A Bleak Picture

Employment among U.S. Citizens in States Represented by Gang of Eight


Employment among U.S. Citizens in States Represented by Gang of Eight

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Steven A. Camarota is the Director of Research and Karen Zeigler is a demographer at the Center for Immigration Studies


Eight U.S. senators, collectively known as the Gang of Eight (Gof8), have outlined an immigration plan that allows illegal immigrants to remain in the country and increases legal immigration in the future.1 One of their chief justifications for allowing illegal immigrants to remain in their jobs, and for increasing immigration, is that the country has a shortage of workers. Sen. Lindsey Graham (R-S.C.), one of the Go8's leaders, has made it clear that he believes there is "a shortage of labor" in the country.2 Moreover, as part the gang's efforts, labor and business leaders are negotiating the details of a new program to bring in more immigrant workers to fill "lesser-skilled" jobs.3

However, both nationally and in the states represented by the Gof8, unemployment and non-work is very high among American citizens, especially less-educated citizens (those with no more than a high school education). The less-educated are the most likely to compete with illegal immigrants.4

  • In the seven states represented by the Gang of Eight, the unemployment rate for U.S. citizens with no more than a high school education averaged 12.6 percent in 2012. This compares to an average of 10.2 percent across the other 43 states.

  • The broader measure of unemployment (referred to as U-6), which includes those who want to work but have not looked recently, shows unemployment averaged 21.7 percent for less-educated citizens in the Gof8 states for 2012. This is even higher than the 18.3 percent average in the other 43 states.

  • In the Gof8 states, U-6 unemployment was among the highest in the country for less-educated citizens in 2012:
    • 24.4 percent in Arizona, fourth-highest in the country
    • 22.1 percent in South Carolina, eighth-highest in the country
    • 22.0 percent in Illinois, ninth-highest in the country
    • 21.9 percent in New Jersey, 11th-highest in the country
    • 20.6 percent in Florida, 15th-highest in the country
    • 20.5 percent in New York, 18th-highest in the country
    • 20.1 percent in Colorado, 19th-highest in the country

  • Looking at all less-educated citizens (ages 18 to 65) shows 41.8 percent did not have a job in 2012 in the Gof8 states compared to an average of 37.9 percent in the other 43 states. This includes the unemployed and those entirely out of the labor market.

  • In total there were 6.5 million less-educated citizens (age 18 to 65) not working in 2012 in the Gof8 states. Nationally 27.7 million less-educated citizens were not working.

Introduction

Eight U.S. Senators from seven states: Marco Rubio (R-Fla.), John McCain (R-Ariz.), Lindsey Graham (R-S.C.), Jeff Flake (R-Ariz.), Chuck Schumer (D-N.Y.), Robert Menendez (D-N.J.), Michael Bennet (D-Colo.), and Dick Durbin (D-Ill.) have together proposed an immigration plan allowing illegal immigrants to remain in the country and increasing legal immigration in the future. A number of these senators, collectively known as the Gang 8 (Gof8), seem to believe that there are few Americans available to fill jobs that require relatively little education.5 Moreover, labor and business leaders working with the gang are negotiating a new program to bring in more immigrants to fill "lesser-skilled" jobs.6 The idea that there is a general labor shortage in the United States or a shortage of workers to fill lower-wage jobs that require modest levels of education is not supported by the data. Ironically, unemployment and non-work are somewhat more pronounced in the states represented by the Gof8.

Findings

Tables 1 through 4 report employment figures in 2000, 2007, and 2012 for less-educated American citizens (U.S.-born and naturalized). The tables show that unemployment and non-work are high throughout the country. Perhaps even more striking, the employment situations in the states represented by the Gof8 are among the worse in the country. All figures are from the monthly public-use files of the Current Population Survey. These three years are chosen because 2000 and 2007 are the peak years of two economic expansions and 2012 is the most recent year for which data are available. Figures in the tables represent 12-month averages (January to December) of employment in each state. The employment figures do not support the idea that there is a shortage of workers in the United States generally, nor do they support the idea that there is a shortage of less-skilled workers.

Unemployment Rate (U-3 & U-6). Table 1 shows the 2012 unemployment rate for U.S. citizens using the standard U-3 unemployment rate and the broader U-6 measure of unemployment for U.S. citizens. The table also shows the percentage of citizens not working (ages 18 to 65). Table 2 shows the same information for only less-educated American citizens — those with no more than a high school education. Prior research indicates that the overwhelming majority of illegal immigrants have no more than high school education.7 As we will see, the employment situation for U.S. citizens with this level of education can only be described as bleak, both nationally and in the Gof8 states.

