12/08/2006
The Great American Job Machine rolled on in November, easing worries that the economy was heading south. Nonfarm payrolls increased by 132,000, or by 22,000 above the estimate of Wall Street economists. [BLS Statistic]
But the "other" employment survey, based on a survey of households rather than businesses, revealed even more robust growth: 277,000 new positions in November. The Household Survey reports ethnicity.
Here are November’s employment gains by major racial group:
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Hispanics: | +86,000 (+0.43 percent) |
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non-Hispanics: | +191,000 (+0.15 percent) |
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Whites: | +115,000 (+0.10 percent) |
Since about half of Hispanics are foreign-born, we use Hispanic employment as a proxy for immigrant employment — data which the government does not make available in its monthly employment report.
The Hispanic gains occurred despite job declines in both construction and manufacturing — sectors in which Hispanics are traditionally overrepresented.
Monthly changes in Hispanic and non-Hispanic employment since the start of the Bush Administration, expressed as an index number, are tracked in the following graphic:
Since January 2001 Hispanic employment has risen by 3,816,000 positions — a gain of 23.7 percent — while 3,972,000 new jobs were filled by non-Hispanics — a gain of 3.3 percent. In other words, Hispanics grabbed almost half the new jobs, although they're only about a tenth of the workforce. The ratio of Hispanic to non-Hispanic job growth rates, which we call VDAWDI (the V-Dare.com American Worker Displacement Index) rose to a record 119.8 in November, up from 119.4 the prior month.
We have long argued that the widely cited Payroll employment stats were flawed — that the actual rate of job creation is much closer to that shown in the Household Survey, which also captures the presence of illegal alien workers whom the employers filling out the Payroll Survey won’t fess up to.
The Surveys tell quite different stories. In November the Payroll Survey estimated that total U.S. employment to be 136.0 million. The Household Survey counted 145.6 million — i.e., 9.6 million more workers.
In November 2006 Payroll employment was 3.8 million higher than it was at the start of the Bush Administration. But the Household Survey showed that employment rose by 7.8 million over that period — or by more than twice Payroll job growth.
Why the gap? The Household Survey includes not only workers in traditional wage and salary jobs, but workers outside the scope of the payroll survey, including agricultural workers, the self-employed, and, of course — and most significantly — illegal aliens who are paid "off the books" in the underground economy.
Historically the Payroll and Household Surveys tracked each other fairly well. During the past five years, however, they've diverged by increasingly large amounts.
It’s no coincidence that the gap between the two surveys (9.6 million) resembles what many believe to be the size of the illegal alien workforce.
Edwin S. Rubenstein is President of ESR Research Economic Consultants in Indianapolis.
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