National Data| May Jobs — Immigrants Retreat From Labor Force. Looming Recession? Or A Trump Effect?

06/05/2016

Companies added 38,000 jobs in May, the smallest gain since the Fall of 2010, and a fraction of the 155,000 gain the labor market “experts” had expected. Net job creation would have been double the reported number if not for a major Verizon strike that kept 35,000 workers off the job. But even if there were no effects from the strike, the May jobs report was still the weakest in at least two-and-a-half years.

The Mainstream Media consensus: This is ugly — probably bad enough to put the Fed on hold, yet again. Unspoken in this election year: the May payroll disappointment increases the odds of recession.

For VDARE.com, however, the most significant job news last month was in the “other” employment survey, of households rather than businesses. May was the second month in a row in which native-born Americans gained jobs while immigrants (both legal and illegal — the government does not distinguish) lost them.

In May:

Total Household Survey employment rose by 26,000, up by 0.2%
Native-born American employment rose by 294,000, up by 0.23%
Immigrant employment fell by 268,000, down by 1.05%

In April and May, immigrants lost a combined total of 660,000 positions, while native-born Americans gained 370,000.

Never in the Obama years have two consecutive months seen a larger rollback in American worker displacement as during the last two months.

Don’t pop the cork yet: The long term trend of Native-born American workers losing ground to their immigrant competitors is still intact. We highlight this in our New VDARE.com American Worker Displacement Index (NVDAWDI) graphic:

OBAMA’s LEGACY: IMMIGRANT VS.

AMERICAN EMPLOYMENT GROWTH

January 2009 through May 2016

(Monthly employment index: Jan. 2009=100)

*VDARE.COM AMERICAN WORKER DISPLACEMENT INDEX

Source: BLS Household Employment Survey; VDARE.com

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

From January 2009 through May 2016:

Immigrant employment rose by 3.533 million, or by 16.3%. The immigrant employment index rose from 100.0 to 116.3.
Native-born American employment rose by 5.276 million or by 4.4%. The native-born American employment index rose from 100.0 to 104.4
NVDAWDI (the ratio of immigrant to native-born employment growth indexes) rose from 100.0 to 111.4. (100X (116.3/104.4))

During the Obama years immigrant employment has risen 3.7-times faster than American employment — 16.3% versus 4.4%. In many unskilled occupations the job growth gap is far larger, owing to the disproportionate number of foreign-born workers.

The foreign-born share of total U.S. employment has risen steadily, albeit erratically, throughout the Obama years:

IMMIGRANT SHARE OF U.S. EMPLOYMENT

January 2009 through May 2016

Source: BLS Household Employment Survey; VDARE.com

In February 2009, President Obama’s first full month in office, 14.972% of all persons working in the U.S. were foreign-born. In May 2016 the foreign-born share was 16.672%. That level is down from the Obama-era record (17.077%, reached just in March of this year), but it still ranks as 20^th highest of the 89 months of Mr. Obama’s Administration.

The data BLS publishes on native-born and immigrant employment are not seasonally adjusted. For this reason, comparisons with May of prior years may be more indicative of the real trend in foreign-born employment. If that is the case, then May 2016 marked a new Obama-era record for the number of immigrants employed in the month:

Foreign-born Employees: Number and % of total, May 2009-2016
May:	Number (mils.)	% of total employment
2009	21.50	15.31%
2010	22.11	15.86%
2011	22.18	15.87%
2012	22.97	16.41%
2013	23.30	16.19%
2014	23.88	16.38%
2015	25.01	16.81%
2016	25.18	16.67%
Source: Author’s analysis of unseasonalized BLS data.

May has always been a stellar month for immigrant job seekers throughout the Obama years, evidenced by the continuous rise in foreign-born employment in every May since 2009. In May 2016 25.18 million immigrants held jobs — up by 170,000 — or 0.7% — from May 2015. At the same time, the immigrant share of total employment was lower this May, reflecting the fact that native-born job growth outpaced foreign-born job growth over the past 12 months.

May’s immigrant employment share was 1.36 percentage points above the level recorded in May 2009, the first May of the Obama years. With total employment now at 151 million, this implies that Obama-era immigration may have pushed as many as 2.09 million native-born Americans onto the unemployment rolls since the May seven years ago.

Employment Status by Nativity, May 2015-May 2016 (numbers in 1000s; not seasonally adjusted)
	May-15	May-16	Change	% Change
	Foreign born, 16 years and older
Civilian population	40,380	40,693	313	0.8%
Civilian labor force	26,331	26,243	-88	-0.3%
Participation rate (%)	65.2%	64.5%	-0.7%	-1.1%
Employed	25,098	25,274	176	0.7%
Employment/population %	62.2%	62.1%	-0.1%	-0.2%
Unemployed	1,233	969	-264	-21.4%
Unemployment rate (%)	4.7%	3.7%	-1.0%	-21.3%
Not in labor force	14,049	14,450	401	2.9%
	Native born, 16 years and older
Civilian population	210,075	212,482	2,407	1.1%
Civilian labor force	131,388	132,557	1,169	0.9%
Participation rate (%)	62.5%	62.4%	-0.1%	-0.2%
Employed	124,251	126,319	2,068	1.7%
Employment/population %	59.1%	59.4%	0.3%	0.5%
Unemployed	7,137	6,238	-899	-12.6%
Unemployment rate (%)	5.4%	4.7%	-0.7%	-13.0%
Not in labor force	78,687	79,925	1,238	1.6%
Source: BLS, The Employment Situation — May 2016, Table A-7, June 3, 2016. PDF

From May 2015 to May 2016:

Foreign-born employment rose by 176,000, up by 0.7%, while native-born American employment rose by 2,068,000 — up by 1.7%. Native-born employment grew more than twice as fast as immigrant employment — a rare event.
The number of unemployed immigrants fell by 21.4%, while the number native-born unemployed fell by 12.6%.This bodes poorly for immigrants, as it reflects a decline in their labor force more than a pickup in their employment
Unemployment rates dropped 21.3% for immigrants and 13.0% for native-born. This also bodes poorly for immigrants, as it reflects a decline in their labor force more than a pickup in their employment
Labor-force participation (LFP) rates, a sign of worker confidence, fell by 1.1% for immigrants and by 0.2% for native-born Americans. Although immigrant LFP remains above that of native-born, the gap narrowed dramatically, another bearish sign (for immigrants.)

Two mega changes are evident in this table.First, the immigrant/native-born gap in population growth seems to have turned in favor of native-born. Over the past 12 months (May 2015 to May 2016) the immigrant working age population grew by 313,000 — far below the 1 million average of recent years. Over the period the native-born working-age population increased by 1.1% while the comparable population of immigrants grew by 0.8%, or 27% less. In contrast, the prior 12 months (April 2015 to April 2016) saw a 2-to-1 population growth rate “advantage” for immigrants.Second, the reversal in labor force growth rates between the two groups. Over the last 12 months the foreign born labor force shrank by 88,000 — a 0.3% drop — while the native-labor force rose by 1.2 million, an increase of 0.9%.Two explanations are possible.

We may be on the cusp of a recession — a downturn that has already discouraged legal immigrants from looking for jobs and sent many illegal immigrants packing.
Alternatively, as we posited in last month’s analysis of the jobs data, this could be a “Trump effect” — a rational decision by illegal aliens to leave now rather than risk deportation next year.

Stay tuned.

Edwin S. Rubenstein is President of ESR Research Economic Consultants.

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