December 08, 2008

National Data, By Edwin S. Rubenstein

Illegals Start Self-Deporting, But American Worker Displacement Still Massive In Bush Era

Since the start of the Bush Administration (January 2001) through November 2008 Hispanic employment has increased 4.1 million, or 25.3 percent, while non-Hispanic employment is up a mere 2.4 million, or 2.0 percent.

Startling, eh? Think through what that means. Hispanics make up only 14% of the workforce. Yet they got almost two-thirds of American job growth.

No wonder they turned so enthusiastically to the GOP!

Oh, wait a minute—they didn’t.

Nevertheless, the Hispanic job share is very interesting to us here at VDARE.COM. It enables us to estimate the displacement of American workers by immigrants.

In the best of worlds, we would be able to track immigrant employment directly. But for a variety of reasons—some cost related, some undoubtedly political—the Bureau of Labor Statistics does not publish monthly figures on immigrant employment.

So we are forced to make do with a proxy: Hispanic employment. Because so many Hispanics are immigrants (about 40% are foreign-born) or the children of immigrants, it is the best estimate we have for the month-to-month fluctuations in foreign-born employment.

At VDARE.COM, we have tracked the monthly trend of Hispanic and non-Hispanic employment growth for a number of years. We calculate the ratio of Hispanic to non-Hispanic employment growth since Bush’s inauguration in January 2001. We call this VDARE.COM's American Worker Displacement Index (VDAWDI). It’s the best indicator we have of how immigrants fare relative to native-born workers over time.

August 2007 was the peak month for the displacement of native workers by immigrants. In August 2007 the Hispanic employment index was 127.7, meaning that Hispanic employment had increased by 27.7 percent since January 2001, the base date for the index. The non-Hispanic employment index that month was 102.9, indicating 2.9 percent rise in non-Hispanic employment over that period.

Thus VDAWDI in August 2007 was 124.1 (100 X 127.7/102.9), a big spike from the prior month’s 122.1. Since then the displacement index has drifted downward:

This drift continued in November, according to figures released last week. Overall, payroll employment fell a stunning 533,000, [BLS Report] the worst monthly loss since December 1974. The “other” employment survey–of households rather than businesses—registered an even more catastrophic loss: 673,000. [Household Survey]

In November, the pain was spread fairly evenly among the Hispanic and non-Hispanic labor force, with both suffering the same percentage drop:

Non-Hispanic employment: -572,000 (-0.5 percent)
Hispanic employment: -101,000 (-0.5 percent)

But since January non-Hispanic employment has shrunk by 1.45 percent, or more than twice the 0.65 percent decline in Hispanic employment.

November’s non-Hispanic job loss—a frightening 572,000—was the largest monthly loss since August 2007, when 604,000 non-Hispanics received pink slips. The big difference: Competition from low-wage Hispanics was very much in evidence back then. Hispanic employment rose by nearly 250,000 in August 2007.

Today’s malaise is spread far more evenly.

Another glaring difference between the two groups may be more revealing, however. The unemployment rate for Hispanics actually fell in November—to 8.6 percent from 8.8 percent the prior month. Unemployment rates for whites and blacks both increased in November.

The lower Hispanic unemployment rate reflects the fact that Hispanics—unlike whites and blacks—are exiting the U.S. labor force at even greater rates than they are losing jobs.

These labor force leavers are not counted as unemployed. Some are simply too discouraged to look for work. Others, especially in the illegal alien workforce, have left the country entirely.

The magnitude of the exodus is not clear, certainly not on a monthly basis. Census Bureau data through May 2008 show a sharp decline in the number of less-educated, young Hispanic immigrants in the country—a good proxy for illegal aliens. One estimate shows a 1.3 million, or 11 percent, decline in the in the illegal alien population from its peak in August 2007 through May of this year. [Homeward Bound: Recent Immigration Enforcement and the Decline in the Illegal Alien Population, By Steven A. Camarota and Karen Jensenius, CIS Backgrounder, July 2008 (PDF)]

Bottom line: The worst job market since the Great Depression hasn’t expunged the long-term trend in American worker displacement that occurred under George W. Bush. Not yet, anyway.

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