National Data | November Jobs: Immigrants Gain Jobs 7-Times Faster Than Americans Over Last 12 Months

By Edwin S. Rubenstein

12/07/2013

The U.S. economy generated 203,000 jobs in November while the unemployment rate fell to 7.0%, its lowest rate in five years. In a familiar paradox, this apparent good news may be bad news for investors — because it increases the likelihood that the Federal Reserve will increase interest rates sooner rather than later.

In fact, the November numbers are not all that great. The job gain was slightly below October’s 204,000, and not much better than the 198,000 per month average registered in the first nine months of 2013. And note that the unemployment rate decline was driven mainly by the return of hundreds of thousands of federal employees following October’s government shutdown.

The labor force participation rate (LFP) went up last month. And that is good news, a signal that people who had been too discouraged to even look for jobs are back in the hunt.

However, as seen below, LFPs for native-born American workers are considerably below those of immigrants, and have declined significantly more over the past year. So worker confidence may indeed be up — but it is skewed toward those born elsewhere.

With immigrants less likely to work for the Federal government than natives, the end of the shutdown could explain why native-born workers gained jobs at a faster pace than immigrants last month:

In November:

• Total employment rose by 818,000, or by 0.57%
• Native-born employment rose by 700,000, or by 0.58%
• Foreign-born employment rose by 118,000, or by 0.50%

Over the past two months, job growth has traced a neat “V” shape, as federal workers left in October and returned in November. This is clearly seen in right tail of the New V-Dare American Worker Displacement Index (VDAWDI) graphic:

Native-born American employment growth is the blue line, immigrant employment growth is in pink, and NVAWDI — the ratio of immigrant to native-born American 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.

As far as the long-term trend is concerned, November 2013 continues the Obama-era trend of native-born American job losses and immigrant gains.

From January 2009 to November 2013:

• Foreign-born employment rose by 2.250 million, or by 10.39%. The immigrant employment index rose from 100.0 to 110.4.
• Native-born American employment fell by 85,000 or by 0.07%. The native-born employment index in September 2013 was 99.9, below the level of January 2009.
• NVDAWDI (the ratio of immigrant to native-born employment growth indexes) rose from 100.0 to 110.5 (100X(110.4/99.9)

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

Over the past 12 months:

• Immigrants gained 689,000 jobs, a 3.0% increase; native-born workers gained 537,000 positions, a 0.4% increase — less than one-seventh the immigrant job gain. ADVANTAGE IMMIGRANTS
• The unemployment rate for immigrants fell by 1.4 percentage point — or by 18.s%; the native 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 270,000, or by 2.1%; the number native-born not in the labor force rose by 2.030 million, or by 2.7%. ADVANTAGE IMMIGRANTS
• The foreign-born population of working age rose by 1.7%; the comparable native-born population rose 0.9% ADVANTAGE IMMIGRANTS

Five years after the Great Recession, Americans are finally getting back to work. But there is no joy. More evidence of this: Paychecks have barely budged. Since the recovery began, the average hourly worker saw his earnings rise by 4 cents — to $24.15 an hour.

Wages for those at the very bottom of the income ladder have been falling, in real terms, for the past 45 years i.e. about the time that the 1965 Immigration Act opened the floodgates.

When will Washington connect the dots?

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

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