October Employment Report; Disneyland-Style Fantasy?

By Joe Guzzardi
November 12, 2013

A Wall Street friend told me he thinks that the October Bureau of Labor Statistics report’s deceptions are so great that Disneyland must have written it. For the umpteenth straight month, the mainstream media cherry-picked the handful of positive statistics but buried profoundly troubling data.

According to the BLS employers’ survey, the one you read in your daily newspaper, in October the economy produced 204,000 jobs. Some analysts audaciously labeled the report “better than expected.”

But the household survey found that in October total employment fell by 735,000 which caused a spike in the official unemployment rate from 7.2 to 7.3 percent. The 735,000 jobs lost caused the labor force participation rate to fall by 0.4 percent to 62.8, the lowest since 1978; the employment-population ratio declined by 0.3 percent to 58.3 percent. Last month, a whopping 932, 000 Americans dropped out of the labor force.

This explosive increase in discouraged workers is the third highest in American history. If the current trend of United States’ workers who drop out continues at the existing rate, by 2017 more Americans will be on the labor market’s sidelines than participating in it. Shadow Stats, which studies flawed government economic statistics, pegs U-6 unemployment including Americans no longer looking for a job at 23.6 percent.

A closer look at the 204,000 new jobs tells a frightening tale. Well-paying, middle class jobs in manufacturing, construction, and finance have mostly vanished; six million fewer work in those categories than in 2000. Health care and education sectors have increased modestly while leisure, hospitality and retail have expanded. Unfortunately, the area that reflects the strongest job growth—leisure, hospitality and retail—is often part-time and pays the least.

Government’s real goal is not just to create jobs but to generate jobs that compensate well and therefore have high monetary value. Without the wealth that good jobs lead to, spending stagnates and the economy dips slowly but inevitably into recession.

One of the biggest factors in rising American unemployment is also the most overlooked. Federal immigration policy, operating on autopilot and disregarding the precipitous decline in the labor participation rate, has added about 1 million legal workers every year for two decades.

The Economic Policy Institute calculates that the ratio of job seekers to available jobs is 4:1. As a consequence, wages, benefits, health insurance and wealth have suffered. Nevertheless, in October and every other month in recent memory, 75,000 new legal workers enter the available employee pool, thus making it increasingly difficult for 20 million unemployed Americans, especially the unskilled, under-educated and returning veterans among them, to find work.

Even liberals agree that continued immigration hurts American workers. Former Secretary of Labor and University of California Public Policy Professor Robert Reich once said that legalizing illegal immigrants, part of the comprehensive immigration reform amnesty under consideration, would mean fewer jobs for some Americans. Said Reich: “The only reason any job remains unfilled is because the wage is too low. Require it to be filled with an American and employers have to raise the wage. But if they can get legal guest workers, they won’t."
 
Using cumulative BLS reports from October 2009 through October 2013 and linking them to immigration, which the household survey that includes demographic data allows us to do, here’s the result: the share of total jobs held by immigrants has steadily increased over the last four years to 16.5 percent. Remember that new immigrants entering the labor market each month is a well-established trend that will continue indefinitely unless federal immigration policy is restricted to reflect today’s economic reality.

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