National Data: September Jobs—Immigrants Take It All For Second Straight Month
Print Friendly and PDF
The good news: two more MSM sources have noticed the immigration dimension to the employment data that has been covering since 2004: Jobs up only for immigrants, +14,000, down 262,000 for 'native-borns', by Paul Bedard, Washington Examiner, October 2, 2015; The US Has Added Three Times More Foreign-Born Workers Than Native-Born Since December 2007, by Tyler Durden, Zero Hedge, October 2, 2015.

The bad news: MSM attention to this critical issue tends to come and go. But carries on regardless!

The worse news:

There’s nothing good in this morning’s report. We had very low levels of job creation, wage growth isn’t budging, and the unemployment rate would have risen if the labor force participation rate hadn’t fallen.—Carl Tannenbaum, chief economist, Northern Trust in Chicago

Grim Jobs Report Is Likely to Delay a Move by the Fed on Rates, By Patricia Cohen, NYT, October 2, 2015

Tannenbaum was referring to the dismal employment numbers released on Friday. The economy added a mere 142,000 jobs in September, following an even weaker gain, of 136,000, after a downward revision, in August. The past two months rank as the worst back-to-back employment reports in the last three years.

Like most financial sector economists, Tannenbaum was probably blindsided. A month ago, most of them saw the U.S. as a paragon of economic strength and stability in a world where others—China and the Eurozone, for example—were faltering. Janet Yellen failed to raise interest rates? Not to worry: The Fed chief simply wanted to alleviate the distress occurring in other places—not here.

That view took a hit on Friday.

The headline employment figures suggest that the economy is slowing. The “other” employment survey, of households rather than businesses, suggest that it is shrinking—and may already be in recession for native-born American workers:

In September:

  • Total employment fell by 236,000 – down by 0.2%
  • Native-born American employment fell by 252,000 – down by 0.2%
  • Immigrant employment rose by 16,000 – up by 0.1%
The 252,000 decline in native-born American employment last month was the largest monthly drop since August 2014, when a whopping 542,000 Americans lost jobs.

Over the past two months native-born American employment has fallen by 374,000, or by 0.3%, while the number of immigrants at work has risen by 334,000, a gain of 1.4%.

American workers have lost ground to their foreign-born competitors throughout the Obama years. We highlight this trend in our New American Worker Displacement Index (NVDAWDI) graphic:

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 September 2015:

  • Immigrant employment rose by 3.251 million, up 15.0%. The immigrant employment index rose from 100.0 to 115.0.
  • Native-born American employment rose by 3.328 million or by 2.8%. The native-born American employment index rose from 100.0 to 102.8.
  • NVDAWDI (the ratio of immigrant to native-born employment growth indexes) rose from 100.0 to 111.0. (100X(115.0/102.8)
Immigrant employment has risen 5.4 times faster than native-born American employment—15% versus 2.8%—during the Obama years. In many unskilled occupations the job growth gap is far larger, owing to the disproportionate number of foreign-born workers there.

The foreign-born share of total U.S. employment has risen steadily, albeit erratically, throughout the Obama years:

In February 2009, President Obama’s first full month in office, 14.97% of all persons working in the U.S. were immigrants. In the latest month (September 2015) 16.73% of employed persons were immigrants. That’s up from 16.70% in August and 16.50% in July.

In only 10 of the 81 months of Obama’s Presidency have immigrant workers accounted for a greater share of U.S. employment than they did last month.

To put it another way: September’s immigrant employment share was 1.79 percentage points above the level recorded at the start of the Obama Administration.

With total employment at 148.8 million, each one percentage point rise in the foreign-born share translates to as many as 1.489 million displaced American workers. This means that Obama-era immigration may have pushed as many as 2.53 million (1.70 times 1.489 million) 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, Sept. 2014- Sept. 2015

(numbers in 1000s; not seasonally adjusted)

  Sep-14 Sep-15 Change % Change
  Foreign born, 16 years and older
Civilian population 39,860 40,314 454 1.1%
Civilian labor force 26,238 26,132 -106 -0.4%
     Participation rate (%) 65.8% 64.8% -1.0% -1.5%
Employed 25,019 24,928 -91 -0.4%
Employment/population % 62.8% 61.8% -1.0% -1.6%
Unemployed 1,218 1,204 -14 -1.1%
Unemployment rate (%) 4.6% 4.6% 0.0% 0.0%
Not in labor force 13,622 14,182 560 4.1%
Native born, 16 years and older
Civilian population 208,587 211,011 2,424 1.2%
Civilian labor force 129,666 130,475 809 0.6%
     Participation rate (%) 62.2% 61.8% -0.4% -0.6%
Employed 121,922 124,052 2,130 1.7%
Employment/population % 58.5% 58.8% 0.3% 0.5%
Unemployed 7,744 6,423 -1,321 -17.1%
Unemployment rate (%) 6.0% 4.9% -1.1% -18.3%
Not in labor force 78,921 80,536 1,615 2.0%
Source: BLS, The Employment Situation - September 2015, Table A-7, October 2, 2015. PDF
From September 2014 to September 2015:
  • Foreign-born employment shrank by 91,000 – a 0.4% decline - while native-born American employment rose by 2.130 million – up by 1.7%. A rare event that we expect will be reversed in future months
  • Labor-force participation (LFP) rates—a sign of worker confidence—fell for both native-born American and immigrant workers; at 64.8%, the immigrant LFP is still well above that of natives, 61.8%. Advantage immigrants
  • The native-born American unemployment rate fell sharply, to 4.9% from 6.0%; foreign-born unemployment rate was steady, at 4.6%. Baby-boomer retirements are reducing the native-born American labor force, thereby keeping native-born American unemployment rates low
  • The number of immigrant unemployed dropped by 14,000 or 1.1%. The corresponding figures for native-born Americans: 1,321,000 or 17.1%. Another example of how Baby Boomer retirements make native-born American employment statistics appear better than they really are
Also note in the table above: for the first time in many months, the population of working-age immigrants grew a lower rate than that of native-born Americans, by a mere 454,000 over the past 12 months, considerably below the increases reported throughout this year. We’ve been interested in this subject for some time, since the earlier figures were far in excess what Homeland Security says is the total annual legal influx into the country. My guess: September’s numbers are an anomaly—one month’s worth of random noise—that will probably be reversed.

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


Print Friendly and PDF