The U-3, or standard unemployment measure, reported in Table 1 shows that unemployment remained high throughout most of the country in 2012. It was particularly high in the states represented by the Gof8. All seven of the Gof8 states ranked among the 20 worst in terms of U-3 unemployment among citizens. To be unemployed using the U-3 measure one has to have looked for job in the last four weeks at the time of the survey. The unemployment picture looks even worse if we use the broader measure of unemployment referred to as U-6 unemployment by the Bureau of Labor Statistics. The U-6 measure includes the U-3 unemployed, plus those working involuntarily part-time and those who say they are available for work, but have not looked recently.8 The U-6 unemployment rate for all U.S. citizens averaged 15.1 percent in the seven Gof8 states compared to an average of 13 percent across the other 43 states.9

Table 2 reports the same figures as Table 1 except that it reports them for citizens who have no more than a high school education. These less-educated Americans are having a very difficult time in the labor market throughout the country. This is especially true in the Gof8 states. The U-3 unemployment rate for less-educated citizens averages 12.6 percent in these states, compared to a an average of 10.2 percent across the other 43 states.10 The broader U-6 measure of unemployment shows that unemployment averages 21.7 percent for less-educated citizens in the Gof8 states. This is even higher than the 18.3 percent average in the other 43 states.11 Unemployment is always higher among the less-educated. However, it must be remembered that U-6 unemployment averaged 11.1 percent in 2007 in the Gof8 states and was 9 percent in 2000. The current U-6 unemployment for those with no more than high school education is extremely high relative to the recent past.

Share Not Working. The last three columns in Tables 1 and 2 show the percentage of adult citizens of working age (18 to 65) who are not working. That is, they are either unemployed or entirely out of the job market. Looking first at all workers (Table 1), on average almost a third (31.5 percent) of working-age U.S. citizens in these states did not have jobs in 2012. Of course, many who are not working cannot work or do not wish to work. But this is not always the case. It must be remembered that as recently as 2000, the share of 18 to 65-year-olds not working averaged 24.5 percent in the Gof8 states compared to 31.5 percent in 2012 in those same states.

The share of less-educated citizens not working is extraordinarily high throughout the country. Moreover, the situation in the Gof8 states can only be described as bleak. The average across the Gof8 states was 41.8 percent of U.S. citizens with no more than a high school education. The 41.8 percent not working in the states represented by the Gof8 was even worse than the 37.9 percent average in the other 43 states.12 Again, many people who are not working cannot work or do not wish to work, but in 2007, on average 33.7 percent of less-educated citizens were not working in the Gof8 states. And in 2000 31.4 percent were not working. Clearly, many of these same people who were not working in 2012 were working not so long ago.

Number Unemployed and Not in the Labor Force. Tables 3 and 4 report the number of citizens (in thousands) unemployed or not in the labor force. The tables show that throughout the country there is an enormous pool of potential workers. Table 3, which reports figures for all citizens, shows that in the Gof8 states there were 2.9 million U-3 unemployed citizens in 2012. The nearly three million unemployed in these states accounted for more than one-fourth of the nation's unemployed. That number grows to 5.2 million in these same seven states using the U-6 measure. Turning to those not working (ages 18 to 65) in the Gof8 states, we find that 13.6 million were not working. This is an increase from 10.8 million in 2007 and 9.4 million in 2000. Nationally there are now 54.7 million citizens of working age (18 to 65) who are not working, up from 38 million in 2000 — a 16.7 million increase in a little more than decade.

Turning to citizens with no more than high school education, Table 4 also shows that millions of less-educated citizens are not working. There were 6.5 million citizens (ages 18 to 65) with no more than a high school education not working in 2012 in the seven Gof8 states. There were an additional 21.2 million less-educated citizens not working in the rest of the country for a total of 27.7 million less-educated citizens not working. To place this figure in perspective, if between one-fourth and one-third of less-educated citizens had a job it would equal the estimated size of the entire illegal immigrant labor force working outside of agriculture. 13 If properly treated and paid, there would seem to be an enormous pool of less-educated labor for employers to draw from both in the Gof8 states and in the country as a whole.

Conclusion

The employment figures make the stated position of the Gof8 all the more puzzling. The idea that there is a general labor shortage in the United States or a shortage of workers to fill lower-wage jobs that require modest levels of education is not supported by the data. In 2012 there were 54.7 millon working-age citizens not working. More than half of citizens not working (27.7 million) have no more than high school education. It is difficult to overstate the size of the pool of potential workers that now exists in the United States. Whether we look at the unemployment rates (U-3 or U-6) or the share of working age citizens (18 to 65) without a job the numbers are staggering. The position of the Gang of Eight senators is even harder to understand given that things in the states they represent are actually somewhat worse than in the rest of the country.

If through enforcement a significant fraction of illegal immigrants returned to their home countries there would seem to be an ample supply of idle workers to replace them, particularly workers who have relatively little education. Also, reducing the number of less-educated legal immigrants allowed into the country would seem to make a good of sense based on the employment data.

