Job losses decelerated sharply in April, leading many to suspect that the recession is likely to be short and shallow rather than sharp and long. The decline in payrolls–20,000–was only one-quarter of the prior month’s job loss.
Meanwhile, the “other” employment survey made a mockery of the recession talk. Nearly 400,000 jobs were added in April according to the Household Survey. As has been the case for most of the past seven years, Hispanics were the disproportionate winners:

• Total employment rose 362,000 (+0.25 percent) from April
• Hispanic employment rose 135,000 (+0.67 percent)
• Non-Hispanic employment: rose 227,000 (+0.18 percent)

More striking is the difference in total employment. The payroll survey estimates that 137.8 million people held jobs in April. That’s about 8.5 million fewer than the 146.3 million workers found in the Household Survey.
How to reconcile the difference? Some economists have argued that new economy workers, eBay entrepreneurs, and (at least before the housing collapse) real estate agents–i.e., people who are not on payrolls–show up in the housing survey, but not the payroll survey.

There’s a better explanation: illegal aliens. By a cautious count there may be 12 million illegals living in America. The gap between payroll and household employment is suspiciously close to estimates of illegals in the workforce.

American worker displacement, as measured by the ratio of Hispanic to non-Hispanic job growth, ticked up in April, after declining from remains the peak reached in August 2007. Increased workplace enforcement may have contributed to the recent displacement decline.

Month to month displacement trends since the start of the Bush Administration are graphed in VDARE.com’s American Worker Displacement Index (VDAWDI):

From the start of the Bush Administration through April 2008:

• Total employment rose 8.553 million (+6.2 percent)
• Hispanic employment rose 4.286 million (+26.6 percent)
• non-Hispanic employment rose 4.3 million (+3.5 percent

The U.S. economy shed 80,000 jobs in March – the biggest drop in five years, as weakness in construction and finance spread to a wider swath of occupations. (See the BLS report. [PDF] .) The March drop, along with revised figures showing sharper than previously reported declines in January and February, offer the most persuasive evidence yet that we’re in a recession.

We say: Not so fast!

The “other” employment survey – of households rather than businesses – shows a curiously mixed job picture for March.

• Total employment fell 24,000 (-0.02 percent) from April
• Hispanic employment fell 132,000 (-0.65 percent)
• Non-Hispanic employment: rose 108,000 (+0.09 percent)

In fact, March is the latest of a string of months in which Hispanic workers lost ground relative to non-Hispanics. (So many Hispanics are foreign-born that we can use them as a proxy for immigrants, since the federal government chooses not to break out immigrant employment). The trend –call it reverse American worker displacement–started in late summer 2007 when housing construction started to tank.
But this also was a period when federal authorities ramped up enforcement of the immigration laws. Immigration and Customs Enforcement (ICE) made 4,940 workplace arrests last year, a 13 percent increase from 2006. In 2002 only 510 such arrests were made. [Worksite Enforcement fact sheet, ICE]
We opined that many illegals– especially those with criminal records – would self deport rather than risk being caught in an ICE bust. Their former employers are equally wary, having read media accounts of companies losing their entire workforce and paying hundreds of thousands of dollars in fines.

It’s too early to pronounce the reversal in Hispanic job growth as anything other than an economic phenomenon. That said, why haven’t non-Hispanics lost jobs at similar rates? Hispanic employment peaked at 20.6 million in September 2007. From that month through March 2008:

• Total employment fell 291,000 (-0.20 percent)
• Hispanic employment fell 350,000 (-1.70 percent)
• non-Hispanic employment rose 59,000 (+0.05 percent)

The past six months marked the longest stretch of declining native displacement in seven years—as seen in our VDAWDI graphic:

Could enforcement be the explanation? Stay tuned.

U.S. employers pared their payrolls in January for the first time in more than four years. Nonfarm payrolls fell by an estimated 17,000–the first decline since August 2003.

Goldilocks (the “just right” economy I’ve written about before) may not be dead, but she’s very sick.For Hispanics, however, she may as well be dead and buried.

Hispanic employment fell by 197,000, or by 1 percent, in January. By contrast, 234,000 more non-Hispanics were employed, an increase of 0.2 percent.

