November BLS Report Excludes Outsourcing, Worker Visas Impact

By Joe Guzzardi
December 7, 2015
 
The Bureau of Labor Statistics November jobs report was unexciting. In today’s economy unexciting means bad news for American workers. Of the 211,000 jobs created in November, about 70,000 were in low-paying sectors like retail, and the leisure industry. Many were part-time, a phenomena the Wall Street Journal has referred to as “the full-time scandal of part-time America.” Fewer than half of U.S. adults work full-time.  During the so called post-recession recovery, involuntary part-time employment has remained at persistently high levels.
 
Hiring part-time workers helps employers who can deny benefits like medical care, paid vacation and other perks that they otherwise have to offer to full-time employees. And while part-time employment has always been part of the American economy, it’s increased steadily over the last seven months. More troublesome, in November, Americans detached from the labor force hit 94.5 million, and that number has increased by than 2 million during the last year.
 
Another huge challenge for workers is that stubbornly flat wages that, adjusted for inflation, have remained in place for decades. Last month, average hourly earnings rose $0.04 to $25.55, hardly a lifestyle changing increase. And a decline in the average hours worked from 34.6 to 34.5 offset the wage bump. Making more, but working less is a poor trade-off. Meanwhile year-over-year wage growth, was 2.3 percent in November, far below the 3.5 to 4 percent Wall Street hopes for.
 
Two variables need closer scrutiny when analysts study the labor market: outsourcing and tens of millions of work-authorized legal immigrants and non-immigrant guest workers. In his research titled “The Offshore Outsourcing of American Jobs: a Greater Threat than Terrorism,” former Assistant Treasury Secretary and Wall Street Journal Associate Editor, Paul Roberts wrote that before outsourcing became common, Americans worked with more capital and better technology, and their higher productivity protected their middle class wages. But the advent of outsourcing created a lose-lose-lose situation for American employees, American businesses, and the American government.
 
Outsourcing has brought about record unemployment in engineering fields and a major drop in university enrollments in technical and scientific disciplines. Many of the remaining jobs are being filled by lower paid foreigners brought in on H-1B and L-1 visas.  As seen in the recent cases at Disney, Southern California Edison, and Toys “R” Us, American employees are discharged after being forced to train their foreign replacements.
 
The impact of an average one million legal immigrants entering the U.S. since 1990 has started to show up in employment data. Using BLS and Census Bureau data and starting at 2007, shows that in the past 8 years, 300 percent more foreign-born workers have been added to payrolls than native-born.
 
Roberts’ report, written before Paris and San Bernardino but still timely in its labor market insights, addressed the adverse long-term effects on the American nation of lost jobs, stagnant wages, growing income inequality, and the urgent need to reverse the pattern of displacing U.S. workers’ expense.
 
In its final weeks before the Christmas recess, Congress will be considering a host of bills including one to prohibit companies with more than 50 employees from hiring H-1B visa holders if those companies already have 50 percent of its staff on work visas. The bill, co-sponsored by Senate Judiciary Chair Chuck Grassley (R-Iowa) and Richard Durbin (D-Illinois) would give struggling American a much-needed boost, and help to put them back on equal standing with overseas workers.