Friday, December 19, 2014

Modern helots?

From All Net Jobs Growth Since 2007 Has Gone to Immigrants by Ryan Lovelace.

This is interesting and helps address a seeming paradox of the past year or so. Many headline economic indicators have been improving over the past year but clearly in terms of both measured public sentiment and in terms of just anecdotal experience the broader public isn't believing it. This paradox is captured in an article today, WH Hails Economic Gains But Poll Finds Few Concur by Alexis Simendinger.

I have set this paradox down to three possible causes: 1) That much of the headline numbers that were improving were differentially beneficial, i.e. the benefits were going to a small subsection of the public while the middle class economic experience continued to worsen, 2) aside from class disparate impact, there is also geographical disparate impact with Washington, D.C., San Francisco and a few other cities doing very well while large swaths of the rest of the country continued to struggle, and 3) cherry picking of statistics - yes the unemployment rate has improved in the past year but the labor force participation rate has plunged and not recovered. But the above Lovelace article sheds some additional light on the mismatch between the numbers and the public sentiment.
All of the net gains in in jobs since 2007 have gone to immigrants — both legal and illegal — according to a new report from the Center for Immigration Studies, meaning that fewer native-born Americans are working today than were at the end of 2007.

From November 2007 through November 2014, the number of employed native-born Americans has decreased more than 1.45 million, while the number of employed immigrants has risen by more than 2 million (as the immigrant population grew rapidly, too), according to data compiled by the Department of Labor’s Bureau of Labor Statistics.

“Native employment has still not returned to pre-recession levels, while immigrant employment already exceeds pre-recession levels,” the report says. “Furthermore, even with recent job growth, the number of natives not in the labor force (neither working nor looking for work) continues to increase.”

Native-born Americans accounted for nearly 70 percent of the growth in the population aged 16 and older, the report notes, and yet fewer of them are working now than were in 2007.
There are some really interesting, and possibly disturbing, implications in those numbers. What are the barriers, personal, psychological, institutional, legal, cultural, etc., that could explain this differential in work rates? And more pertinently, what can or ought to be done about it?

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