Dropping Out
Immigrant Entry and Native Exit
From the Labor Market, 2000-2005
March 2006
By Steven A. Camarota
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Advocates of legalizing illegal aliens and increasing legal immigration argue that there are no Americans to fill low-wage jobs that require relatively little education. However, data collected by the Census Bureau show that, even prior to Hurricane Katrina, there were almost four million unemployed adult natives (age 18 to 64) with just a high school degree or less, and another 19 million not in the labor force. Perhaps most troubling, the share of these less-educated adult natives in the labor force has declined steadily since 2000.
• Looking first at all workers shows that between March 2000 and March 2005 only 9 percent of the net increase in jobs for adults (18 to 64) went to natives. This is striking because natives accounted for 61 percent of the net increase in the overall size of the 18 to 64 year old population.
• As for the less-educated, between March of 2000 and 2005 the number of adult immigrants (legal and illegal) with only a high school degree or less in the labor force increased by 1.6 million.
• At the same time, unemployment among less-educated adult natives increased by nearly one million, and the number of natives who left the labor force altogether increased by 1.5 million. Persons not in the labor force are neither working nor looking for work.
• In total, there are 11.6 million less-educated adult immigrants in the labor force, nearly half of whom are estimated to be illegal aliens.
• Of perhaps greatest concern, the percentage of adult natives without a high school degree who are in the labor force fell from 59 to 56 percent between March 2000 and 2005, and for adult natives with only a high school degree participation in the labor force fell from 78 to 75 percent.
• Had labor force participation remained the same, there would have been an additional 450,000 adult native dropouts and 1.4 million adult natives with only a high school degree in the labor force.
• Data collected since Hurricane Katrina, in January 2006, show no improvement in labor force participation for less-educated natives. It shows a modest improvement in unemployment only for adult native dropouts, but not for natives with only a high school degree.
• The decline in less-educated adult natives (18 to 64) in the labor market does not seem to be the result of more parents staying home with young children, increased college enrollment, or early retirement.
• There is some direct evidence that immigration has harmed less-educated natives; states with the largest increase in immigrants also saw larger declines in natives working; and in occupational categories that received the most new immigrants, native unemployment averages 10 percent.
• While most natives are more educated, and don’t face competition from less-educated immigrants, detailed analysis of 473 separate occupations shows that 17 million less-educated adult natives work in occupations with a high concentrations of immigrants.
• Some of the occupations most impacted by immigration include maids, construction laborers, dishwashers, janitors, painters, cabbies, grounds keepers, and meat/poultry workers. The overwhelming majority of workers in these occupations are native-born.
• The workers themselves are not the only thing to consider; nearly half of American children (under 18) are dependent on a less-educated worker, and 71 percent of children of the native-born working poor depend on a worker with a high school degree or less.
• Native-born teenagers (15 to 17) also saw their labor force participation fall — from 30 percent in 2000 to 24 percent in 2005.
• Wage data show little evidence of a labor shortage. Wage growth for less-educated natives has generally lagged behind wage increases for more educated workers.
A national unemployment rate of 5 percent is irrelevant to the current debate over illegal immigration because illegals are overwhelmingly employed in only a few occupations, done mostly by workers with only a high school degree or less. In these high-illegal occupations, native unemployment averages 10 percent — twice the national average. Moreover, the unemployment rate does not consider the growing percentage of less-educated workers who are not even looking for work and have left the labor market altogether. It would be an oversimplification to assume that each job taken by an immigrant is a job lost by a native. What is clear is that the last five years have seen a record level of immigration. At the same time, the unemployment rate of less-educated natives has remained high and the share that have left the labor force altogether has grown significantly. Wage growth has also generally been weak. Thus it is very hard to see any evidence of a labor shortage that could justify allowing illegal aliens to stay or to admit more as guestworkers. Rather, the available evidence suggests that immigration may be adversely impacting less-educated natives. The statistical findings of this study are consistent with other research that has looked at the pattern of immigrant job gains and native loses in recent years.
http://www.cis.org/articles/2006/back206.html