Native and Immigrant Employment Growth, 2009 to 2012
A new analysis of government data shows that two-thirds of the net increase in employment since President Obama took office has gone to immigrant workers, primarily legal immigrants. Although the level of new immigration overall has fallen, legal immigration remains very high.
While economists debate the extent to which immigrants displace natives, the new data make clear that there is no general labor shortage in the United States. This analysis calls into question the wisdom of bringing in more than a million new legal immigrants each year at a time when the employment situation remains bleak.
Among the findings of this analysis:
- Since President Obama took office, 67 percent of employment growth has gone to immigrants (legal and illegal).
- There were 1.94 million more immigrants (legal and illegal) working in the third quarter of 2012 than at the start of 2009, when the president took office. This compares to a 938,000 increase for natives over the same time period.
- Most of the immigrant growth in employment was the result of new immigration, rather than immigrants already in the country taking jobs. Some 1.6 million new immigrant workers arrived from abroad since the start of 2009 — we estimate 70 to 90 percent entered legally.
- Immigrants made employment gains across the labor market. In occupations where immigrant gains were the largest, there were 2.2 million unemployed natives.
- A large share of employment growth was going to immigrants well before President Obama took office. However, he has taken steps to increase the level of job competition from foreign-born workers:
- He offered work authorization to an estimated two million illegal immigrants who arrived in the country before age 16 — nearly 200,000 of whom have applied so far.
- When auditing employers who hire illegal workers, the administration has not detained the illegal workers as a matter of policy, allowing them to take new jobs.
- The administration called on the Supreme Court in 2010 to strike down Arizona’s law requiring employers to verify the legal status of new workers.
- Natives have done better in the labor market recently. From the third quarter of 2011 to the third quarter of 2012, two-thirds of employment growth went to native-born workers.
- Despite recent improvements, in the third quarter of 2012, there were a huge number of working-age (18 to 65) native-born Americans not employed:
- 7.6 million with less than a high school education (18 to 65);
- 18.1 million with only a high school education (18 to 65);
- 15.8 million with some college (18 to 65); and
- 9.2 million college graduates (18 to 65).
- Some people who are not working do not wish to work. However, the broad measure of unemployment, which includes those who have given up looking for a job, shows a dismal picture for adult natives (18+) in the third quarter of 2012:
- 30.8 percent for high school dropouts;
- 18.1 percent for those only a high school education;
- 13.8 percent for those with some college; and
- 8 percent for all college graduates and 13 percent for college graduates under age 30.
- While significantly more immigrants are presently working, their unemployment rate remains high and the share of working-age adults (18-65) holding a job has only slightly improved since President Obama took office.
Introduction. The presidential candidates of both major parties have focused on jobs and how best to get the country working. There is no question that the U.S. labor market has been afflicted with persistently high unemployment and low employment rates. However, almost no attention has been paid to the very large share of employment growth that has gone to foreign-born workers. The Center for Immigration Studies and other researchers have found that total new immigration is below the record levels it was a decade ago,1 but the nation’s immigration system continues to bring in a very large number of legal immigrants. For example, some 4.3 million green cards (for permanent immigrants) were given out since the recession began — fiscal years 2008 to 2011. 2 The household survey collected by the government shows 4.6 million new immigrants (legal and illegal) of all ages arrived in the United States from 2008 to 2012, not adjusted for undercount.3 While some new arrivals were too old or too young to work, did not wish to do so, or were unemployed, about 60 percent of working-age adults did find a job.
To be clear, this analysis measures the net gain in the number of immigrants and natives holding a job. Of course, many jobs are created and lost each month. Moreover, many workers change jobs each month. The net increase in employment since the president took office is 938,000 for natives and 1.94 million for immigrants.4 Figure 1 shows the net change in the number of natives and immigrants employed since the first quarter of 2009, when President Obama took office. The figure shows a significant deterioration after the president took office and then a faster recovery for immigrants. Table 1 provides a much more detailed picture of employment going back to 2000. It shows the number of immigrants and natives employed (ages 16-plus), and unemployed (ages 16-plus). It also reports labor force statistics for working-age adults 18 to 65 years of age.
By examining the number of people working, this report measures the net effect of the churn in employment. Like the outcome of day spent at a casino, it is the end result of losses and gains that matter. And that is what is reported in this study. This type of comparison shows that from the first quarter of 2009 to the third quarter of 2012, most of the net increase in the number of people working went to immigrants, referred to as the foreign-born by Census Bureau. The foreign-born are persons who are not U.S. citizens at birth. It includes naturalized citizens, green card holders, guest workers, and illegal immigrants.
What the President Inherited. To be sure, the president inherited an immigration system that allows in a million immigrants annually. This is the so-called green card that allows immigrants to live permanently in the United States and apply for citizenship after five years. As discussed above, since the Great Recession began 4.3 million new green cards were issued from 2008 to 2011.55 While data are not yet available, it seems very likely that roughly one million additional green cards were issued in fiscal year 2012, which ended in September of this year. In addition, several hundred thousand guest workers also have been allowed into the country each year. Neither President Obama nor Congress has been willing to modify this system.
