As Harry S. Truman and Ronald Reagan famously quoted, A recession

Transcription

1 Policy Brief # 11-3 U.S. Immigration Throughout HistoryAugust 2011 The Real Unemployment By Tyler Seuc As Harry S. Truman and Ronald Reagan famously quoted, A recession is when your neighbor loses his job; a depression is when you lose yours. By those definitions, one in 10 Americans would consider the current economic status to be a depression. The state of the economy is no secret to Americans. It is on the minds of all employees and consumers and on the lips of all associated with the media and government. Although economists state that the recession ended in June 2009, recovery has been dreadfully slow and, for most workers, particularly those who are unemployed or underemployed, these statistics bear little weight. For them, the statistics that matter are the value of their home, their credit rating, interest rates, the cost of their next mortgage payment, and the price of bread and milk at the supermarket. Unfortunately, the worst economic downturn since the Great Depression is matched with the worst post-recession recovery since the end of World War II. 1 The Bureau for Labor Statistics places the unemployment rate for June 2011 at 9.2 percent. This number has not improved dramatically, a whopping 0.4 percent lower than the rate two years ago. In fact, since the end of the recession in June 2009 the unemployment rate actually has increased. 2 Luckily for those Americans with jobs the anxiety has passed. The waves of layoffs that began with the housing and banking crash have largely ceased and those who still have jobs are in no grave danger of losing them. The rate of hiring has remained stagnant, however, and workers directly impacted by the recession have been unable to find suitable employment. Many are looking for any sort of job. Others have settled for a part-time job or regressed years or decades in their careers to accept positions with a smaller paycheck. While still Tyler Seuc is from St. Louis, MO, and is currently a senior at Duke University. Tyler majors in Political Science with minors in Arabic and Environmental Science and Policy. He is interested in international relations and environmental policy and hopes to start a career in international politics post-graduation. He is a member of the Pi Kappa Phi Fraternity and a photographer with The Chronicle, Duke s student newspaper. In his spare time, Tyler enjoys photography, playing guitar, traveling, and rooting for the St. Louis Cardinals and the Duke Blue Devils. Progressives for Immigration Reform is a 501(c)(3) organization. Our goals are to educate the public on the problems created by U.S. immigration policies and to promote legislation 1 to correct them. To learn more, please visit us at:

2 others have given up on their job search altogether, choosing to rely on a spouse or returning to school in order to earn a higher degree and subsequently, incur higher debt. While the official government statistics indicate that the aggregate of unemployed rests around 14 million Americans, the actual impact of the recession is much larger. Statisticians have issued numbers that are consistently higher than government reports, generally around 20 percent or more. 3 The likely cause of this is due to limits on the government s definition of unemployed. Those in the two remaining groups, underemployed and the marginally attached, are not counted in government statistics as they are not actively seeking employment or completely unemployed. However, many in these categories would insist they are still looking for work despite receiving a paycheck. And these categories are quite large. According to Dr. Heidi Shierholz of the Economic Policy Institute, the number of underemployed stands at 11 million and there are 7.2 million marginally attached Americans. 4 That is, 32 million Americans whose employment has been cut in some way, not including those working for less pay. Perhaps the worst news for this enormous faction of our nation is that employment prospects remain extremely bleak. This is reflected in the numbers of the long-term unemployed, those individuals out of a job for over six months, which is at the highest rate since the Great Depression. The figure sits at 44.4 percent of all unemployed persons. 5 Being apart from work for that long can have devastating emotional, psychological, and personal effects. Furthermore, it is extremely detrimental to children of the unemployed, as long-term unemployment for parents can greatly affect the ability of their children to afford further education. With these grim numbers, every effort must be made to create more jobs for the millions without work. This effort should be made on all fronts; from helping businesses grow to creating work projects, to ensuring that applicants for jobs are legally permitted to work in the United States. When 450 people apply for one position, as was experienced by Shonda Sneed, 6 applicants should not have to wonder whether businesses are hiring legal workers. Impacts on Youth It is into this inhospitable climate that our youth and recent graduates enter. This pool of Americans and job seekers is at a large disadvantage. Many teenagers are looking for their first jobs in order to save up money to go to school or buy that first car of which every American dreams. Others are simply looking for a way to survive and help their families. For those still in college, a job is the difference between a semester more of studies or time spent idle without the finances to continue their pursuit of higher education. Lastly, for the youth who recently graduated and eagerly await financial independence and the joy of taking their first steps toward long-awaited careers in the real world, scarce jobs can spell the ruin of aspirations to apply one s studies or degree to a particular occupational field. It is our youth who are particularly vulnerable to employment market whims as these individuals have the most potential and possibility before them and may have the most to lose. Youth unemployment is historically around two to three times the national level and this recession has proven that rule. Current figures place the number of year olds seeking work at 17 percent. 7 The impact of high youth unemployment is felt much more harshly by minorities. For black Americans under 25 with no high school diploma, the unemployment rate is 31.5 percent and for their Hispanic counterparts it is 27 percent. Even blacks and Hispanics with a college degree have tough prospects, facing 18 percent and 11.9 percent unemployment rates respectively. 8 2

