What Government Shutdown?

Sure, the latest employment report was delayed a week because of the Shutdown, but the October job numbers show robust private sector job growth and only a trivial (8,000) reduction in Government jobs.  

While employers added 204,000 jobs in October, the unemployment rate rose to 7.3% from the 7.2% recorded in September. (The job number comes from a survey of employers; unemployment rates are based on a survey of households).

There’s a lot of what statisticians call “noise” in Government data. Disparate month-to-month trends in job growth and unemployment rates are not uncommon.

In October, the discrepancy was particularly egregious. Labor Department statisticians counted furloughed Government workers as unemployed for the household survey but as working for the employer survey.

With this caveat in mind, our analysis of the October household survey shows that foreign-born workers endured a somewhat harder October than their native-born American counterparts:

In October:

• Total  employment fell by 735,000, or by 0.51%
• Native-born American employment fell by 530,000, or by 0.44%
• Foreign-born employment fell by 205,000, or by 0.85%

October was preceded by two months during which immigrants gained jobs and native-born American workers lost them. Statistical noise from the Government Shutdown could well be a factor in the turn.

The month-to-month picture may be muddy.  But year-over-year, October 2013 merely continues the long-run trend of the displacement of native-born American workers by foreign-born competitors seen in earlier Obama-era Octobers:

From October 2009 to October 2013 the share of total jobs held by immigrants rose steadily, from 15.71% to 16.56%. Had the immigrant share remained at its 2009 level, as many as 1.2 million more native-born Americans would have been employed this October.

We chart the displacement of native-born American workers by immigrants in our New VDARE.com American Worker Displacement Index (NVDAWDI). It tracks month to month changes in native-born and foreign-born employment since the start of the Obama Administration:

Native-born American employment growth is the blue line, immigrant employment growth is in pink, and NVAWDI—the ratio of immigrant to native-born job growth—is in yellow. The graphic starts at 100.0 for both native-born and immigrant employment in January 2009, and tracks their growth since then.

From January 2009 to October 2013:

• Foreign-born employment increased by 2.132 million, or by 9.85%. The immigrant employment index rose from 100.0 to 109.8.
• Native-born American employment declined by 785,000 or by 0.65%. The native-born American employment index in September 2013 was 99.3—well below the level of January 2009.
• NVDAWDI (the ratio of immigrant to native-born American employment growth indexes) rose from 100.0 to 110.6 (100X(109.8/99.3)

A more detailed picture of American worker displacement, October 2012 to October 2013, is seen in seasonally unadjusted data published in the BLS monthly job report:

Over the past 12 months:

• Immigrants gained 486,000 jobs, a 2.1% increase; native-born America workers lost 381,000 positions, a 0.3% decline ADVANTAGE IMMIGRANTS
• The unemployment rate for immigrants fell by 1.0 percentage point—or by 13.1%; the native-born American unemployment rate fell by 0.5 percentage points—a 6.6% decline. ADVANTAGE IMMIGRANTS
• The labor force participation rate—a measure of worker confidence—declined for both native-born Americans and immigrants. In percentage terms, however, the native-born American participation rate fell more than three-times as much as the immigrant rate. ADVANTAGE IMMIGRANTS
• The number of immigrants “not in the labor force”—i.e., neither working nor looking for work, rose by 288,000, or by 2.2%; the number native-born Americans not in the labor force rose by 2.971 million, or by 4.0%. ADVANTAGE IMMIGRANTS

Overarching everything is the mega trend: the foreign-born working age population continues to grow faster than the comparable native-born American population. This imbalance has been bringing increasing pressure on American workers for decades. It will continue as long as Washington continues to ignore the consequences of current immigration policy—and, if anything like the Schumer-Rubio Amnesty/ Immigration Surge bill is passed, it will intensify.

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