May 17, 2007

National Data, By Edwin S. Rubenstein

Immigrants Already Displacing Americans At Record Rate—Even Before Senate Sellout

The Bush White House and the Senate leadership returned to their the vomit today, essentially reviving last year's Bush-Kennedy Immigration Acceleration Act,

As it happens, even without any help from the Senate, just released tables from the Bureau of Labor Statistics show that the  number of foreign born persons working in the U.S. increased nearly 6 percent in 2006.

Not since 2002, when post 9/11 security measures prompted many temporary and seasonal workers to stay in the country rather than risk apprehension at the border, has the immigrant workforce grown so rapidly. (Table 1.)

From 2000 to 2006 the foreign-born workforce grew by 5.3 million, or 31 percent. Over the same period the number of U.S.-born workers rose by 3.9 million, or 3.3 percent. About 57 of every 100 jobs created during these six years went to an immigrant.

In 2006 immigrants accounted for 15.4 percent of total employment, up from 14.8 percent the prior year. As recently as 2000 only 12.5 percent of U.S. workers was foreign born.

Should immigrant and native job growth continue at the pace of 2000-2006, the immigrant share of U.S. employment will exceed 50 percent by mid-century, as seen in the table:

Immigrants represent a large and rapidly growing share of workers lacking basic educational skills. In 2006 some 47 percent of all adult workers with less than a High School diploma were foreign born. From 2000 to 2006 the number of immigrant high school dropouts rose by 35 percent, while the number of native born dropouts shrank by 12 percent. (Table 2.)

This probably underestimates the true dropout rate for immigrants. Many are counted as high school graduates if they completed school in their country of origin—regardless of the local standards.

Yet the unemployment rate for foreign born dropouts in 2006 was 5.1 percent, considerably below the 8.2 percent rate for U.S.-born dropouts.

Talk about displacement!

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 2006 the number of immigrants with a bachelor’s degree or better grew by 40 percent versus 14 percent growth in U.S.-born degree holders over the same period.

The unemployment rate of college-educated foreign born—2.3 percent in 2006 - was unchanged from 2000. By contrast, U.S.-born college grads were more likely to be unemployed in 2006 (2.0 percent) than at the start of the decade (1.6 percent.)

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 2006 alone 399,000 foreign-born college graduates (FBCGs) entered the labor force. Since 2000 we’ve absorbed 1.8 million FBCGs.  (See Table 2.) The influx must inevitably displace Americans in the short run, whatever its long-term benefits. And it’s accelerating.

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 the foreign-born share of dropouts is 28 percent higher, and the college-educated share is larger by 19 percent.

The immigrant share of the workforce—and the resulting wage losses—will rise without limit, at least if the Bush administration has its way.