3 Table 1. Unemployment Rates Furthermore, studies have shown that having an incomplete degree has a significant impact on one s earnings. 9 And staying in school in this economy is one of the largest challenges that young people face. Half of all college students work at some time during the year and, with many adults forced further down the job ladder, teenagers are finding it quite difficult to land even the most menial of employment. In fact, the Great Recession puts this generation and this country at risk for longterm economic consequences as youth unemployment jeopardizes the educational prospects of the nation s young people. Dr. Shierholz predicts an economic impact that lasts White Hispanic Black Total Total 8.0 % 11.9 % 16.2 % 9.1 % Youth 20.7 % 35.4 % 40.7 % 17 % Youth - College Degree 8.7 % 11.9 % 18 % 9.3 % years. 10 It is critical to act swiftly in order not to lose an entire generation to this recession. U.S. Immigration Throughout History Those who will suffer the greatest due to youth unemployment are the impoverished and the lower middle class. These families are more likely to be impacted by unemployment and have less of a safety net for children desiring to pursue education. It is a cruel possibility to consider that a family on the cusp of breaking out of their economic class and pursuing the American dream of hard work and success can be suddenly crushed due to stagnant employment and rising tuition costs. However, that is the reality for many in these trying times. As we explore the distorted impact on minorities and native-born workers, it is crucial to think not just about the adults of the working class, but their children as well. Impact on Minority Wage Workers Youth - HS Only 20.3 % 22.8 % 31.5 % 22.5 % Sources: Employment Situation. Bureau of Labor Statistics. gov/news.release/empsit.toc.htm. Sheirholz, Heidi, Ph.D. Youth Unemployment Crisis. Americans for Democratic Action Education Fund Congressional Briefings. Washington, DC. 21 Jun Lecture. The economic downturn has impacted minority workers more harshly than their white counterparts. The recession has also come at a time when these same groups of citizens are facing job and wage discrimination by employers due to the large quantities of immigrant workers. For minority workers, this decline compounds the economic hardships they already face. In 2010, the U.S. Commission on Civil Rights ( Commission ) examined the impact of immigration on employment and wages. After hearing testimony from a number of esteemed economists and experts in the field of immigration and economics, the Commission found that illegal immigration has depressed wages and hurt employment prospects for low-skilled workers, a subset that disproportionately consists of black males. The panelists and the commissioners presented some very interesting results. As stated by Cornell University labor economist Vernon Briggs in his testimony before the Commission, most illegal immigrants are unskilled and poorly educated. Of illegal immigrants, 84 percent are predicted to be employed in the low-skilled labor market, with 57 percent having no high school diploma. 11 This puts them in direct competition with low-skilled American workers, notably blacks, Hispanics, and youths; the very groups most negatively impacted by the recession. Additionally, employers take advantage of 3

