Eric Ruark's picture


  by  Eric Ruark
No American has to be told the economy is in a severe downturn and that unemployment has increased precipitously. Those facts are plainly evident. The questions in front of us no one knows the answers to are: How many of these jobs will be lost long-term, and how long will it take the economy to “recover”?

I put the term “recover” in quotations because it means different things to different people. When the Great Recession (December 2007 – June 2009) was over, meaning economic contraction came to an end, most economists said the U.S. economy had recovered because most economists rely on the crude metric of Gross Domestic Product. They contend an increase in GDP is equal to rising prosperity, and come up with crazy ideas about how the U.S. should go about raising GDP. This is the main trick economists use to argue mass immigration is an unqualified good. Simply because it “grows the economy.”

And that’s why economists are so often divorced from the people whose lives are affected by how the economy actually functions.

Back in July 2009, the Obama Administration touted the increase in GDP as the sign that it's economic polices led to a recovery – as any modern President would do – yet, the unemployment rate continued to increase, reaching 10% in October 2009. It didn’t dip below 6% until September 2016. The labor force participation rate fell from its pre-Recession rate of 66%, and only bottomed out in September 2015 at 62.4%. Last month it dropped to 60.2%.

The unemployment rate now stands at 14.7%. That’s the highest number ever recorded since the government started officially calculating it in 1947. That’s 23.1 million people officially unemployed, meaning those who are actively seeking work while receiving unemployment benefits. The U-6 measure, which some refer to as the “real unemployment” number because it includes those who would like to work but are not counted in the official tally (U-3) is 22.8%, which is 36 million. Given that there were 3 million new unemployment claims in the first week of May, it's highly likely that the number of unemployed is going to remain quite high for quite some time.

Predictions are that it will take three to five years for the U.S. economy to get back on track, which is not surprising given that the global economy came to a screeching halt. However, it took more than a decade for the wages of hourly workers to reach the level they were before the Great Recession. Can American workers tread water for another five years hoping that GDP growth will somehow save them from an economic system that puts the profits margins of multinational corporations above their basic interests?

While economists and television talking heads refer to GDP, job creation, and the manufacturing index, they rarely talk about how American workers are faring. While the U.S. economy “recovered” from the Great Recession, many Americans never did. A lot of the jobs lost, especially middle class ones, were lost forever.

Another thing no American needs to be told is that there is a lot of disagreement and confusion about what the future holds. Any prediction about what the economy will look like in five years, let alone three months from now, is pure speculation, much of it reckless.

The Employment Situation in April 2020 - Center for Immigration Studies

The Center for Immigration Studies (CIS) for years has tracked employment figures for native-born and foreign-born workers in the United States.

In its latest report on April 2020 numbers, CIS shows the unemployment rate for native-born Americans was 14 percent, up from 3.8 percent in February, prior to the Covid-19 shutdown. For the foreign-born, which includes legal residents, guest workers, and illegal aliens, the rate in April was 16.4 percent, up from 3.6 percent in February.

Center for Immigration Studies

The total of unemployed native-born last month was 18.2 million, compared to 4.3 million for the foreign-born. Added to those numbers are 49.8 million native-born ages 16-64 who are not in the labor force, and 10.4 million foreign-born.

As the table above shows, the foreign-born had a lower unemployment rate than the native-born before the shutdown, and a higher rate after mass lay-offs began. This is because the foreign-born are more likely to be working, and competing for jobs with native-born, in food service, construction, landscaping, housekeeping, etc., that have been hardest hit initially by the economic shutdown.

Conversely, Big Tech also favors H-1Bs, H-4s (spouses of H-1Bs), and L-1 guest workers for higher-skilled jobs because they command less pay and have less job portability. Many foreign-born college graduates are hired for these reasons, not because they are the “best and brightest” in their fields. They are generally not performing essential jobs in the tech industry, and are considered expendable, as are their American counterparts when a large number of foreign workers are available.

