Jobs, Wages and Foreign-Born Workers

by Joe Guzzardi
April 1, 2011

The March jobs report reflects a continuing trend toward miniscule unemployment rate drops. After falling in February to 8.9, it now stands at 8.8 percent. The March gain of 216,000 jobs prompted White House officials to predict that the long awaited turnaround has arrived. But employment statistics can’t be fully evaluated unless the pay scale is included in the analysis.

Let’s look more closely at those 216,000 jobs, most of which pay less money than Americans once earned. Assume you’ve been hired at your local supermarket. According to the Bureau of Labor Statistics, you’re officially employed. But the $9.00 an hour wage your new job pays doesn’t cover basic household expenses.

The National Employment Law Project confirmed the disturbing trend toward low wage jobs in its report titled “A Year of Unbalanced Growth.” The NELP found that the 1.3 million jobs created since February 2010 pay, on average, pay significantly lower wages than the 8.4 million jobs lost between January 2008 and February 2010.

The biggest losses were good jobs that paid $19.05 to $31.40 an hour; the 1.3 million added jobs pay $9.03 to $12.91.

Think of it this way: Since 2007, the net jobs lost total is 7.1 million. The small fraction that have been created pay less than 50 percent of the former wage levels.

For American workers’ well being, the administration should focus on salaries rather than a physical head count of the employed. The automobile and airline industries may be hiring again but pay has been dramatically slashed. Other workers, many in the public sector, have been “furloughed” several days a month which translates in many cases to a 20 percent reduced salary.

Many Americans are reluctant to work for small pay, preferring instead to spend their time searching for meaningful employment. Some have given up. Job seekers who have dropped out make the unemployment rate look far better than it really is. According to former Secretary of Labor Robert Reich, if the share of Americans who have given up looking for work were included in the unemployment rate it would be 11.5 percent.

One of the biggest culprits in American worker displacement is the presence of millions of legal immigrants who hold valid work permits. The $9.00-$12 jobs Americans reject appeal to recently arrived immigrants. Employers can (and do) hire them without skirting any laws.

Luckily for disenfranchised Americans, a Capitol Hill hearing held Thursday offered a ray of hope that the tide of foreign-born workers may slow. Although business leaders testified at a Senate Judiciary Committee hearing that an increase in the 65,000 H-1B visa cap is essential; their pleas were met with skepticism.

Judiciary Chairman Smith, who normally favors importing so-called skilled workers, said that he can’t endorse an increase from 65,000 given America’s high unemployment rate. Expressing concern that this visa is fraud-ridden, Smith suggested tighter H-1B standards may be necessary.

Said Smith: “I am also concerned about the legacy of fraud in the H-1B program. At a hearing over a decade ago, we heard about petitioning companies that were nothing more than a P.O. Box, an abandoned building or a fictitious address and single telephone number. We heard about H-1B workers slated for employment as janitors or nurse’s aides or store clerks.”

Steve King (R-Iowa) made a firmer statement: “There is such a thing as too much legal immigration. Too much legal immigration drives down wages.

With the nation well into its fourth year of a severe jobs recession, it’s about time that Congress made the connection between legal immigration and unemployment.

Joe Guzzardi has written editorial columns—mostly about immigration and related social issues – since 1986. He is a senior writing fellow for Californians for Population Stabilization (CAPS) and his columns have frequently been syndicated in various U.S. newspapers and websites. He can be reached at [email protected].