January was the fifth month in a row in which Hispanic job growth lagged non-Hispanic growth.

Over the past seven years Hispanic employment (the best available proxy for immigrant workers) grew more than 8-times faster than native (non-Hispanic) employment.

Since late summer the roles have been reversed. From August through January 2008 Hispanics either gained jobs at lower rates, or lost jobs at greater rates, than non-Hispanics.

Over this period:

• National employment rose by 495,000 (+0.3 percent)
• Hispanic employment fell by 258,000 (-1.25 percent)
• non-Hispanic employment rose by 753,000 (+0.6 percent)

The past five months marked the longest stretch of declining native displacement in seven years—as clearly seen in our American Worker Displacement graphic:

This may be a cyclical downdraft, concentrated in housing and manufacturing–sectors notoriously dependent on immigrant (and often illegal) labor.

But the total January job loss in those sectors–27,000 in construction and 28,000 in manufacturing–amount to a fraction of the month’s Hispanic job decline. Hispanics are losing jobs throughout the economy.

Could the recent Hispanic job losses reflect heightened workplace enforcement?

Possibly.

In 2007 the federal government claimed to have ramped up enforcement efforts. Immigration and Customs Enforcement (ICE) made 4,940 workplace arrests [Worksite Enforcement fact sheet, ICE] last year, a 13 percent increase from 2006. (In 2002 only 510 such arrests were made.)

Although fewer than 100 of the arrestees were employers, ICE obtained more than $30 million in fines, restitutions, and civil judgments against them in just the first three quarters of FY2007. (In FY2005 these fines totaled a laughable $6,500.)

This comes after years of sharp declines in enforcement activity.
But these apparent “spikes” in enforcement activity coincide with changes in the way the enforcement statistics are presented. The happy trend may be purely statistical, unrelated to reality.

I will write about this–and other statistical legerdemain related to immigrants–in a future article.

Meanwhile, keep the champagne corked.

Nonfarm payrolls grew by a lower-than-expected 92,000 in July, the least seen since February. And the nation’s unemployment rate rose to 4.6%, up from 4.5% in June and the highest reading since January, the Labor Department reported.

The hint of recession did not help an already beleaguered stock market.

It’s a good thing Wall Street doesn’t focus on the “other” employment survey. The Household Survey found that employment declined in July, with non-Hispanics bearing the entire loss—and then some. Here are the details:

• Total employment fell by 30,000, or by 0.02 percent
• Hispanic employment rose by 140,000, or by 0.7 percent
• Non-Hispanic employment fell by 170,000, or by 0.1 percent

Not since December has Hispanic job growth been as robust. In fact, during May and June Hispanic employment growth lagged that of non-Hispanics—a trend undoubtedly related to the construction industry’s depression.

Obviously Hispanic workers are finding jobs outside of construction. Where, we don’t know: the Household survey identifies race and ethnicity, but not the employment sector of respondents. Illegal alien workers are more likely to be counted in the Household Survey, which is why we believe it’s a more accurate measure of overall job creation than the payroll survey.

July’s Hispanic job pop pushed VDARE.COM’s American Worker Displacement Index (VDAWDI) up to the record 122.0 first reached in April. In June VDAWDI was 121.0

The black line tracks Hispanic job growth, red is non-Hispanic, and yellow—the VDAWDI index–the ratio of Hispanic to non-Hispanic job creation. All the lines start at 100.0 in January 2001 (the first month of the Bush Administration), and reflect job growth since that time.

Month to month anomalies cannot obscure the big picture: From January 2001 through July 2007 Hispanic employment rose 4.213 million, or by 26.1 percent, while non-Hispanic employment rose 4.121 million, a 3.4 percent gain.

In other words, during the Bush years Hispanic employment—a good proxy for immigrant employment—has increased about eight-times faster than non-Hispanic employment.

New housing construction may have tanked, but you wouldn’t know it from the employment figures. The number of workers employed in construction rose by 12,000 in June, to 7.681 million. Over the last 12 months there’s been little or no decline in these jobs.

