July Jobs Report: “Worthless and Misleading”

By Joe Guzzardi
August 6, 2012

Here are three sources’ views on the Bureau of Labor Statistics July jobs report. Which is more credible?

About the 163,000 jobs created last month, President Obama said that he knew that persistence would pay off and that the nation would “gradually get where it needs to be.” July’s figures were above the 73,000 average new jobs reported for the quarter from April through June.

The mainstream media, loathe writing critically about the president, called the BLS data “encouraging,” “hopeful,” and “healing.”

Then there’s John Williams, a non-partisan statistician who publishes the Shadowstats newsletter that exposes and analyzes the flaws in U.S. economic data. Williams is a Dartmouth University cum laude graduate who also earned a M.B.A. from Dartmouth’s Amos Tuck School of Business. Wrote Williams: “The July employment and unemployment numbers published today, August 3rd, were worthless and likely misleading.”

Williams isn’t trolling for votes. And he doesn’t have a four-year unbroken track record of supporting the Obama administration like the media does. Therefore, I’ll trust Williams.

Even a cursory review of July numbers proves how slanted the BLS report is. How can the economy create 163,000 jobs while at the same time the unemployment rate goes up from 8.2 to 8.3 percent? The simple answer is that it can’t. Job creation was not a positive 163,000 but rather a 195,000 net loss as indicated by the more accurate household survey Williams relies on. July represents the largest monthly job loss in a year.

The media prefers to cite statistics from the payroll survey because the household survey—gasp!—reflect immigration’s hurtful impact on employment. Although little is written about immigration as it relates to jobs, it’s impossible to ignore it. Northeast University’s Center for Labor Studies research found that between 2008-2010, more than 1.1 million foreign-born worked in the United States. Household employment during the same period showed that 6.2 million native-born Americans lost jobs. Employers prefer to hire immigrants for various reasons including their willingness to work for lower wages without health care insurance.

Immigration’s negative effect on employment repeats itself each month. According to the Department of Homeland Security, Office of Immigration Statistics, in 2011 the United States issued a monthly average of 75,000 work permits to adult immigrants. Additionally, last year the federal government issued 400,000 non-immigrant visas, supposedly temporary, to overseas workers.

Unbelievably, conditions are poised to worsen. Later this month, under the terms of President Obama’s executive order that removes young aliens from possible deportation, as many as 1.2 million of them will receive work authorization. Previously unemployable because of their immigration status, they will now compete with Americans for scarce jobs.

These are devastating levels of immigration for an economy that continues to struggle. Assuming no changes to federal immigration policy, the U.S. would need to create about 300,000 jobs every month simply to get back to pre-recession employment levels. On the other hand, if immigration policy continues as is, then full employment would not return until 2028 at the earliest.

I could write a column ten times the length of this one laden with dreary and depressing statistics. Suffice it to say that every jobs sector is devastated. Only 47 percent of Americans have full time jobs.

Even though the immigration math can’t be challenged, the federal government continues on autopilot, importing more and more foreign-born workers despite the obvious pain inflicted on unemployed Americans.

Joe Guzzardi is a Californians for Population Stabilization Senior Writing Fellow. He is the former Executive Director of the Merrill Lynch Money Market Securities Department. Contact him at [email protected]