During the Bush administration a large share of employment growth also went to immigrants — 44 percent. In the fourth quarter of 2008 there were 4.38 million more natives working than in the first quarter of 2001, when President George W. Bush took office. Among immigrants, the number working increased by 3.48 million. (See Table 1.) However, employment peaked by the fourth quarter of 2008 and was headed down when President Bush left office.
There is no question that President Obama inherited a labor market that was deteriorating. (See Table 1.) But he has taken a number of steps that have increased job competition for native-born workers. He has offered work authorization to an estimated two million illegal immigrants who arrived in the country before age 16 — nearly 200,000 of whom have applied so far.6 When auditing employers who hire illegal workers, as a matter of policy the administration has not detained the illegal workers, allowing them to take new jobs. The administration also called on the Supreme Court in 2010 to strike down Arizona’s law requiring employers to verify the legal status of new workers.7 Most importantly, he has proposed no reduction in legal immigration levels.
There is a long-standing debate among economists about whether immigration reduces labor market opportunities for the native-born. There is good research showing that immigration displaces natives from the labor market.8 But there is not a consensus. What we can say is that there are currently an enormous number of working-age, adult (18 to 65) native-born Americans not working — 50.8 million. If we include naturalized citizens the number is 54.7 million. Equally important, the share of working-age natives holding a job was declining even before the recession, which has nothing to do with the Obama administration. As immigration increased through the last decade, the employment rate of natives fell. Just 69 percent of adult natives (18 to 65) held a job in the third quarter of this year, compared to 74 percent at the end of 2007, before the recession. Back in the third quarter of 2000 it was 76 percent. The last decade was a period of high immigration and declining employment rates for natives.
It is clear that a large share of employment growth was going to immigrants long before the president took office. What the president has failed to do is propose any reduction in immigration levels and he has embraced policies and positions that made the situation worse. Immigration levels are a discretionary policy, which can be changed. Both the president and Congress share the blame or credit, depending on one’s point of view, for the decision to keep legal immigration at very high levels despite the dismal state of the job market.
Occupations. Looking at occupations is important because it allows us to see the sectors of the economy where immigrants made employment gains. The first column in Table 2 shows the net increase in the number of immigrants (legal and illegal) in each occupation. The second column reports the number of immigrants who arrived 2009 to 2012. The third column shows the native unemployment rate and the fourth column shows the number of unemployed natives. The fifth column shows the total number of workers (immigrant and native) in the occupation and the sixth column reports the share of workers in the occupation who are natives. Both the net increase in employment and new arrivals represent different ways of measuring the impact of immigrants on the labor market. The two figures do not match because the net figures reflect the departure of some immigrants from the country, their departure from particular occupations, and the fact that some immigrants employed in 2009 became unemployed or left the labor market altogether. A small fraction also passed away. At the same time, new immigrants arrived from abroad, while others rejoined a particular occupation, and still others aged into the labor force and got their first jobs.
The net gain in employment among immigrants was 1.94 million and the number of new arrivals was 1.58 million. The fact that the net gain is so similar to the number new arrivals indicates that most of the net increase was due to new arrivals from abroad, and was not the result of immigrants already in the country gaining or regaining employment. However, this was not the case in every occupation.
Table 2 shows that immigrants made gains across the U.S. labor market. The six occupational categories where immigrants made the largest numerical gains included lower-paying occupations such as building cleaning and maintenance, farming/fishing/forestry, personal care, and production (manufacturing). But they also include higher-paying occupations such as those in computer science, math, and management. Clearly, immigrant gains were not confined to a few lower-wage, lower-status occupations.
In the lower-wage jobs generally done by workers without a college degree, there is no evidence of a labor shortage. Table 2 shows that in building cleaning and maintenance occupations there were 479,000 natives unemployed, in personal care and service occupations there were 365,000 unemployed, and in production occupations there were 679,000 unemployed.9 (Production is primarily heavy and light manufacturing and meat, fish, and poultry processing.) Agriculture could be an exception, but since just 2 percent of all immigrants work in farming, fishing, and forestry it is a relatively unimportant part of the overall picture.
In addition to lower-paying and lower-status occupations, immigrants made significant gains in computer science, management, business and finance, and architecture and engineering. While unemployment among natives is not as high in these occupations as in lower-status occupations, there are still a significant number of native-born Americans unemployed (980,000) in these occupations. An argument could be made that if there is a shortage in these higher-skilled occupations then the jobs should go to unemployed natives. In addition, more Americans should be encouraged to enter these fields by improving math and science education and making college scholarships more available rather than relying on foreign sources of labor. Offering higher wages and better benefits is one way the labor market induces workers to retrain, relocate, or reenter the labor force when demand is strong for certain skills. Bringing in immigrants would seem to preempt that process.
The idea that immigrants only do jobs American do not want is a myth. Table 2 shows that the vast majority of workers in virtually every occupational category are U.S.-born.10 It is simply incorrect to say there are jobs no Americans do or want to do. In fact, the majority of workers in virtually every job category are native-born.
