National Data | September Jobs: Not A Conspiracy, But Continued American Worker Displacement

By Edwin S. Rubenstein

10/06/2012

The U.S. added a scant 114,000 new jobs in September — and remember the Main Stream Media never mentions that Washington is giving foreigners around 100,000 work permits a month — but the unemployment rate fell below 8% for the first time since Barack Obama took office. The disparity prompted a now-notorious tweet from former General Electric boss Jack Welch:

Unbelievable jobs numbers…these Chicago guys will do anything…

Can’t debate so change numbers.

Without putting anything past the Obama team, I believe this was a naïve reaction. Employment growth certainly was startling — I can’t remember anything comparable in my 25 years in economic journalism — but the sample sizes involved are very small and noise happens. Next month may see the reverse.

The real story is the long-run trend: the relentless displacement of native-born Americans by immigrants. Neither the Democrats, the MSM (but I repeat myself) or Conservatism Inc. want to talk about that.

Note that the employment figures come from the Payroll Survey of businesses. The unemployment rate is calculated from the (much smaller) Household Survey.

Household employment surged by a whopping 873,000 in September — more than seven times the growth recorded by the Payroll Survey.

Even curiouser, the Household Survey reports that total employment was 142.9 million in September while the business survey finds only 133.5 million were working that month. Why the gap?

Some economists have argued that self-employed and part-time workers show up in the Household Survey but not in the Payroll Survey.

At VDARE.com, we have pointed out that there is a better explanation: illegal aliens. The Pew Research Center estimates there were 11.2 million illegal aliens living in the U.S. in 2010. Eight million illegals were in the workforce that year — 5% of the total. By some estimates, illegals account for half of the overall growth in immigrant employment since 2000.

Illegal aliens do not show up in the Payroll Survey for the simple reason that employers who admit to hiring them risk stiff penalties. (Even though the Obama Administration appears to be abandoning enforcement of those laws.) So the big pop in household employment may be, at least in part, the result of illegals responding to Obama’s de-facto amnesty.

My analysis of the Household Survey reveals that both the native-born and immigrants gained ground at extraordinary rates last month:

• Total employment rose by 873,000, or by 0.61%
• Native-born employment rose by 736,000, or by 0.62%
• Foreign-born employment rose by 137,000, or by 0.60%

The Obama era trend, in which immigrants gain jobs at a faster pace than natives, remains intact. We see this clearly in the New VDARE.com American Worker Displacement Index (NVDAWDI):

Native-born employment growth is the black line, immigrant employment growth is in pink, and NVDAWDI — the ratio of immigrant to native job growth — is yellow.

From January 2009 to September 2012:

• Foreign-born employment rose 1.496 million, or by 6.9%
• Native-born employment fell by 0.743 million, or by -0.6%

Since Mr. Obama took office, native-born job losses are about half the immigrant job gains. Put differently, during the Obama era one native worker has been displaced per every two foreign-born workers added to the U.S. workforce.

To calculate NVDAWDI we set both the native and immigrant employment indexes for January 2009 at 100.0. By September 2012 the immigrant employment index had risen to 106.9 while the index of native employment declined to 99.4.

The September NVAWDI was 107.6, unchanged from the August level.

American worker displacement over the past 12 months is evident in data in the latest Household Survey:

Since last September:

• Immigrants gained 977,000 jobs, a 4.4% increase; native-born workers gained 1,855,000 positions, a 1.6% increase. ADVANTAGE IMMIGRANTS
• The unemployment rate for immigrants fell by 1.5 percentage points — a 16.5% decline; the rate for natives fell by 1.1 percentage points — a 12.6% decline. ADVANTAGE IMMIGRANTS
• The labor force participation rate — a measure of worker confidence — fell for both immigrants and natives — with immigrants suffering a larger decline. However the immigrant participation rate remains well above the native rate. ADVANTAGE IMMIGRANTS
• The immigrant labor force (working or looking for work) rose by 2.7%; the native-born labor force rose by 0.3%. ADVANTAGE IMMIGRANTS

One final clue: over the past 12 months, the foreign-born population of working age rose more three-times faster than the corresponding native-born population — 3.9% versus 1.1%. That’s consistent with the notion that Obama’s Administrative Amnesty is beginning to intensify competition faced by American workers — functioning like an inverted immigration moratorium, exactly the opposite of what public policy should be doing.

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

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