The disconnect between construction activity and construction employment is a source of great puzzlement – to some. Janet Yellen, President of the San Francisco Federal Reserve Bank, questions the accuracy of the construction jobs data and the way it has depressed productivity growth. “Going forward, as the adjustment lags work themselves out, residential construction activity may post significant declines and productivity in that sector and the economy as a whole may rebound,” Yellen said in a July 5th speech.

Closer to the mark is Ray Stone of Stone and McCarthy Research Associates:

“We think that the BLS monthly payroll estimate is overstating the pulse of labor market conditions.”

“It may be that these payrolls are declining quickly, but the decline may be most pronounced among illegal immigrants that were not officially counted in the payroll data,” Stone says in an interview with Bloomberg columnist John M. Berry.

Like most analysts, Stone normally regards the payroll figures as a more reliable guide to the state of the labor market than the data from the BLS household survey. At the moment, he’s not sure that’s true.

Ahem, ahem: Where have you been, Mr. Stone? We have long maintained that the payroll survey undercounts employment growth because employers are reluctant to fess up to the number of illegal aliens in their employ. When labor market conditions are bad – as in the construction industry today – the reverse is true: the payroll survey will overstate job growth – or understate job losses – by ignoring changes in the illegal alien workforce.

Hispanic employment, as reported in the Household Survey, provides the best picture of how things are going for illegal alien workers. In June household employment rose a whopping 197,000 positions, but only 2,000 of those jobs went to Hispanics. In May, it was even worse: 157,000 new household jobs, but a 95,000 reduction in Hispanic employment.

Construction jobs are the most heavily Hispanicized of all. That was a boon for illegals when the industry was booming. Now it’s a negative.

Meanwhile, non-Hispanic workers are displacing their Hispanic counterparts.

Enjoy it while it lasts.

The fiscal impact of the Senate Bill? Well, if you live inside the Beltway and read nothing but government reports, it looks like no big deal.

A few days ago CBO reported that S.A. 1150 would increase federal spending by $10 billion over the next five years (2008-2012), mainly due to higher income tax refunds and Medicaid payments to the newly legalized. Revenues over that same period would be $15 billion higher, largely from greater Social Security payroll taxes. [Congressional Budget Office Cost Estimate June 4, 2007 Senate Amendment 1150 to S. 1348, the Comprehensive Immigration Reform Act of 2007]

That’s an average deficit reduction of $1 billion per year. So go back to sleep.

On an inside page, however, CBO acknowledges that this happy calculation ignores the costs of implementing S.A. 1150. After factoring in the new government employees needed to administer the de facto amnesty, grants to help state and local governments cover the costs of apprehending and detaining illegals, a beefed up employer verification system, and other Senate bill items, the $1 billion/year deficit reduction becomes a $3/billion deficit increase.

A little further on CBO unburdens itself further, admitting that “The net cost of the legislation would grow after 2017, as more of the affected immigrants became eligible for benefits and the per capita benefits rose……” CBO estimates that federal outlays attributable to S.A. 1150 could reach $10 billion in 2027, more than double the 2017 amount.

Remember, this is just the incremental impact of Senate 1150 on Federal spending. In recent testimony before the House Judiciary Committee, Robert Rector, the reigning domestic policy expert at Heritage Foundation, provides a more comprehensive accounting.

Rector finds that the average uneducated immigrant household:

• Receives $30,164 in federal, state, and local benefits
• Pays $10,573 in federal, state, and local taxes
• Generates a fiscal deficit of $19,588 ($30,164 less $10,573)

There are about 4.5 million such households, implying that total deficit (benefits received less taxes paid) for all poorly educated immigrant households equals $89.1 billion (4.5 million times $19,588). More than half of this deficit-$49.1 billion-occurs at the state and local government level.

Bottom line: Eighty-nine billion dollars a year, or about 0.6 percent of GDP, is transferred from native taxpayers to immigrant beneficiaries.

CBO’s deficit is a mere add-on to this much larger figure.

The U.S. unemployment rate fell to 4.7 percent in January, as 193,000 jobs were added to nonfarm payrolls. January�s job gain fell short of expectations, which had hovered just shy of 250,000.

Yet the �other� employment survey, based on households rather than businesses, shows that those job expectations were actually exceeded. A whopping 298,000 new jobs were created in January � with the vast bulk going to Hispanics, according to the household employment survey.

