Most Jobs Created since 2008 Go to Immigrants

By Edwin S. Rubenstein
Published in The Social Contract
Volume 26, Number 2 (Winter 2016)
Issue theme: "Immigration Briefing Book"
http://www.thesocialcontract.com/artman2/publish/tsc_26_2/tsc_26_2_rubenstein_1.shtml




Unemployment is up, the unemployment rate is down, and wages are showing signs of coming out of a long slumber. Businesses added 268,000 jobs in October 2015, making it the 68th consecutive month of private sector job growth. If you really believe the MSM (main-stream media)’s economic narrative, we all should be singing “Happy Days Are Here Again,” FDR’s old torch song.

So why are so many Americans so glum?

Most jobs created since the Great Recession have gone to immigrants, forcing native-born workers into lower-paying jobs or early retirement. Many younger natives are so discouraged that they have given up their job search. Many have been displaced by immigrants willing to work for wages deemed unacceptable by native-born workers.

While immigrants account for about 13 percent of the U.S. population, more than two-thirds of all jobs created since 2008 went to them:

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Glowing reports of America’s economic recovery ignore the glaring gap between native-born job growth—up a paltry 0.9 percent since the Great Recession—and immigrant job growth, which grew by 9.7 percent over the same period. As recently as 2014 native-born employment was below the level attained in 2008:

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The graphic shows that for every 100.0 natives working in 2008, only 99.4 were working in 2014. This means that despite six-years of economic “recovery,” fewer natives held jobs in 2014 than before the economy tanked in 2008. By contrast, for every 100.0 immigrants working in 2008, 107.2 were working in 2014, and by 2015, 109.7 held jobs.

Part of the disproportionately large foreign-born job gain reflects higher immigrant population growth—especially for those of working age (16 years and older). But population growth alone cannot explain the immigrant job advantage: Working-age immigrants are also more likely to participate in the labor force than native-born persons in the same age bracket. The Labor Force Participation Rate (LPR) measures the percent of working-age people in a particular group who are in the labor force, i.e., either working or looking for work. Since 2008 LPRs have declined for both natives and the foreign-born. However, immigrant LPRs have remained well above those of natives throughout this period:

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A group’s LPR is a sign of its economic confidence. When employment opportunities are perceived as being more abundant, and persons are more confident in their job search, LPR will rise. When job opportunities are seen as scarce, or competitors—foreign immigrants, for example—are perceived as having unfair advantages in the job market, individuals will not even bother looking for jobs, and drop out of the labor force entirely, LPR will fall.

The LPR for immigrants in 2014 was 66.0 percent, compared with 62.3 percent for the native-born. The participation rate for the foreign-born was little different from the prior year, while that of native-born continued to trend down. For men the differences are considerably larger: the LPR of foreign-born men was 78.7 percent in 2014, more than 10 percentage points higher than the rate of 67.4 percent for native-born men.

These numbers are from the Household Employ-ment Survey, a government survey that collects data on the employment status as well as the race, ethnicity, and nativity of workers in each household. If these numbers do not look familiar, it is because the mainstream media ignores them. The MSM folks focus on the Payroll Employment Survey, which does not collect information on the nativity of workers—perhaps because most of the companies surveyed do not ask, and do not want to know. Many feign ignorance on the number of illegal aliens in their employ.

Since the start of the Obama Administration I have tracked the monthly changes in foreign-born and native-born employment reported in the Household Survey. Native-born workers have lost ground to their foreign-born competitors throughout the Obama years. We highlight this trend in our New VDARE.com American Worker Displacement Index (NVDAWDI) graphic:

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Foreign-born employment growth is the black line, native-born employment growth is in dark gray, and NVAWDI—the ratio of immigrant to native-born American job growth—is in light gray. The index starts at 100.0 in January 2009 for both immigrants and native-born Americans, and tracks their employment growth since then.

From January 2009 to October 2015, foreign-born employment rose by 3.373 million, up 15.6 percent. The immigrant employment index rose from 100.0 to 115.6.

Native-born American employment rose by 3.526 million or by 2.9 percent. The native-born American employment index rose from 100.0 to 102.9.

NVDAWDI (the ratio of immigrant to native-born employment growth indexes) rose from 100.0 to 112.3 [100x(115.6/102.9)].

During the Obama years immigrant employment has risen more than 5 times faster than native-born employment—15.6 percent versus 2.9 percent. In many unskilled occupations the job growth gap is far larger, owing to the disproportionate number of foreign-born workers.

The presence of foreign-born workers lowers wages for all Americans. Harvard Professor George Borjas estimates that immigrants arriving between 1980 and 2000 reduced the average annual earnings of native-born males by about 4 percent. Among high school dropouts, who roughly correspond to the poorest tenth of the workforce, the impact was even larger—a 7.4 percent wage reduction. Nor are native-born college graduates immune; their income is 3.6 percent lower due to the two decades worth of competing immigrants.

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This helps explain why wages have risen an average of only 2 percent per annum over the past few years, well below what was the norm the last time unemployment rates were this low for this long.

In February 2009, President Obama’s first full month in office, 14.97 percent of all persons working in the U.S. were foreign-born, according to that month’s Household Employment Survey. Since then the foreign-born share has risen steadily, albeit erratically.

In October 2015 (latest data at this writing) the foreign-born share was 16.78 percent. That is up from 16.73 percent in September, 16.70 percent in August, and 16.50 percent in July. In only 10 of the 82 months of Obama’s presidency have immigrant workers accounted for a greater share of U.S. employment than they did last month.

October’s immigrant employment share was 1.81 percentage points above the level recorded at the start of Mr. Obama’s administration. That may not sound like a lot, but with total employment at 149.1 million, a 1 percentage point rise in the foreign-born share translates to as many as 1.491 million displaced native-born workers. This means that Obama-era immigration may have pushed as many as 2.70 million (1.81 times 1.491 million) native-born Americans onto the unemployment rolls.

A job is the surest road out of poverty. It should come as no surprise, therefore, that the poverty rate for immigrants has declined during the recovery, while the poverty rate for native-born persons is higher today than it was at the start of the recovery.

About the author

Edwin S. Rubenstein is a regular contributor to The Social Contract, is president of ESR Research, economic consultants. As a journalist, Mr. Rubenstein was a contributing editor at Forbes and economics editor at National Review, where his “Right Data”column was featured for more than a decade. He is the author of The Earned Income Tax Credit and Illegal Immigration: A Study in Fraud, Abuse, and Liberal Activism.

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