May 14, 2004

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A Displaced American Quant Reflects On Those Enterprising Immigrants

From:  Randall Burns [email him]

One of Bush's cheer leaders continues to promote the notion that job growth in the US is accelerating—and once again, the basic effect of immigration on labor economics is being ignored.

According to Forbes magazine, now we are seeing the US economy growing at 171,000 jobs per month.

Of course, the story failed to notice that immigration last year was adding over 125,000 job seekers per month.

Likewise, there was no analysis in how demographics played a role here—since 1939 was a rather low birth rate year—and 1986 was a year during which we were seeing the "baby boom echo."

Likewise, we are seeing no analysis on how temporary worker visa programs are adjusting the labor supply (after the lifting of the L-1 cap last year). Still, it is likely we are seeing at least 10,000 new arrivals per month in excess of exits and conversions of temporary worker status to green card holders (the current H-1B cap is now 65,000).

Since Forbes magazine's research staff is so limited in their analytical capacity, let's do some arithmetic here: 171,000-125,000-10,000=36,000.

So by Forbes' own admission and use of U.S. government statistics, there are 8 million unemployed in the US. So less than 1/2 % of them actually found jobs.

Actually, it is worse—much worse.

In 1939, there were 2.266 million births; in 1986 3.756 million So, if we assume that folks enter the workforce between ages 18-20 and exit around 65, and 70% of those in those ages are working at any time (taking account of students, the ill, those caring for small children), we'd need at least another million jobs per year just to keep up with the folks born in the US newly arriving to the work force.

So the Bush economy just plain isn't keeping up with any kind of reasonable rate of job growth necessary to sustain the US population.

The growth in jobs over new immigrant arrivals is just plain a drop in the bucket.

In fact, the U.S. isn't even doing as well creating jobs for its citizens as nations like Japan that have restrictive immigration policies—and are facing their economic problems head-on. 

[More from Randall Burns]

[Peter Brimelow replies reasonably: I suppose I should defend my former employer by pointing out that the story is actually from Reuters—but wotthehell, they ran it. And they're still useless on immigration!]