VDAWDI Vindicated—Immigration Hitting American Workers Hard

So gargantuan is America's post-1965 immigration disaster that there is now an immigration dimension to every public issue.  Nowhere is this more so than in employment—and nowhere is the phenomenon more pressing, given that unemployment has now reached a level (8.5 percent) not seen since 1983—and is projected to reach double digits by year end.

 

As usual, the federal government's statistics on immigration's impact of on employment are so fragmentary that it almost appears someone doesn't want to know. Specifically, it does not release monthly data on immigrant vs. native-born American employment.

 

Because of this malfeasance, in 2004 we unveiled our proprietary effort to track American worker displacement: the VDARE.com American Worker Displacement Index (VDAWDI). We tracked monthly growth of Hispanic versus non-Hispanic employment, expressing both as an index number of 100 as of the start of the Bush Administration in January 2001. We used Hispanics as a proxy for immigrant employment because such a high fraction of working age Hispancs (54 percent) a are immigrants.

 

VDAWDI rose dramatically from January 2001 to late 2007, when it reached 124.1.. Then it stalled and finally declined when employment collapsed in late 2008.

 

But despite the recent decline, Hispanic (= immigrant) employment is still (as of March 2009) up a whopping 22 percent. In contrast, non-Hispanic (= American) employment was actually lower than it was at the start of the Bush administration.

 

Once a year, the Bureau of Labor Statistics does release data on immigrant employment. It did so on March 26^th of this year.

In general, this foreign-born employment data confirm our long-standing estimates of American Worker Displacement. If anything, we were too conservative. Specifically, in 2008, immigrant employment was, on average, 33.7% higher than in 2000, whereas native-born employment was only 3.8% higher. This compares to VDAWDI's figures: a 22 percent gain for immigrants versus a slight decline for natives from January 2001 to March 2009.

 

Table 1  Native- v. Foreign-born Employment, 2000-2008
	Total (1,000s)		Change from prior year		% change from prior year
Year	US-born	Foreign-born	US-born	Foreign-born	US-born	Foreign-born
2000	118,254	16,954	492	1,228	0.4%	7.8%
2001	117,627	17,445	(627)	491	-0.5%	2.9%
2002	117,546	18,991	(81)	1,546	-0.1%	8.9%
2003	118,005	19,731	459	740	0.4%	3.9%
2004	118,997	20,256	992	525	0.8%	2.7%
2005	120,708	21,022	1,711	766	1.4%	3.8%
2006	122,202	22,225	1,494	1,203	1.2%	5.7%
2007	123,079	22,967	877	742	0.7%	3.3%
2008	122,703	22,660	(376)	(307)	-0.3%	-1.3%
Change, 2000-2008	4,449	5,706
% change, 2000-2008	3.8%	33.7%
Source: BLS, "Foreign-born Workers: Labor Force Characteristics in 2008," News Release, March 26, 2009. (2007, 2008) PDF Unpublished BLS data. (2000-2006)

 

(Foreign-born workers include legal immigrants, illegal aliens, refugees, and workers here on temporary work visas. These are annual averages, and only partially reflect the economic meltdown that started in late 2008.)

 

The unemployment rate for immigrants had been below that of natives since 2005. But it reached parity in 2008, when 5.8 percent of both groups were unemployed. Interestingly, for Hispanic immigrants unemployment was 6.9 percent in 2008, up from 4.9 percent the prior year.

 

In 2008, the number of foreign-born persons employed in the U.S. fell by 307,000, or by 1.3 percent. This was the first such decline since BLS employment surveys started collecting information on nativity in 1996.

 

In 2008, native-born employment fell by 0.3 percent in 2008, or less than one-quarter the decline in immigrant employment. This is a sharp break from the recent past, when the growth rate of jobs held by immigrants was many times greater than growth in jobs held by native-born workers. (Table 2.)

 

Equally remarkable is the fact that Hispanic immigrants accounted for all of last year's decline: their employment fell by 338,000, or 3.0 percent. In contrast, employment of non-Hispanic immigrants rose by 31,000, or 0.3 percent. Perhaps this is because Hispanics are disproportionately lower skilled, and more vulnerable.

Immigrants accounted for 15.6 percent of total employment in 2008, down slightly from 15.7 percent in 2007. Lest we forget: as recently as 2000 only 12.5 percent of U.S. workers were foreign born.

But incredibly, despite hard economic times in the U.S., the just-released Bureau of Labor Statistics data show that the influx of job seekers from abroad continues.

 

The foreign-born population of working age (16-years and older) grew by 300,000 in 2008, to a record 35.3 million. That's below the million-plus inflows recorded in the previous two years. But still, in percentage terms the immigrant population of working age grew slightly faster than its U.S.-born counterpart—0.9 percent versus 0.8 percent, respectively, in 2008. [See Table 2.]

