National Data | August Jobs: American Worker Displacement Reaches Record High


Is reality dawning? Celebrity campaign consultant Dick Morris, who has often been on the other side of the immigration issue, wrote last week that “[c]urbing illegal immigration is the jobs and the income inequality issue of our time. Seize it” [Wage Gap A Republican Issue, The Hill, September 2, 2014]. (Why not legal, Dick?) Conservatism Inc. blogger John Hinderaker reacted to today’s disappointing job numbers by saying flatly Let’s Not Drive Down Wages With Immigration “Reform” [Powerline, September 5, 2014]. And Red State Democrats are plainly panicking, although Obama apparently doesn’t care Obama:Unilateral Amnesty ‘Soon,’ Likely After Election, by Neil Munro, Daily Caller, September 5, 2014].

And all this without the news, still only reported on VDARE.com, that the August job data shows immigrant displacement of American workers has spiked unprecedentedly—to reach a level unseen since we started tracking it in 2004.

Employers added just 142,000 positions in August, the lowest rate since December. It was the first sub-200,000 gain in six months, raising new questions as to the strength and longevity of the economic recovery. [Jobs report disappoints, by M.J. Lee and Patrick Temple-West, POLITICO, September 5, 2014]

But a far bigger story springs out from the “other” job survey, of households rather than businesses. Household survey data indicates that the foreign-born share of U.S. employment was at a record—not just for August but for any month since the start of the Obama era in January 2009.

The Household Survey reports an abysmal 16,000 jobs were created last month. Behind the anemic growth figure are two enormous job shifts—a quantum rise in immigrant employment coupled with an equally large decline in native-born American employment.

In August

  • Total employment rose by 16,000, or by 0.01%
  • Native-born American employment fell by 643,000 or by 0.53%
  • Immigrant employment rose by 659,000, or by 2.76%

The gap between immigrant and native-born American job growth pushed our New VDARE.com American Worker Displacement Index (NVDAWDI) to a record high. The August spike is clear in the following graphic:

1vdawdi

Native-born American employment growth is the blue 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 native-born Americans and immigrants in January 2009, and tracks their employment growth since then.

From January 2009 to August 2014:

  • Foreign-born employment rose by 2.945 million, or by 13.8%. The immigrant employment index rose from 100.0 to 113.6.
  • Native-born American employment rose by 1.202 million or by 1.0%. The native-born American employment index rose from 100.0 to 101.0.
  • NVDAWDI (the ratio of immigrant to native-born employment growth indexes) rose from 100.0 to 112.5 (100X(113.6/101.0)

The key variable for calculating American worker displacement is the foreign-born share of total U.S. employment. In February 2009 – Obama’s first full month in office – 14.9% of all individuals working in the U.S. were foreign-born, according to that month’s Household employment survey. In August of this year the immigrant share was a record 16.8%.

While the immigrant share of total employment has risen steadily, albeit erratically, since the start of the Obama years, last month’s jump is unprecedented:

2vdawdi

With total U.S. employment running at about 146 million, every one-tenth of one percent increase in share translates to 146,000 more workers. From July 2014 to August 2014 the immigrant share of total employment rose from 16.35% to 16.80%—a gain of 0.45 percentage points.

That implies that as many as 657,000 native-born Americans may have lost jobs due to immigration.

Other data seem to confirm the August discomfort felt by native-born American workers. While the national unemployment rate fell, unemployment rates for whites and blacks remained unchanged—at 5.3% for the former and a lofty 11.4% for the latter. By contrast, Hispanic unemployment fell to 7.5% in August from 7.8% in July.

A more detailed snapshot of American worker displacement over the past year is seen in Household Survey data published in the monthly job report:

Employment Status by Nativity, Aug. 2013-Aug. 2014(numbers in 1000s; not seasonally adjusted)
  Aug-13 Aug-14 Change % Change
Foreign born, 16 years and older
Civilian population 38,197 39,289 1,092 2.9%
Civilian labor force 25,540 26,046 506 2.0%
     Participation rate (%) 66.9% 66.3% -0.6 %pts. -0.9%
Employed 23,833 24,639 806 3.4%
Employment/population % 62.4% 62.7% 0.3 %pts. 0.5%
Unemployed 1,707 1,407 -300 -17.6%
Unemployment rate (%) 6.7% 5.4% -1.3 %pts. -19.4%
Not in labor force 12,658 13,243 585 4.6%
Native born, 16 years and older
Civilian population 207,762 208,940 1,178 0.6%
Civilian labor force 130,431 130,388 -43 0.0%
     Participation rate (%) 62.8% 62.4% -0.4 %pts. -0.6%
Employed 120,676 122,008 1,332 1.1%
Employment/population % 58.1% 58.4% 0.3 %pts. 0.5%
Unemployed 9,755 8,381 -1,374 -14.1%
Unemployment rate (%) 7.5% 6.4% -1.1 %pts. -14.7%
Not in labor force 77,331 78,552 1,221 1.6%
Source: BLS, The Employment Situation – August 2014,Table A-7, September 5, 2014. PDF

 Over the past 12 months:

  • Immigrant employment rose by 806,000 positions, a 3.4% increase; native-born Americam employment rose by 1,332,000 positions, a 1.1% increase.
  • The native-born American unemployment rate fell from 7.5% to 6.4%, a drop of 14.7%; The foreign-born unemployment rate fell from 6.7% to 5.4%, a drop of 19.3%.
  • Labor force participation rates fell for both native-born Americans and immigrants, but the immigrant LPR (66.3%) remained significantly above the native-born LPR (62.4%).
  • The working-age population of immigrants rose by 1,092,000, or by 2.9%. The comparable population growth for native-born Americans: 1,176,000, or by 0.6%.

Immigrant employment is growing 3 times faster than native-born American employment. That apparently is not good enough for a White House pondering, not just an Administrative Amnesty, but issuing hundreds of thousands of new green cards for high-tech workers and the relatives of U.S. citizens. [White House considers proposals to sharply increase legal immigration, by David Nakamura, Washington Post, August 27, 2014.]

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