Because so many Hispanics are immigrants and the children of immigrants, Hispanic employment is the best proxy we have for the impact of immigration on employment. The ratio of Hispanic to non-Hispanic employment growth is a strong indication of how foreign-born workers fare relative to native-born workers in a particular month.

Hispanic employment rose 278,000, or by 1.46 percent in January, while non-Hispanic employment rose 17,000, or 0.01 percent. Not since January 2003 has Hispanic employment increased as much in a single month.

While unemployment declined for all races and ethnicities last month, Hispanics achieved this despite the fact that a significantly larger share of the Hispanic population was in the labor force. In fact, Hispanic LF participation rates rose to 69.3 percent from 68.4 percent in December � a nearly 1 percentage point gain for a statistic that historically moves glacially. The increased confidence evinced by Hispanic job seekers stands in sharp contrast contrasts to non-Hispanics, whose LF participation was unchanged in January.

Over the past five years - January 2001 through January 2006 � Hispanic employment rose by 3,226,000, or 20.0 percent, while non-Hispanic employment increased by 2,072,000, or 1.7 percent. The ratio of the two growth rates, which we call VDAWDI (the VDare.com American Worker Displacement Index), was a record 118.0 in January, up from 116.3 the prior month.

Payroll employment fell by 35,000 positions in September, a stronger than expected showing given the havoc created by Hurricanes Katrina and Rita. The Household Survey was still more upbeat, reporting a September job loss of just 17,000.

Even bigger more surprising: the Household Survey�s finding that Hispanic employment declined by 117,000, or 0.6 percent, in September.

This was the first reduction in Hispanic employment since April, and the largest monthly reduction in Hispanic employment since February 2004, when it fell 0.9 percent. Non-Hispanic employment rose by 100,000, or 0.08 percent in September, and the VDAWDI index of worker displacement declined to 113.7 from 114.5 in August.

But the long-term trend is firmly intact: From the start of the George W. Bush�s Administration (January 2001) through September 2005 Hispanic employment rose by 17.7 percent, while non-Hispanic employment grew by just 3.4 percent.

I expected VDAWDI [the VDARE.COM American Worker Displacement Index ] to rise because Hispanics seemed less likely than other groups to be among the weather related economic victims in Louisiana and Mississippi. The storms� impact on heavily Hispanic regions of Florida may be the missing ingredient.

Or the September employment figures may simply be wrong - despite the best efforts of BLS to make adjustments.

The September Household Survey was conducted �largely according to standard procedures� according to the BLS press release, adding that �Efforts were made to contact households in storm-affected areas with the exception of Orleans and Jefferson parishes in Louisiana, which were under mandatory evacuation orders when instructions were issued.�

I suspect the BLS figures underreport job losses throughout the Gulf region, and that this may have distorted VDAWDI for the month of September.

Stay tuned.

While April job growth was a surprisingly robust 274,000, the number of employed Hispanics dipped by 12,000.

This is a rarity. As we�ve been chronicling, since the start of the Bush Administration (January 2001) Hispanics have taken 2.3 million, or 68 percent of the 3.3 million new jobs created in the U.S. A monthly Household survey is the source of employment data by race and ethnicity; the more frequently cited establishment survey is the mainline media�s source for total employment figures.

Another study released last week raises questions about this Hispanic-led job growth. Average Latino wages declined 2.6 percent in 2004 on the heels of a 2.2 percent fall the prior year. New Latino immigrants were the biggest losers.

The findings, from the Pew Hispanic Center, show the pay gap between Hispanic and non-Hispanic workers expanding from 30 percent in 2003 to 32 percent in 2004. [Latino Labor Report, 2004 | More Jobs for New Immigrants but at Lower Wages, by Rakesh Kochhar]]

The author of the Pew study professes “surprise” that Hispanic wages would fall at a time when they are having such “luck” in getting jobs.

A refresher course in Economics 101 is in order here.

Falling prices denote a surplus. That is a basic principle of economics. Falling Hispanic wages are thus a signal sent by a labor market that is saying what many of us have been saying for years: Immigrant workers are simply not needed. Far from doing the jobs that Americans “won’t do,” Hispanic immigrants are displacing low wage natives�Hispanic and non-Hispanic alike.

