Study Finds Young Workers Displaced by New Immigrants

AccountingWEB.com - Oct-3-2006 - That the arrival of new immigrants in a state results in a decline in employment among young native-born workers in that state is just one of the stark images revealed by the authors of The Impact of New Immigrants on Young Native-Born Workers, 2000-2005.

Published recently by the Center for Immigration Studies, the study analyzes recent employment data and draws a stark picture of the effects of immigration on American-born workers and the structure of the U.S. labor market. Andrew Sum, Paul Harrington and Ishwar Khatiwada of the Center for Labor Market Studies at Northeastern University, conclude from their study of data from Current Population Survey (CPS) monthly household surveys of employed persons, conducted by the Census Bureau for the Bureau of Labor Statistics (BLS), the Current Employment Statistics Survey (CES) and other U.S. Bureau of Labor statistics, that the arrival of new immigrants in a state results in a decline in employment among young native-born workers in that state.

The number of employed persons in the United States increased by 4.8 million from 2000-2005, the study says. During 2005, 4.1 million new immigrants were working here, accounting for 86 percent of the total increase. Among all men, the total increase in employed persons was 2.6 million, while the increase in employed immigrant men was 2.7 million, indicating a decline in the number of employed native-born males. Among women, immigrants accounted for 1.3 million of the total of 2.1 million new jobs.

Employment levels among workers, aged 16 to 34, have fallen by more that 1.5 million between 2000 and 2005, according to the data, a decline that might be explained by a decline in the population in this age group, but in fact, the authors say, the population of native born males, aged 16 to 34, increased by nearly 1.1 million during this period.

The employment to population (E/P) ratio of young males has fallen sharply in the last five years, the study says and “in the case of male teens, the 2005 E/P ratio was the lowest recorded in the United States over the entire 58-year period covered by the Current Population Survey (CPS) teen employment series.” The study found similar employment trends among females.

Retired workers might potentially be a source of competition for jobs normally taken by teens and young adults, but the authors note that older workers have “differing levels of work experience, expectations of hours . . . and are paid at considerably higher wage rates than are teen and young adult workers.”

The authors compared data from the two national surveys published by the U.S. Bureau of Labor Statistics, the CES payroll survey and the CPS household survey, to identify trends in the job market from 2000 to 2005. The CES monthly survey is based on a sample of 160,000 businesses and government organizations that cover 400,000 individual establishments that participate in the unemployment insurance system. The CPS household survey counts the number of employed persons in a household, and includes agricultural workers, self employed workers and some “off the books” workers, who would not be included in the payroll survey, the study says.

Historically, the two surveys have tracked one another well, but with much higher rates of salaried growth during the early years of recovery from a recession, the authors say. From 2000 to 2005, however, the CPS survey of growth in employment in households has risen much more rapidly than growth in salaried employment.

Since the end of the 2001 recession, payroll employment has increased by 3.2 million jobs, while the total number of employed persons rose to 6.4 million, a substantial change from earlier patterns of job growth.

The authors adjusted CPS figures to exclude agricultural workers and found that non-farm employment jumped to 4.9 million over the period, indicating that the number of agricultural workers declined. This suggests, they say, that agricultural employment was not a major source of new job opportunities for immigrants, and that workers found opportunities in other areas of the economy.

Much of the new payroll job creation was concentrated in the government sector, the report goes on to say, where native-born workers were more likely to find jobs. The CES survey of payroll jobs showed a total increase of 1.2 million jobs, but that non-farm private sector employment increased by just 665,000 over the past five years.

The CPS household survey found that the number of persons employed by the government increased by 1.1 million, so some of these jobs were contract or other non-salaried jobs. The CPS household survey found an increase of 3 million jobs in private sector, non-farm jobs.

The authors cite statistics for Texas as an example of a state where growth has been in the private sector. The number of employed residents increased by 733,000 between 2000 and 2005, while payroll employment increased by only 308,000. The number of new immigrants working in the state increased by 388,000, the second largest increase in the country.

The authors conclude that “the unprecedented gap between the household and payroll surveys’ estimates of employment growth over the past five years is primarily the result of concentrating new employment growth in independent contractor and off-the-books jobs. Employers in many sectors, especially construction, landscaping, retail trade, office cleaning and leisure and hospitality industries, as well as in private households . . . are increasingly re-organizing work to take advantage of the substantial influx of new illegal immigrants into the United States since 2000.”