Federal Reserve Chairman Ben Bernanke has just announced that he is tying interest rates to unemployment. [Bernanke Wields New Tools to Reduce Unemployment Rate, by Caroline Salas Gage & Craig Torres, Bloomberg, Dec 13 2012.]
Of course, this is a recipe for inflation. But it’s particularly odd that Bernanke ignores the fact that as much as one-third of average U.S. monthly labor force growth is due to legal immigration.
In effect, the Fed’s expansionary policy is simply going to suck in more foreign workers from around the world.
There’s a hole in this bucket.
We simply cannot rely on the Main Stream Media to point this out. (That’s why you should give, tax-deductibly, to VDARE.com).
Rarely have I seen MSM reporters so misrepresent what actually happened in America’s labor market as with November’s employment report.
It showed a “…much better than expected” job gain of 146,000, according to the New York Times’s Nelson D. Schwartz (Message him on Twitter).
Schwartz added that
[e]conomists had estimated the Labor Department would report that only 86,000 jobs were created in November and that the rate of unemployment would remain flat at 7.9 percent.
[U.S. jobless rate falls to 7.7% after adding 146,000 jobs, December 7, 2012]
Well, the unemployment rate did indeed fall to 7.7% and this was indeed, as Schwartz noted, “the lowest since December 2008.”
But the unemployment rate decline had nothing to do with the reported rise in employment. In fact, the Household Employment Survey, used by the Federal Government to calculate unemployment rates, reported a 122,000 job loss in the month of November.
The unemployment rate fell basically because the U.S. labor force shrank by even more than employment—by a whopping 350,000 in November. The labor force participation rate (percent of the working age population working or looking for work) fell to 63.6%. That is among the lowest participation rates in 30 years.
Participation rates typically tank when potential job seekers lose confidence in the job market.
Our analysis of Household Survey data actually shows that immigrants suffered slightly larger percentage job declines than native-born Americans in November:
One possible reason for this: Hurricane Sandy’s impact on the Blue State East Coast, heavily laden with legal and illegal immigrants.
Bur this is probably just statistical noise. The overall trend of the Obama years has been disastrous for native-born American workers.
The deterioration in native-born American employment in both absolute terms and, more dramatically, relative to foreign-born employment, is highlighted in our New VDARE.com American Worker Displacement Index (NVDAWDI):
Native employment growth is in blue, immigrant employment growth is pink, and NVAWDI—the ratio of immigrant to native job growth—is yellow.
From January 2009 to November 2012:
Thus NVDAWDI was more or less steady in November, down infinitesimally to 107.8 from 108.0 in October.
But since President Obama took office, native-born American job losses are about one-third the immigrant job gains.
Put differently, during the Obama Era, an average of one native-born American worker has been displaced per every three foreign-born workers added to the U.S. workforce.
Obama’s problem: Moving the economy to 5% unemployment—a return to the rate that prevailed when the recession began—would require job growth of about 270,000 a month.
But as much as one-third of that would be required just to absorb the average monthly increase in legal immigration.
Edwin S. Rubenstein (email him) is President of ESR Research Economic Consultants in Indianapolis.
