National Data | Terrible January Jobs Report Wipes Out 2017 Trump Effect. Maybe A Statistical Quirk—But America NEEDS AN IMMIGRATION MORATORIUM
February 06, 2018, 05:42 PM
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Something unfunny happened on my way to work on Friday February 2: The Trump Effect—the  multi-month year-over-year decline in the foreign-born workforce population and American worker displacement, apparently brought about by improved enforcement, was abruptly wiped out by the just-released jobs report. It may be a statistical quirk. But, at a moment when President Trump is involved in yet another DACA dalliance,  it brings home the fact that enforcement alone is not enough: ultimately, America needs an immigration moratorium.

 

What started after the 2016 election as a reduction in the rate of increase in the foreign-born population of working age turned into an outright retreat by late 2017. The last five months of 2017 saw year-over-year declines of 138,000 in August, 143,000 in September, 117,000 in October, 64,000 in November, and 77,000 in December.

 

But that powerful trend was broken dramatically in January:

 

 

According to the Labor Department employment report released Friday, there were 1.246 million more working-age immigrants (legal and illegal) in January 2018 than in January 2017—a increase of 3.01%. The corresponding American population rose by just 0.68% over this period.

 

Why? We can’t discount the possibility that another unrecognized illegal alien surge is underway. Border watchers say it is. But the numbers involved, even gross, are not large enough to explain the abrupt turn from immigrant workforce population declines in late 2017 to a sudden increase of 1.2 million+ in the first month of 2018.

 

The more likely candidate: a statistical artifact—reporting changes implemented in 2018. The January 2018 population figures for both immigrants and native-born Americans reflect “new population controls” used by BLS for estimating this year’s working-age population. But earlier years are not revised, so population data for this January is not directly comparable with data for January 2017 or earlier years.

 

At this point, it is not clear whether the Trump-era declines in foreign-born population we have been tracking will persist. A better reading will be provided by next month’s reading. If it declines, or rises less than in January, we will declare the “Trump effect” to be intact—albeit possibly on a field where revised statistics have pushed the goal posts back

 

More bad news: Immigrant workers took all the jobs created in January according to the Household Survey, which records workers’ immigrant status (but not their legal status). The Household Survey reported 403,000 jobs were created for the last month—about twice the 200,000 figure found by the far more widely-cited Payroll Survey.

 

In January:

  • Immigrant employment rose by 564,000—up by 2.16%
  • Native-born American employment fell by 155,000—down by 0.12%
  • The immigrant employment index, set to 100.0 in January 2009, rose from 120.9 to 123.5.
  • The native-born American employment index fell from 106.0 to 105.9.
  • The New VDARE American Worker Displacement Index (NVDAWDI), our term for the ratio of immigrant to native-born employment growth indexes, rose from 114.0 to 116.6 (100X (123.5/105.9))

The large rise in immigrant employment last month may also turn out to be statistical noise rather than the end of the Trump effect. But as far native-born American workers are concerned, it ruined the one-year anniversary of his Administration.

 

Immigrant employment this January was 2.85% above the level of January 2017; native-born American employment rose 1.28% over the same period.  Until December’s setback, immigrant job growth had lagged native-born job growth in 2017.

 

Furthermore, of course, Trump has not yet come close to repairing the damage done by eight years of Obama. Native-born American workers lost ground to their foreign-born competitors throughout the Obama years, and, as we have seen, this trend accelerated significantly in the months leading up to the election:

 

 

Native-born American employment growth is represented by the black line, immigrant employment growth is in red, and NVAWDI—the ratio of immigrant to native-born American job growth—is in yellow.

 

Another way of looking at American Worker Displacement: the immigrant share of total U.S. employment rose steadily, albeit erratically, throughout the Obama years. It fell sharply in the months after the 2016 election, but roared back to Obama-era levels in the spring. Then it fell, but Immigrants held 17.31% of total jobs in January—up sharply from December 16.99%.

 

 

A detailed snapshot of American worker displacement over the past year is available in the Employment Status of the Civilian Population by Nativity table published in the monthly BLS Report.

 

 

Employment Status by Nativity, Jan. 2017- Jan. 2018
(numbers in 1000s; not seasonally adjusted)
  Jan-17 Jan-18 Change % Change
  Foreign born, 16 years and older
Civilian population 41,379 42,625 1,246 3.01%
Civilian labor force 27,144 27,754 610 2.25%
     Participation rate (%) 65.6 65.1 -0.5 -0.76%
Employed 25,721 26,453 732 2.85%
Employment/population (%) 62.2 62.1 -0.1 -0.16%
Unemployed 1,423 1,300 -123 -8.64%
Unemployment rate (%) 5.2 4.7 -0.5 -9.62%
Not in labor force 14,235 14,871 636 4.47%
  Native born, 16 years and older
Civilian population 212,703 214,156 1,453 0.68%
Civilian labor force 131,532 132,283 751 0.57%
     Participation rate (%) 61.8 61.8   0.0 0.00%
Employed 124,806 126,395 1,589 1.27%
Employment/population (%) 58.7 59.0    0.3. 0.51%
Unemployed 6,726 5,889 -837 -12.44%
Unemployment rate (%) 5.1 4.5 -0.6 -11.76%
Not in labor force 81,171 81,872 701 0.86%
Source: BLS, The Employment Situation-January 2018, Table A-7, February 2, 2018.
PDF

 

 

Over the last 12 months (January 2017 to January 2018):

  • The immigrant labor force (employed plus looking for work) grew 4-times faster than the native-born labor force: 2.25% versus 0.57%. ADVANTAGE IMMIGRANTS
  • Immigrant employment grew 2.2-times faster than immigrant employment: 2.85% versus 1.27%. ADVANTAGE IMMIGRAMTS
  • The labor-force participation rate (LPR), a sign of worker confidence and mobility, fell by 0.5 points for immigrants and was unchanged for native-born Americans. At 65.1%, the immigrant LPR this January was considerably above the native-born American rate (61.8%.) ADVANTAGE IMMIGRANTS
  • The number of unemployed Americans fell by 123,000—down 8.6%, while the number of unemployed immigrants fell 837,000—down by 12.5%. ADVANTAGE IMMIGRANTS

Small white pill: Trump may not have delivered (yet) on his promise to bring back the factory and coal jobs so many of his supporters lost during the Obama years. But he does seem to have put more money in pockets of his voters. Wages grew 2.9% in January—a notable rise from December’s 2.5% Moreover, wage and salary growth for the likes of factory workers, builders and drivers outstripped that for professionals and managers last month.

 

This outcome is consistent with a reduction in the immigrant share of employment—and, at this point, if immigration law continues to be enforced, we still expect subsequent months will confirm that this Trump Effect is still intact.

 

However, this terrible month reinforces the point that enforcing current immigration law is not enough—the results are too fragile, even apart from the damage that would be done by any future Democratic Administration.

 

America needs, not the very modest immigration reduction proposed in the RAISE Act, and certainly not the essentially symbolic reductions in the current White House proposal, but a flat-out immigration moratorium.

 

Let’s get on with it.

 

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