When will it end? Eventually wages in this country will converge to levels prevailing in Mexico and the rest of Latin America, dragging immigrants and poorly-educated natives down to a new “equilibrium.”

At that point the economic incentives to immigrate will cease.

So will the American Dream. [Edwin S. Rubenstein] - 05/08/05

While April job growth was a surprisingly robust 274,000, the number of employed Hispanics dipped by 12,000.

This is a rarity. As we�ve been chronicling, since the start of the Bush Administration (January 2001) Hispanics have taken 2.3 million, or 68 percent of the 3.3 million new jobs created in the U.S. A monthly Household survey is the source of employment data by race and ethnicity; the more frequently cited establishment survey is the mainline media�s source for total employment figures.

Another study released last week raises questions about this Hispanic-led job growth. Average Latino wages declined 2.6 percent in 2004 on the heels of a 2.2 percent fall the prior year. New Latino immigrants were the biggest losers.

The findings, from the Pew Hispanic Center, show the pay gap between Hispanic and non-Hispanic workers expanding from 30 percent in 2003 to 32 percent in 2004. [Latino Labor Report, 2004 | More Jobs for New Immigrants but at Lower Wages, by Rakesh Kochhar]]

The author of the Pew study professes “surprise” that Hispanic wages would fall at a time when they are having such “luck” in getting jobs.

A refresher course in Economics 101 is in order here.

Falling prices denote a surplus. That is a basic principle of economics. Falling Hispanic wages are thus a signal sent by a labor market that is saying what many of us have been saying for years: Immigrant workers are simply not needed. Far from doing the jobs that Americans “won’t do,” Hispanic immigrants are displacing low wage natives�Hispanic and non-Hispanic alike.

When will it end? Eventually wages in this country will converge to levels prevailing in Mexico and the rest of Latin America, dragging immigrants and poorly-educated natives down to a new “equilibrium.”

At that point the economic incentives to immigrate will cease.

So will the American Dream.

Non-farm payrolls grew 146,000 in January, to 132.6 million jobs. Although the gain was less than what economists had expected - 189,000 was the consensus forecast - it was enough to finally breach the February 2001 pre-recession peak. More importantly for the Bush Administration, the January payroll increase enabled the President to avoid the stigma of being the first chief executive since Herbert Hoover to preside over net job losses. Job growth during Bush�s first term totaled 119,000, a paltry 0.1 percent gain over four years.

Because so many Hispanics are immigrants and the children of immigrants, Hispanic employment is the best proxy we have for the impact of immigration on employment. The ratio of Hispanic to non-Hispanic employment growth is a strong indication of how immigrants have fared relative to native-born workers in a particular month.

Hispanic employment fell by 54,000, or by 0.3 percent, in January, while non-Hispanic employment rose by 139,000 positions, a gain of 0.1 percent. These are seasonally adjusted numbers from the Household Survey, a separate employment survey that asks respondents their race and ethnicity as well as their work history.

Interestingly, the raw (unadjusted) data show both Hispanics and non-Hispanics lost ground in January, with Hispanic employment falling by 2.2 percent and non-Hispanic employment falling 1.0 percent.

One wonders if the �seasonal adjustment� factor is different for Hispanics and non-Hispanics. Is January�s Hispanic job loss real, or does the seasonal adjustment factor make things look worse than they really are? There are many stories of major Mexican migrations south at year end.

These are subjects for future research.

In any event, January�s results are an anomaly. From the start of the Bush Administration in January 2001 through January 2005:

• Hispanic employment rose by 2,085,000, or 12.9%
• non-Hispanic employment rose by 385,000 million, or 0.3 percent
• The ratio of Hispanic to non-Hispanic employment growth was 43.0 (12.9/0.3)

  In other words, since January 2001 immigrant employment has grown 43-times faster than native employment. Thus the VDARE.COM American Worker Displacement Index [VDAWDI] in January 2005 was 43.0, down from 65.7 in December.

  For further details, see http://www.bls.gov/news.release/pdf/empsit.pdf