National Data | Pew Confirms VDARE.COM On American Worker Displacement

By Edwin S. Rubenstein

11/07/2010

Here at VDARE.COM, we've been estimating immigrant displacement of American workers every month for almost exactly six years. Our methods have been confirmed by other federal data and when we last looked, displacement was at a record high.

Displacement is a simple concept, but there has been essentially no discussion of it in Establishment debate. (Just as there has been no discussion of an anti-unemployment immigration moratorium).

Until now. Just before the election, the Pew Hispanic Center released After the Great Recession: Foreign Born Gain Jobs; Native Born Lose Jobs. [PDF]

To its great credit, Pew also confirms our findings: After retreating across the border in the depths of the Great Recession, immigrants appear to heading north again. Recently arrived Hispanic illegal immigrants added 782,000 to the working age population during the first year of the so-called recovery (the second quarter of 2009 to the second quarter of 2010.) That compares to a 221,000 gain the prior year.

With legal immigration chugging along at the same (high) rate in both periods, the increase can only reflect the re-entry of illegal aliens to the U.S.

A year into a jobless recovery the number of employed immigrants is rising while fewer native-born are working:

Foreign workers (Hispanic and non-Hispanic) gained 656,000 jobs during the recovery’s first year — a 3.1% gain. Hispanic immigrants enjoyed a 4.2% job gain during that time. This marks a sharp rebound from the prior year, when nearly 6% fewer Hispanic immigrants were employed.

For native-born workers, on the other hand, joblessness has become an increasingly chronic condition. Workers born in this country lost 4.6 million jobs in 2008-09 recession, and another 1.2 million during the 2009-10 recovery.

As a result, natives and immigrants have switched places so far as unemployment rates are concerned. The rate for natives in 2010-Q2 — 9.7% — is a full point above that of immigrants. A year earlier, native-born unemployment was 0.1 percentage below the rate for foreign-born.

But all is not well in the immigrant workforce. From 2009 to 2010 the weekly earnings of foreign-born Hispanics fell 5.8% compared with a loss of loss 4.5% for all foreign-born workers and less than a 1% decline for natives.

Pew researchers struggle mightily to explain why this happened:

"Latino immigrants experienced the largest drop in wages of all. It might be that in the search for jobs in the recovery, immigrants were more accepting of lower wages and reduced hours because many, especially unauthorized immigrants, are not eligible for unemployment benefits."

Get it? The fact that new Hispanic immigrants flooded the workforce at a time when employers weren’t hiring had nothing to do with it.

Forget about supply and demand — think unemployment insurance!

If you accept Pew’s logic we should make unemployment insurance a universal entitlement — available to legal and illegals alike. That way illegal aliens would not be "more accepting" of lower wages, and the supply of redundant unskilled workers could rise ad infinitum with no adverse impact on wages.

Another howler in the Pew report:

"The weekly earnings of workers during the recession and the initial stage of the recovery were generally stagnant. However, foreign-born workers experienced a sharp decline in earnings during the recovery even as they managed to boost their employment…"

Turn the second sentence around, and its like automakers saying they "managed" to sell more cars even as they cut prices, or bakers "managing" to sell more loaves of bread even as they cut bread prices.

New immigrants "managed" to increase their penetration of the U.S. labor market in the recovery because they were willing to work for less than the native-born (and earlier immigrant cohorts) with similar skills and education.

In fact, the recovery marks a return to the long-term demographics that have plagued the U.S. for decades.

Some 15.7% of the labor force today is foreign born, up from 9.7% in 1995. Every 10% rise in the immigrant share reduces wages by an average of 3 to 4 percent, according to economist George Borjas. For unskilled workers the decline is greater.

But it’s all cool with Pew.

Still, give credit where it’s due: the Pew report did produce a flood of MSM headlines:

• Report says foreign-born workers gained jobs after recession, By Shankar Vedantam, Washington Post, November 7, 2010
• Immigrants in US gain jobs, native-born lose: study, (AFP) — October 29, 2010
• Immigrants Benefit as Economy Recovers, By Miriam Jordan, WSJ, October 30, 2010

Six years late, of course — but hey, who’s counting?

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

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