National Data: Immigrant Displacement Of American Workers Intensifies—And A New Immigration Surge Is Underway
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Most economists expected job creation to slow a bit in March, but few expected such a steep drop: the economy created just 126,000 jobs last month, the smallest gain since the end of 2013. Still worse, reported job gains for the first three months of the year were revised downward by a combined 69,000. There’s now debate over whether the drop is just a temporary setback, due harsh winter weather, a now-ended port strike and other temporary factors—or whether a broader economic slowdown, or even a mild recession, is underway. As usual, the immigration dimension is ignored. But the “other” employment survey—of households rather than businesses—and suggests the recession scenario is already in play, at least for native-born Americans.

March marked the second consecutive month in which native-born Americans lost jobs while foreign-born workers gained them:

  • Total employment rose by a mere 34,000—statistically unchanged
  • Native-born American employment fell by 81,000—down by 0.1%
  • Foreign-born employment rose by 115,000 - up by 0.5%
Over the past two months native-born American employment has declined by a total of 96,000 positions—a 0.1% decline. Foreign-born employment rose by 226,000—a 0.9% gain.

The falling national unemployment rate—it remained at a post-recession low of 5.5% in March—has obscured the skewed nature of employment gains. Thus blacks, arguably the group most at risk of being displaced by unskilled immigrants, have not fared well. Last month, Valerie Wilson [email her] a black economist with the liberal Economic Policy Institute, said:

“The unemployment rate for black communities is at a crisis level, even as the economy gets closer and closer to a full recovery.”

[Job Growth Was Fantastic Last Month. So Why Aren’t Wages Rising More? By Neil Irwin, New York Times, March 6, 2015]

Black unemployment has always been a multiple of the white rate, but since the Great Recession that gap has increased. While white unemployment dropped to 4.5 percent in the last quarter of 2014, for example, black unemployment remained at 11 percent. Median hourly wages for black workers have dropped by 3.6 percent since the start of the recession, twice as much as for whites.

Bad weather, falling oil prices, and a strong dollar are essentially color-blind so far as their impact on native-born American employment and wages is concerned. Immigration is not. Yet the chattering class is strikingly reluctant to invoke it.

Native-born American workers have lost ground to their foreign-born competitors throughout the Obama years. The trend has accelerated over the past year, as is made clear in our New American Worker Displacement Index (NVDAWDI) graphic posted (see top of article).

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

From January 2009 to March 2015:

  • Foreign-born employment rose by 3.408 million, or by 15.7%. The immigrant employment index rose from 100.0 to 115.7.
  • Native-born American employment rose by 2.702 million or by 2.2%. The native-born American employment index rose from 100.0 to 102.2
  • NVDAWDI (the ratio of immigrant to native-born American employment growth indexes) rose from 100.0 to 113.2 (100X(115.7/102.2)
The key variable in calculating American Worker Displacement is the foreign-born share of total U.S. employment. In Barack Obama’s first full month in office (February 2009) 14.97% 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.

The immigrant share of total employment rose to 16.89% in March, up from 16.82% the prior month. In only three of the 75 months of Obama’s tenure have immigrant workers accounted for a larger share of total U.S. employment than they did last month.

March’s foreign-born employment share was 1.92 percentage points above the level recorded in February 2009, the first full month of Mr. Obama’s administration.

With total employment now at a record 148.3 million, every one percentage point rise in the foreign-born employment share translates to as many as 1,483,000 displaced native-born workers. Implication: Obama-era immigration may have pushed as many as 2,844,000 (1.92 times 1,483,000) native-born Americans onto the unemployment rolls.

A detailed snapshot of American worker displacement over the past year is seen in the “Employment Status of the civilian population by nativity” table published in the monthly BLS report:

Employment Status by Nativity, March 2014-March 2015
(numbers in 1000s; not seasonally adjusted)
  Mar-14 Mar-15 Change % Change
  Foreign born, 16 years and older
Civilian population 38,557 40,198 1,641 4.3%
Civilian labor force 25,474 26,328 854 3.4%
Participation rate (%) 66.1% 65.5% -0.6 %pts. -0.9%
Employed 23,811 24,037 226 0.9%
Employment/population % 61.8% 62.0% 0.2 %pts. 0.3%
Unemployed 1,662 1,391 -271 -16.3%
Unemployment rate (%) 6.5% 5.3% -1.2 %pts. -18.5%
Not in labor force 13,083 13,870 787 6.0%
Native born, 16 years and older
Civilian population 208,701 209,882 1,181 0.6%
Civilian labor force 130,154 129,990 -164 -0.1%
Participation rate (%) 62.4% 61.9% -0.5 %pts. -0.8%
Employed 121,279 122,698 1,419 1.2%
Employment/population % 58.1% 58.5% 0.4 %pts. 0.7%
Unemployed 8,875 7,292 -1,583 -17.8%
Unemployment rate (%) 6.8% 5.6% -1.2 %pts. -17.6%
Not in labor force 78,547 79,892 1,345 1.7%
Source: BLS, The Employment Situation - March 2015,Table A-7, April 3, 2015. [ PDF]
Over the past 12 months:
  • The foreign-born civilian labor force—the number of immigrants working or looking for work—rose by 854,000 (up by 3.4%), while the corresponding native-born American labor force declined by 164,000 (a drop of 0.1%) Immigrants are displacing Americans in the labor force.
  • Employment rose, and unemployment rates fell, for both immigrants and native-born Americans. But at 5.3%, the seasonally-unadjusted unemployment rate for immigrants was below the 5.6% rate for Americans.
  • The Labor Force Participation Rate, a sign of worker confidence, fell for both native-born Americans and immigrants. Nevertheless, the native-born LPR (61.9%) remains well below that of immigrants (65.5%.) Advantage immigrants.
Finally: Once again, we are struck by the foreign-born population figures. The Labor Department estimates that 1.641 million immigrants of working age (16 and over) entered the country between March 2014 and March 2015. That is well above the total legal immigration figure—of about 1 million per annum—we have been citing.

Legal or illegal, a new immigration surge appears to be underway—right in time for the 2016 election.

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

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