%
Employed 21,787 22,541 754 3.5%
Unemployed 2,348 2,148 -200 -8.5%
   Unemployment rate (%) 9.7 8.7 -1.0 -10.3%
Not in labor force 11,123 11,467 344 3.1%
  Native born, 16 years and older
Civilian population 200,397 201,535 1,138 0.6%
Civilian labor force 131,786 130,079 -1,707 -1.3%
Employed 119,039 117,342 -1,697 -1.4%
Unemployed 12,747 12,737 -10 -0.1%
   Unemployment rate (%) 9.7 9.8 0.1 1.0%
Not in labor force 68,611 71,456 2,845 4.1%
Source: BLS, “The Employment Situation – June  2010,” July 2, 2010. Table A-7.PDF

In other words, over the past 12 months:

  • Foreign-born employment rose by 754,000, or 3.5%; natives lost 1,697,000 positions—a drop of 1.4%.
  • The immigrant unemployment rate fell by 1.0 point, to 8.7%; native unemployment rose 0.1 point, to 9.8%.
  • The immigrant labor force grew by 2.3%; the native labor force shrank 1.3% – a sign of discouragement.

This suggests that our VDAWDI measure has actually understated the displacement impact of immigration.

It occurs to us that the absence of seasonal adjustment does not negate the validity of month to month comparisons, so long as the bias affects native and foreign-born workers equally. After all, our interest is not just economics but fairness—i.e., how native workers fare relative to their foreign-born counterparts.

That said, June was particularly bad for native-born workers:

June Job Trends: Foreign- v Native-born
  May ’10 June ’10 Change % change
  Employment (mils.)
  Foreign-born 22,125 22,541 416 1.88%
Native-born 117,372 117,342 -30 -0.03%
  Unemployment rate (%)
  Foreign-born 8.6 8.7 0.1 1.16%
Native-born 9.5 9.8 0.3 3.16%
Not seasonally adjusted.

While (seasonally unadjusted) foreign-born employment rose 416,000, or nearly 2 percent, native-born employment declined by 30,000 in June. Native unemployment rose by 0.3 points, while foreign-born unemployment was up by 0.1 point.

Overarching everything is the burgeoning population gap between these groups.  Over the past year the foreign-born population of working age rose 2.5%—more than four-times the 0.6% rate for natives.

It’s interesting that June appears to have been a relatively poor month for Hispanics but a very good one for foreign-born workers. One possibility: native-born Hispanics are losing out to foreign-born Hispanics.

Why shouldn’t Hispanics get to share in this quintessentially American experience—being displaced by immigrants?

Edwin S. Rubenstein (email him) is President of ESR Research Economic Consultants in Indianapolis.

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