Wall Street has been puzzling for months over the huge contrast between the dismal employment picture presented by the payroll employment survey, and the somewhat better one displayed by the household employment survey
The answer: what Peter Brimelow described in Alien Nation as "the immigration dimension"—a common but unmentionable aspect of many contemporary policy problems.
Employers added 337,000 payroll jobs in October —the most in seven months. But about half of the new jobs went to Hispanics, although they account for only 15 percent of the labor force.
Some 40 percent of U.S. resident Hispanics are foreign born, so they are a good proxy for the displacement of American workers by immigrants. This displacement phenomenon is so marked that we have developed VDAWDI—the VDARE.COM American Worker Displacement Index—to measure it.
Over the life of the first Bush Administration, VDAWDI registered 12.1—i.e. immigrant job growth outpaced native-born job growth by a factor of more than 12.
Needless to say, the Establishment media won't touch this issue. It focused on October's robust job growth total, ignoring the vast racial disparities below the top line.
Political correctness explains part of this silence. But there is another, purely statistical, explanation as well.
The monthly employment data consists of two surveys—the household survey and the employer's payroll survey. The payroll survey samples workers in 400,000 establishments who are covered by unemployment insurance. The household survey queries a stratified sample of 60,000 individuals in the workforce.
Employment data are reported by race and ethnicity in the household survey, but not in the payroll survey.
Yet economy watchers from Alan Greenspan on down regard the payroll survey as the more accurate reflection of total employment trends.
The surveys tell vastly different stories.
Since the start of the Bush Administration in January 2001, for example, payroll jobs have declined by millions and recovered by millions, but still remain below their peak. Hence the charge that Bush is the first President since Herbert Hoover to preside over a shrinking employment base.
The Household Survey, on the other hand, reports a record high level of employed workers in the U.S., with 3.5 million more working in October 2004 than in January 2001. Moreover, it reveals that job growth over this period varies greatly among racial and ethnic groups:
While the Payroll Survey estimated that 132.0 million workers held jobs in October, the Household Survey counted 139.8 million jobs – nearly 8 million more.
Why the gap?
Some economists have argued that new economy workers such as part-time consultants, eBay entrepreneurs, and even real estate agents—i.e., people who are not on payrolls, but self-employed—show up in the household survey, but not in the payroll survey.
But there's a better explanation: illegal aliens. By a cautious count, there are 8 to 10 million illegals living in America. About 6 million of them are working. By some estimates, illegals account for half of the overall growth in adult immigrant employment since 2000.
Illegal aliens will not show up in the Payroll Survey for the simple reason that employers who admit to hiring them risk stiff penalties. (Even though the Clinton and Bush Administrations appear to have quietly abandoned enforcing these laws.)
And the gap between the two employment surveys (8 million jobs) strikingly resembles the estimated number of illegal immigrant workers (6 million).
It's a shocking sign of the purging of immigration from conventional discourse that no establishment economist has spotted this.
That's what VDARE.COM is for!
Edwin S. Rubenstein (email him) is President of ESR Research Economic Consultants in Indianapolis.