4 illegal workers by offering them lower wages and worse working conditions since many illegal immigrants find these wages and conditions more suitable than in their home countries. This perceived tolerance of immigrant workers is heavily exploited by employers in the hiring process, resulting in a bias against native-born workers. 12 Immigrants, legal and illegal, maintain a potential advantage in the filling of low-skill jobs, particularly positions that do not require language skills. Some employers view immigrants as preferable to native-born workers due to perceived attributes of being more tolerant of lower wages, poor working conditions, and dead-end positions. Whether or not these perceptions are realistic is irrelevant. The impact is the same. Often, employers prefer immigrants and illegal labor, thus putting native-born workers at a disadvantage in hiring. Those populations most impacted by this are black Americans and Hispanics, as these groups are most likely to be in direct competition with immigrant workers. According to University of California, San Diego, economics professor Gordon Hanson, immigrants now comprise one of seven workers in the United States, and immigration has reduced the wages for high school dropouts. 13 He noted a strong correlation between immigration and black wages, employment, and incarceration rates. According to his work, for every 10 percent increase in immigrants in an industry s workforce there is a 4.0 percent drop in black wages and a 3.5 percent decrease in black employment rates. There is also a correlation with white wages and employment, though the effect is less. 14 This trend correlates with the findings of Vanderbilt University professor Carol Swain, who also testified before the Commission. Dr. Swain spoke to the impact that the huge influx of immigrants has on people at the margins of society, 15 particularly black males. The impact of unemployment on the black community has been devastating and self-reinforcing. Dr. Swain notes that immigrant-influenced unemployment is helping to worsen persistent social problems within this community, including high rates of violent crime, single-parent households, illegitimacy [and] drug use. 16 Sustained rates of unemployment are a large cause of these problems and have enormous communal implications. To diminish these social problems, it is necessary to secure increased employment for black Americans. This would include combating racial discrimination in hiring processes, working to improve educational systems, enforcing legal hiring practices, and limiting the future numbers of low-skilled workers entering the country. These recommendations would work to serve all disadvantaged workers alike. After considering all of the testimony provided by expert witnesses, the Commission concluded there has been a significant rise in low-skilled immigration to the United States and those workers earn less today than they did in the past. Illegal immigration plays a significant role in depressing wages. The Commission report, based on testimony and studies from economists with varying political views, should be a clear indicator that it is time to curb the flow of low-skilled immigrant labor to protect the nation s poor and establish a brighter future. Additionally, workplace verification laws should be enforced. It is possible for industries to follow the law and remain competitive, which will be explored more fully in the section below. Industry Specific Consequences: Meatpacking In December 2006, U.S. Immigration and Customs Enforcement (ICE) raided six plants in six states owned by Swift & Co., a food processor. The largest single raid in ICE history resulted in the apprehension of 1,300 illegal immigrants and the voluntary departure of many other aliens from their positions in fear of further immigration enforcement action. This number was in addition to 400 employees previously caught by Swift & Co. through new employee screening practices that the company had recently enacted. The 4

5 U.S. Immigration Throughout History Center for Immigration Studies analyzed the raid s impact on the plant and its employees, producing some interesting results. 17 Prior to the ICE raids, Swift & Co., like all meatpacking plants, was characterized by dangerous working conditions and low wages. Industry-wide wages had dropped 45 percent since 1980 and nearly 23 percent of Swift & Co. s workforce was illegal. Before the raids, Swift was also known to have extremely high turnover rates, from 40 to 70 percent each year. Such high rates of turnover would undoubtedly have devastating personal and communal effects. Without long-term employment, the communities in which the plants were located could not enjoy any sense of economic security. Such high turnover rates would also force people to look for employment in other cities and towns, destroying any sense of permanency or community in those areas. Shortly after the raids, the Swift & Co. plants resumed production and were back at full capacity. The company filled the now empty slots with native-born workers and some legal immigrants. During this time, wages rose by 8 percent. Wages and working conditions remain the largest obstacles in promoting the hiring of legal immigrants. A USDA study found that wages play a very small role in the bottom line of meatpacking companies and if they rose by 33 percent, consumers would only see a 3 percent rise in prices. Likewise, the United Food and Commercial Workers Union s own study indicated that a 50 percent increase in wages would only result in a 2 percent price hike at the supermarket. 18 These results demonstrate that business models are possible where illegal immigrants are not needed in order to keep companies afloat and competitive. After examining the impact of illegal immigrants on wages and job availability at the Swift & Co. factories, it became clear that illegal immigrants were often exploited and the hiring of undocumented workers depressed the wages and working conditions for all employed at the plant, and throughout the entire industry. With further enforcement, such as the enactment of E-Verify, and compliance by employers, perhaps some of the wage decrease can be regained and conditions in this infamous industry can be improved. Implications and Solutions The problem that has been presented thus far has dealt with an oversupply of low-skilled workers that had catastrophic consequences for native-born, low-wage workers, whose conditions have worsened by the onset of the recession. Current immigration policy is an amalgam of contradicting, encouraging, self-prophesying laws that do nothing to address the current economic downsides or future consequences of mass and chain migration. Amnesties and family reunification policies that are currently in place encourage the arrival of vast quantities of low-skilled, low-education immigrants. Only 12 percent of immigrants are granted visas based on skills they possess. The United States needs a complete overhaul of its immigration policy as soon as possible to best suit the national interest. Instead of the vast quantities of family-based visas that are currently distributed, the United States should focus on recruiting workers needed for specific industries. Immigration policy should reflect up-to-date economic trends and not be designed for an unending supply of chain migration. Current policies do little to steer the nation in the direction of American principles of merit and individuality. 5

