Edwin S. Rubenstein Archive

Email a Friend... Printer Friendly Version...

February 08, 2010

National Data, By Edwin S. Rubenstein

Jobs Jump In January—But American Worker Displacement Soars

U.S. payrolls shrank by 20,000 jobs in January, deepening concern that relief from the deepest employment fall since the Great Depression would be slow to come.

But even as the economy floundered in its struggle to start creating jobs again, the unemployment rate fell, to 9.7 percent from 10 percent in December.

This apparent anomaly reflects two differing employment surveys. The survey of households, used to calculate the unemployment rate, reported a massive 541,000 rise in employment, and a 430,000 fall in unemployment. The labor force rose by 111,000.

That’s good news. Household employment usually leads payroll employment in signaling turns in the economic cycle. We can expect at least a temporary resumption of robust payroll growth in coming months.

But the job figures also show a resumption of American worker displacement: In January Hispanics gained jobs at nearly four times the rate of Non-Hispanics:

• Total employment:                      +541,000 (+0.39 percent)

• Hispanic employment:                  +217,000 (+1.11 percent)

• Non-Hispanic employment:           +324,000 (+0.27 percent)

People on the patriotic side of the immigration debate saw it coming. They warned that the Obama stimulus would benefit occupations disproportionately manned by immigrants. January’s pattern–with the 16 percent of the labor force that are Hispanics garnering 40 percent of the new jobs—seems to justify their “paranoia.”

The VDARE.COM American Worker Displacement Index (VDAWDI) rose by 0.85 percent January, to a record 125.6:

The blue line tracks Hispanic job growth since January 2001; the pink tracks non-Hispanic job growth over that period, while the yellow, or VDAWDI, line tracks the ratio of Hispanic to non-Hispanic job growth since that date. All lines start at 100.0 in January 2001.

VDAWDI is calculated like this:

• For every 100.0 Hispanics employed in January 2001 there are now 122.4

• For every 100.0 non-Hispanics employed in January 2001 there are now 97.5

• VDAWDI equals 125.6 (=100 X 122.3/97.5)

Hispanic employment is still the best proxy we have for the month to month impact of immigration on employment.

However, January’s employment report finally broke some new ground in immigration data transparency. A new table shows employment and unemployment data for immigrants and natives explicitly.

Unfortunately, the data are not seasonally adjusted, making month to month comparisons impossible. However, the displacement of native-born Americans by immigrants is clear in the year over year figures:

Several things stand out.

• First, in 2009 native employment fell at more than twice the rate of foreign-born employment: -2.8 percent versus -1.3 percent.

This is consistent with what we find in VDAWDI.

• Second, immigrant unemployment rose faster than native unemployment. This occurred mainly because natives left the labor force in far greater numbers: More than two and one half million natives dropped out of the labor force in the 12 months ending January 2010, versus only 49,000 immigrants.

Labor force dropouts are not counted as “unemployed” although most are too discouraged to even look for work. Had they remained engaged in their job search, the native unemployment rate would have grown faster than the foreign-born rate.

• Third, there is the continued growth in foreign-born population.

Incredibly, despite the recession, it rose 1.2 percent in the past year, or 50 percent faster than the native population.

Coming at a time when many illegals are reportedly returning to Mexico, this highlights the continued role of legal immigration in driving population growth—and American worker displacement.

Only an immigration moratorium can protect the American worker.

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