It’s isn't that the native-born are not performing those jobs, in fact they are the majority of workers in these occupations. Instead, it’s that many employers prefer to hire foreign-born workers if they have the option because those workers earn less than the native-born, and, if they are in the country illegally, have very little bargaining power. So, foreign-born workers are proportionally more likely to be working certain jobs, and proportionally more likely to lose them in an economic downturn.

CIS also breaks out the unemployment numbers by education level.

Center for Immigration Studies

It’s not surprising that those with college degrees have a lower unemployment rate. That’s normally the case, and it is more likely that the college-educated are in jobs that allow for telecommuting and remote work. It is also true that those who have college degrees may also be employed, but underemployed, meaning they are working occupations that do not require their level of education. We find this for Americans with STEM degrees. A large number are not working in those fields due to employer preference for lower-wage H-1B workers.

While displacement and unemployment are concerns for Americans at any education level, the recent unemployment figure highlight that less-educated Americans are much more likely to be unemployed, and compete more directly with foreign workers, as the National Academies of Sciences reported in 2016.

CIS noted “While workers of every education level have experienced significant job losses, the situation for workers without a college education is especially bleak.”

To give a sense of where workers are being hardest hit, CIS listed some industries where less-educated Americans typically find work.

  • 42.0 percent for food preparers and servers
  • 21.5 percent for janitors
  • 19.1 percent for landscapers, trimmers, and groundskeepers
  • 24.0 percent for construction laborers
  • 8.7 percent for medical technologists, technicians, and licensed practical nurses
  • 7.0 percent for health care aides and nursing assistants
  • 8.9 percent for butchers and food processing workers

Note that these are some of the same occupations that employers routinely fill with H-2B guest workers, and these employers are still lobbying to have the Trump Administration increase visa numbers while claiming there are no available domestic workers.

Where Do We Go From Here?

President Trump has stopped some new immigration, but only temporarily. This executive order expires in just over a month, and the President has given little indication how he will act going forward. If the pause on new immigration is only temporary, there will likely be little relief for American workers for years to come. So far, there has been no move to reduce employment-based immigration or to suspend the entry of new guest workers.

The Administration did decide this week not to allow an increase in H-2B guest workers, while at the same time allowing H-2B workers who were already in the country to extend their stay, which does little to curtail overall numbers.

What makes this situation call for immediate and consequential action is that growth in the working-age population, driven by immigration, has been outpacing job creation growth before the COVID-19 outbreak.

Below is a chart showing the number of admissions of immigrants (legal permanent residents, LPRs) from 2000-2018. Every LPR admitted is given a lifetime work permit, but not all are working age when they become LPRs. However, most are of working age (16-64) when admitted and can work immediately.

Bureau of Labor Statistics

On top of this, there are about 1.5 guest workers* and 8 million illegal aliens employed in the United States. Altogether, in February 2020 there were 27.7 million foreign-born employed in the United States. There are simply not enough job opportunities for American workers.

If we look at the number of employed persons from January 2000 to January 2018, that number increased by 17.9 million. During the same period, the working-age population grew by 45.3 million. Economists will claim that is because the working-age population is growing older and retiring, but that only accounts for half of those not in the labor force. As we saw above, there are now 60.2 million 16-to-64-year-olds not in the labor force. Whatever your economic or political views, this is not a good indicator.

Of course, not every worker who is now out of work will be permanently unemployed. The question is: How many and for how long? One of the main factors in determining the answer to this will be: Who is admitted to the United States and how many?

There are a lot more questions that have to be answered, even at the basic level: How do we go about our daily lives in the most uncertain of times?

Some people are starting to fundamentally rethink how the U.S. economy operates. Let’s hope President Trump is one of them. One thing we do know for certain, “growing the economy” by adding millions of immigrants to the U.S. population is not a solution to anything.

*The Economic Policy Institute estimated that there were 1.4 million guest workers employed in the United States in 2013. Since that time, the number of guest workers employed through Optional Practical Training has increased significantly.

ERIC RUARK is the Director of Research for NumbersUSA

Updated: Fri, May 29th 2020 @ 12:00am EDT

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