6 Instead of maintaining this antiquated and ineffective policy, it is necessary to create a completely new system of immigration; one that is adaptable to the true economic needs and the labor markets in order to promote economic growth and simultaneously protect the American worker. This system should encourage growth in highly technical fields and, more importantly, limit the flood of low-skilled, poorly educated workers. Conclusion The United States is in a precarious position with the current economic state, two wars, military intervention in Libya, threats from Iran, and excessive unemployment. These matters have dominated the lion s share of recent political discussion, with most others taking a backseat. All political commentators agree that the economy and job creation will be the primary concern of all Americans in the coming 2012 presidential election. Yet as America looks ahead to the coming election of the world s de facto leader, it is important not to neglect other important concerns. As has been discussed throughout this piece, immigration has an impact on employment and the economic well-being of our nation s workers, in particular the most vulnerable. In order to establish security for American workers and the poorest members of society, the issue of immigration must be addressed and discussed in an academic, rational way. It has been void of rational discourse for far too long. The dialogue currently revolving around immigration is too limited in scope. Those involved are heavy hitting political players and big interests. Those who are truly affected by the woes of large-scale migration cannot participate in the same manner. The true politics of immigration happen in Washington, DC, in offices on Capitol Hill, and in private discussions. For the unemployed wage worker trying to make ends meet, the realities of life are far removed from the rhetoric-driven talk inside the Beltway. A truly progressive stance looks to protect those who cannot fully participate in political decisions. The low-skilled, poorly educated workers of America are adversely impacted by our immigration patterns and it is time their plight is heard. Now is the time to address mass migration and protect America s poor. End Notes 1 Hilsenrath, Jon and Dougherty, Conor. Inside the Disappointing Comeback, July 5, The Washington Post. 5 July 2011, html. 2 Labor Force Statistics from the Current Population Study. Bureau of Labor Statistics. gov/cps/. 3 Gogoi, Pallavi. The Jobless Effect: Is the Real Unemployment Rate 16.5%, 22%, or? Daily Finance. July 16, Sheirholz, Heidi, Ph.D. Youth Unemployment Crisis. Americans for Democratic Action Education Fund Congressional Briefings. Washington, DC. 21 Jun Lecture. 6

7 U.S. Immigration Throughout History 5 Table A-12. Unemployed persons by duration of unemployment. Bureau of Labor Statistics Sneed, Shonda. The Jobs Crisis Moving to Action: A Dialogue Between Workers and Policymakers. AFL-CIO. 11 July Panel Discussion. 7 Sheirholz, Youth Unemployment Crisis. 8 9 Odio, Carlos. What the 2010 Census Means for the 2012 Elections. NDN. Washington, DC. 20 Jun Lecture. 10 Sheirholz, Heidi, Ph.D. (The Economic Policy Institute) Youth Unemployment Crisis. Americans for Democratic Action Education Fund Congressional Briefings. Washington, DC. 21 Jun Lecture. 11 Briggs, Vernon, Ph. D. The Impact of Illegal Immigration on the Wages and Employment Opportunities of Black Workers. The United States Commission on Civil Rights. Washington, DC. August Written Testimony. Text from: Briefing Report Hanson, Gordon. The Impact of Illegal Immigration on the Wages and Employment Opportunities of Black Workers. The United States Commission on Civil Rights. Washington, DC. August Written Testimony. Text from: Briefing Report Swain, Carol. The Impact of Illegal Immigration on the Wages and Employment Opportunities of Black Workers. The United States Commission on Civil Rights. Washington, DC. August Written Testimony. Text from: Briefing Report Swift & Co. Raids: Assessing the Impact of Immigration Enforcement Actions at Six Facilities. Center for Immigration Studies. March

8 Progressives for Immigration Reform is a non-profit organization seeking to educate the public on the unintended consequences of mass migration. PFIR concurs with the U.S. Commission on Immigration Reform that it is both a right and a responsibility of a democratic society to manage immigration so that it serves the national interest. It is the position of PFIR that immigration policy should consider the effects of policy on population size, population growth, skill composition of the labor force, the working conditions and wages of both immigrants and native born workers, domestic water and energy supplies, open space and preservation of biodiversity, and the emission of greenhouse gases from the United States. PFIR favors policies toward developing countries to lessen the push factors of poverty and unemployment that drive emigration th Street NW, Suite 800 Washington, DC info@pfirdc.org 8