Educational Attainment. We also can see how immigrants made gains across the labor force by examining their educational level. Forty-one percent of the growth in immigrant employment was among those with at least a bachelor’s degree, 23 percent was among those with some college, 20 percent was among those with only a high school degree, and 16 percent was among those who had not completed high school. This also shows that immigrant gains were not confined to less-educated workers.
In the third quarter of 2012 there were a huge number of adult, working-age (18 to 65) native-born Americans across the educational distribution who were not employed. That is, they were unemployed or they were entirely out of the labor market. There were 7.6 million working-age natives with less than a high school education not working in the third quarter. In addition, 18.1 million working-age natives with only a high school education were not working, as were 15.8 million with some college, and 9.2 million with at least a bachelor’s degree. This represents a very large pool of potential workers from which employers could draw.
Of course, some people who are not working do not wish to work. However, the broader measure of unemployment referred to as U-6 unemployment, which includes those who have given up looking for a job, shows a dismal picture for adult natives in the third quarter of 2012.11 U-6 unemployment for those without a high school diploma in the third quarter of 2012 was 30.8 percent; it was 18.1 percent for those with only a high school diploma; 13.8 percent for those with some college; and 8 percent for natives with at least a bachelor’s degree. One of the starkest numbers is the U-6 unemployment rate for college graduates under age 30, which is 13 percent. College graduates are normally relatively insulted from a recession, but that is not the case for young college graduates during this recession. Again, all the evidence indicates that the pool of potential workers is very large.
Data and Methods
The two primary employment surveys collected by the U.S. government are referred to as the “household survey” (also called the Current Population Survey, or CPS) and the “establishment survey”. The establishment survey asks employers about the number of workers they have. In contrast, the CPS asks people at their place of residence if they are working. While the two surveys show the same general trends, the figures from the two surveys differ to some extent.
Because it asks actual workers about their employment situation, only the CPS provides information about who is working, who is looking for work, and who is neither working nor looking for work. Moreover, only the CPS asks respondents about their socio-demographic characteristics such as race, education level, age, citizenship, and year of arrival in the United States. Thus the CPS can be used not only to compare employment growth among immigrants and the native-born, it also can be used to examine the share of different groups who are employed or to make comparisons about any other measure of labor force attachment. For these reasons this analysis uses the public-use files of the CPS to examine employment in the United States by quarter.12
While the CPS is the primary source of data on the U.S. labor market, there are breaks in the continuity of the survey and this could slightly impact comparisons over time. This is due to periodic re-weighting (such as after the decennial census) by the Census Bureau to better reflect what it believes is the actual size of the U.S. population. Any long-term study of poverty, wages, health insurance, and other socio-demographic characteristics that examines trends over several years can be slightly affected by re-weighting. This issue exists with all government surveys.
The re-weighting effects both the native and immigrant population, however. It should also be pointed out that our estimate of 1.6 million new immigrants arriving from abroad who have taken jobs since the president came to office is based only on data from the third quarter of 2012. The CPS ask respondents when they came to the United States and if they are employed, so our estimate of new arrivals is not comparing 2012 data to 2009 data.13 But whether we examine net growth in employment or new arrivals, the data indicate that a very large share of the net growth in employment has gone to immigrants.
It is well established that illegal aliens do respond to government surveys such as the decennial census and the Current Population Survey. While the CPS does not ask immigrants if they are legal residents of the United States, the Urban Institute, the Department of Homeland Security (DHS), the former INS, the Pew Hispanic Center, and the Census Bureau have all used socio-demographic characteristics in the data to estimate the size of the illegal-alien population.14 We follow this same general approach.15
Our best estimate is that 70 to 90 percent of those who indicated that they arrived in the United States from 2009 to 2012 were legally in the country. We further estimate that 90 percent of the net increase in employment of immigrant workers was among legal immigrants. Since the Department of Homeland Security reports no meaningful increase in the overall size of the illegal population from 2008 to 2011 this finding is not surprising. Of course, no estimate of illegal immigration is exact. It is possible that somewhat fewer or somewhat more are illegal immigrants. If our estimate of the illegal share is too high then more are legal immigrants; if the estimate is too low, then more are illegal immigrants. In our view there is simply no question that the vast majority of employment gains among immigrants have gone to legal immigrants, permanent and temporary. Illegal immigration is a relatively a minor factor in both new arrivals who took jobs and the net increase in employment among immigrants.
It would a mistake to think that every job taken by an immigrant is a job lost by native. But it would also be a mistake to think that dramatically increasing the supply of workers has no impact on the employment prospects of natives, particularly given their dismal employment picture. This analysis shows that two-thirds of the increase in employment during the Obama administration has gone to immigrants, most of whom are new arrivals from abroad. The overwhelming majority of these new workers were admitted legally. This president, like those before him, has chosen not to reduce immigration despite the worst job market since the Great Depression. While natives have done better in the labor market recently, there remain a very large number of native-born Americans not working. There are also are a very large number of natives unemployed in the occupations where immigrants made the largest gains. Moreover, there are millions of native-born Americans of every education level not even in the labor force. It is unfortunate that both presidential candidates have chosen to not even discuss possible job competition between immigrants and natives.