Thursday, March 10, 2011

Obama's recovery, part 2: not so good for native-born OR immigrant workers

The Pew Hispanic Center has studied the impact of the recession and recovery on foreign-born workers in the USA (presumably including legal immigrant, temporary resident workers and illegal immigrants). In the recovery period, foreign-born workers gained jobs even as native-born workers lost them:

In the year following the official end of the Great Recession in June 2009, foreign-born workers gained 656,000 jobs while native-born workers lost 1.2 million, according to a new analysis of U.S. Census Bureau and Department of Labor data by the Pew Hispanic Center.

As a result, the unemployment rate for immigrant workers fell 0.6 percentage points during this period (from 9.3% to 8.7%) while for native-born workers it rose 0.5 percentage points (from 9.2% to 9.7%).

But this isn't unalloyed good news for anybody. It turns out that while foreign-born workers found more jobs, they haven't found enough to make up for their losses in the recession. Moreover, the jobs they have found pay less:

But the jobs recovery for immigrants is far from complete. The 656,000 jobs gained by immigrants in the first year of the recovery are not nearly sufficient to make up for the 1.1 million jobs they lost from the second quarter of 2008 to the second quarter of 2009. Over the two-year period from 2008 to 2010, second quarter to second quarter, foreign-born workers have lost 400,000 jobs and native-born workers have lost 5.7 million jobs. The unemployment rate for is still more than double the rate prior to the recession when it stood at 4.0% in the second quarter of 2007.

Also, even as immigrants managed to gain jobs in the recovery, they experienced a sharp decline in earnings. From 2009 to 2010, the median weekly earnings of foreign-born workers decreased 4.5%, compared with a loss of less than one percent for native-born workers. Latino immigrants experienced the largest drop in wages of all.

The Obama Administration really does look like it's going to leave individual Americans - and resident non-citizens - poorer than it found them.

Hat tip: Mark Krikorian, The Corner, NRO.

Obama's recovery: working less, for lower pay

It's swell how the Obama Administration's crack economic team is remaking work in America:

• Lower-wage industries -- things like retail and food preparation -- accounted for 23 percent of the jobs lost during the recession, but 49 percent of the jobs gained over the last year, a recent study (pdf) by the National Employment Law Program found. Higher-wage industries, by contrast, accounted for 40 percent of the jobs lost, but just 14 percent of the jobs gained. In other words, low paying jobs are increasing as a percentage of total jobs, while high-paying jobs are on the decline.

• Meanwhile, the percentage of those working who have part-time jobs and want full-time ones surged in mid-February to 19.6 percent -- almost as high as it was a year ago before the recovery began, according to Gallup numbers. That suggests, of course, that a large number of the new jobs created over the last year are part-time.

• And a recent Wall Street Journal analysis found that even though productivity rose 5.2 percent from mid 2009 to the end of 2010, wages increased by just 0.3 percent. That means only 6 percent of productivity gains were shared with workers. In past recoveries, that figure has averaged 58 percent. This time around, far more of the gains went to shareholders, in the form of profits, which are at record levels.

What this means is that even as the headline unemployment figure declines, the total wage base (on which income taxes are assessed and from which consumers spend the money that generates sales taxes) will not recover to its pre-recession levels. And, in turn, that means that Federal and State tax revenues will not recover along with nominal employment numbers.

To grow our way out of our fiscal problems, we'd need high-paying, full-time jobs. Since the Obama Recovery isn't producing those, we're left with the only alternative: cut government spending drastically. (Historical experience teaches that raising taxes reduces tax revenue in the long run.)