May BLS Report Minimizes Population, Immigration Growth

By Joe Guzzardi
June 9, 2014

The Bureau of Labor Statistics May jobs report told two tales. The official one that makes headlines and evening news broadcasts revealed that 217,000 jobs were added last month. The unemployment rate remained unchanged from April at 6.3 percent.

Some analysts hailed May as a milestone month where the 8.7 million lost jobs since the recession ended have finally been recovered. Wall Street and the financial media hailed the BLS report as a signal that, at last, happy days are here again and aren’t likely to go away anytime soon. Paul Ballew, Dun & Bradstreet’s chief economist, expects monthly job additions going forward to average about 240,000. 

As always with the BLS report, the depressing second unofficial tale is found beneath the surface. The discouraged workers category—those who have given up looking for jobs—is stuck on 3.4 million. Wages won’t rise anytime soon.  

A large unemployment pool translates into looser labor markets that in turn means continued stagnant wages. Economic historians note that wages have been flat for nearly four decades. Michael Greenstone and Adam Looney, Brookings Institute Senior Fellows estimate that among working-age men 25-64 the real earnings of median males has declined 19 percent since 1970. The 2010 median male earned the same as he did in a half century ago in 1964. 

The least discussed but most important variable in job creation is immigration and population growth. On average, each month 90,000 legal immigrants receive work permits thereby absorbing nearly 50 percent of last month’s 217,000 newly created jobs. Because immigration causes greater job competition, it also reduces U.S. workers’ wages, the obvious outcome of supply and demand economics. With joblessness high and gains mainly concentrated in low-wage industries like the restaurant and hotel industries, hundreds of thousands of Americans now work in positions that pay less than they previously earned. In some cases, their lower earnings have pushed them out of the middle class and into the working poor.

The alternate method of gauging employment, the Household Survey that differentiates between native-born and immigrant workers, found that May job growth was only 145,000 jobs with the native-born share falling by 39,000 from April and immigrants’ share increasing 184,000. High immigration with its adverse effect on American jobs and wages dates back to the Civil War. Historians noted that in the decades immediately following 1865, a large influx of immigrants contributed to a 14 percent decline in urban wages. Not until the Immigration Act of 1924 that established quotas did wages stabilize for most Americans. 

As for how many jobs must be created to keep up with population growth, (birth rate plus immigration minus deaths and emigration), the Federal Reserve Bank of Atlanta calculates that to maintain the current, albeit deceptive, 6.3 percent unemployment rate, 98,226 jobs must be added monthly, almost exactly the total of new immigrants that arrive each month.

Common sense people who study the data and are guided by facts would quickly conclude that the last thing the U.S. needs is an immigration bill that will immediately give work permits to 12 illegal immigrants, technically unemployable because of their alien status, and import nearly 30 million overseas workers within a decade. But finding rational people on agenda-driven Capitol Hill is next to impossible. That’s why, despite the mountain of evidence that argues against more immigration, the White House and Congress go forward full bore, cravenly disregarding Americans’ best interests.

###

Joe Guzzardi is a Californians for Population Stabilization Senior Writing Fellow whose columns have been nationally syndicated since 1987. Contact him at [email protected]