 

 

Table 2 US-born v. Foreign-born Working  Age Population, 2000-2008
	Total (1,000s)		Change from prior year		% change from prior year
Year	US-born	Foreign-born	US-born	Foreign-born	US-born	Foreign-born
2000	183,173	26,527	524	1,423	0.3%	5.7%
2001	184,410	27,455	1,237	928	0.7%	3.5%
2002	187,474	30,096	3,064	2,641	1.7%	9.6%
2003	189,837	31,331	2,363	1,235	1.3%	4.1%
2004	191,594	31,763	1,757	432	0.9%	1.4%
2005	193,525	32,558	1,931	795	1.0%	2.5%
2006	195,082	33,733	1,557	1,175	0.8%	3.6%
2007	196,850	35,017	1,768	1,284	0.9%	3.8%
2008	198,471	35,317	1,621	300	0.8%	0.9%
Change, 2000-2008	15,298	8,790
% change, 2000-2008	8.4%	33.1%
Source: BLS, "Foreign-born Workers: Labor Force Characteristics in 2008," News Release, March 26, 2009. (Similar reports for earlier years.)[PDF]

 

Of particular interest: in 2008, non-Hispanic immigrants accounted for all the working age population growth. The Hispanic immigrant population was virtually unchanged. This is again consistent with reports stating that while the illegal alien invasion has slowed, those already here do not appear to be returning home en masse. [Illegal Immigrants Stay In U.S. Despite Recession, By Cam Simpson, WSJ, January 14, 2009]

The long-term prognosis for the U.S. labor force is not materially affected by the recent reversals in immigrant employment. Should immigrant and native job growth continue at the pace of 2000-2008, the immigrant share of U.S. employment will approach an incredible 50 percent by mid-century. Remember, this does include their native-born children. Pre-1965 stock Americans will be really squeezed:

U.S. Employment by Nativity, 2000-2050 (number in thousands)
	Total	US Born	Foreign Born	% Foreign-born
2000	135,208	118,254	16,954	12.5%
2008	145,363	122,703	22,660	15.6%
Projections based on 2000-08 employment growth:
2010	148,019	123,841	24,364	16.5%
2025	169,546	132,721	41,974	24.8%
2050	212,605	148,957	103,919	48.9%

Immigrants remain a large and rapidly growing share of workers lacking basic educational skills. In 2008 48 percent of all adult workers with less than a High School diploma were foreign born. From 2000 to 2008 the number of immigrant high school dropouts rose by 29 percent. And this probably underestimates the true dropout rate for immigrants, because many are counted as high school graduates if they completed school in their country of origin—regardless of the local standards.

In contrast, the number of native born dropouts shrank by 19.7 percent. Basically, government policy is undoing efforts to educate the American population,

Yet the unemployment rate for foreign born dropouts in 2008 was 7.7 percent—considerably below the 10.1 percent rate for U.S.-born dropouts.

Talk about displacement! Of course, high school dropouts are not typically Wall Street Journal readers. So they don't count.

In fact, the immigrant workforce is increasingly bi-modal, i.e., overrepresented at the top, as well as the bottom, of the educational spectrum. From 2000 to 2008 the number of immigrants with a bachelor's degree or better grew by 50.1 percent versus 20 percent growth in U.S.-born degree holders over the same period.

It's trendy, and apparently politically acceptable, to blame outsourcing for the nagging unemployment problem among college-educated Americans. A frequently cited study by economic consultants Forrester Research [November 11, 2002] says 3.3 million white-collar jobs will be lost to foreign outsourcing in the next 12 years. That's an average of 275,000 jobs lost per year.

But in 2008 alone 222,000 foreign-born college graduates (FBCGs) entered the labor force. Since 2000 we've absorbed 2.4 million FBCGs. The influx must inevitably displace Americans in the short run, whatever its long-term benefits. And it shows no sign of reversing despite the recession.

Unemployment isn't the entire story. There is also underemployment—as reflected in falling real wages of displaced native-born workers. Displaced natives may find work in other fields, but usually at far lower pay levels. The negative effect occurs regardless of whether the immigrant workers are legal or illegal, temporary or permanent, educated or uneducated.

Harvard economist George Borjas finds that immigration reduces the average wages of native born high school dropouts by 7.4 percent. Native born college graduates suffered a 3.6 percent loss in wage due to competition from immigrants with similar levels of education. [Increasing the Supply of Labor Through Immigration Measuring the Impact on Native-born Workers May 2004]

Borjas' estimates are based on immigration through the year 2000. Today (2008) the foreign-born share of dropouts is 32 percent higher, and the college-educated share is larger by 21 percent.

America's immigration disaster is really coming home to roost in the recession. But you will only read about it here on VDARE.COM.

Peter Brimelow (email him) is editor of VDARE.COM and author of the much-denounced Alien Nation: Common Sense About America's Immigration Disaster, (Random House - 1995) and The Worm in the Apple (HarperCollins - 2003)