Of course, employers might have to pay more and offer better benefits and working conditions in order to attract and retain American citizens. But improving the employment prospects and wages of the least-educated and poorest American workers can be seen as a desirable. It is surprising that senators who come from states where unemployment tends to be somewhat higher than in the rest of the country do not make such an argument. Instead these senators make the case for allowing illegal immigrants to remain in their jobs and for increasing the number of foreign workers allowed into the country each year. While employers in states represented by the Gang of Eight may wish to further increase the size of the labor force, it is hard to see that such a policy is in the interest of most voters in these states.


Methodology

Data. The data for this analysis come from the monthly public-use files of the Current Population Surveys (CPS) for 2000, 2007, and 2012. Each year represents 12 months of data averaged together. Each month the CPS includes about 131,000 respondents, roughly half of whom are in the labor force. By averaging 12 months together and creating yearly estimates it is possible to create statistically robust figure at the state level. The Bureau of Labor Statistics uses the same approach to calculate state unemployment figures.14 The CPS is the nation's primary source for unemployment and other labor force statistics. Like all government surveys, the data are weighted to reflect the actual size and demographic makeup of the U.S. population. The government publishes employment statistics that are both seasonally adjusted and unadjusted from the survey. But the yearly average data the government publishes are seasonally unadjusted. The figures in this study are also seasonally unadjusted.

Citizens. In general, the Bureau of Labor Statistics does not provide employment statistics for U.S. citizens (native-born and naturalized) separately from non-citizens. However, all CPS respondents are asked their citizenship. This report simply uses responses to the citizenship question in the public-use data to report employment statistics for American citizens.

Defining Unemployment. The standard measure of unemployment, referred to as U-3, takes the number of people who report that they are not working and have looked for a job in the last four weeks and divides it by the number actually working plus those looking for work. Those not actively looking for a job are not included in either the numerator or denominator when calculating the unemployment rate for U-3.

The broader measure of unemployment, referred to as U-6, is calculated differently. It divides the sum of the unemployed population plus involuntary part-time and marginally attached people (discouraged and other) by the civilian labor force (employed and unemployed) plus marginally attached workers. An unemployed worker is someone who does not currently hold a job, but is available to work and has looked for a job in the previous four weeks. Marginally attached workers indicate that they want to work, are available to take a job, and have looked for work in the past 12 months.15 However, they are not considered unemployed under the U-3 definition of unemployment because they have not searched for a job in the previous four weeks. Involuntary part-time workers are those individuals who report that they are working part-time for economic reasons. That is, they want and are available for full-time work, but must instead settle for part-time hours.16 Because the total U-6 measure includes the unemployed, those working involuntarily part-time, and those marginally attached to the labor market (discouraged and other), it provides a broad measure of problems in the U.S. work force.


End Notes

1 See the statement of principles laid out by the Gang of Eight on December 10, 2012.

2 See Graham's comments in the Easley Patch.

3 The joint statement from the AFL-CIO and the U.S. Chamber of Commerce issued February 21, 2013, states that there needs to be "a system that provides for lesser-skilled visas that respond to employers' needs."

4 See Jeffrey Passel and D'Vera Cohn, "Unauthorized Immigrant Population: National and State Trends, 2010", Pew Hispanic Center, 2011. Passel and Cohn find that some three-fourths of illegal immigrants have no more than a high school education. Steven Camarota, "Immigrants in the United States 2010: A Profile of America's Foreign-Born Population", Center for Immigration Studies, 2012, finds a very similar percentage.

5 Sen. Graham speaking to a Rotary Club in South Carolina in February of 2013 stated that he was, "trying to save our nation from, I think, a shortage of labor and a catastrophic broken system." On his website, Sen. McCain discusses the need for more immigrant workers in many parts of the economy and he makes clear that Americans "don't generally want the low-paying, low-skilled jobs." He goes on to argue that the nation needs more foreign workers because, "Our native-born work force is getting older. It's shrinking — remember, our birth rates are falling." In a recent interview with the Wall Street Journal, Sen. McCain also discussed the need to allow in more workers, particularly "low-skilled workers" and "agricultural workers". Like all members of the Gang of Eight, Sen. Bennet on his website expressed concern about a "labor shortages" in farming and high-tech. But he also explicitly mentions workers at "mountain resorts".

6 The joint statement from the AFL-CIO and the U.S. Chamber of Commerce issued February 21, 2013, states that there needs to be "a system that provides for lesser-skilled visas that respond to employers' needs."

7 See end note 4.

8 See the Methodology section for a more detailed explanation of how the Bureau of Labor Statistics defines U-6 unemployment.

9 These percentages reflect averages across the states. It is also possible to aggregate the data and calculate unemployment. The aggregate U-6 unemployment is 15.1 percent (±.1 percent) in the Gof8 states and 14 percent (±.1 percent) in the rest of the country, including Washington, DC. This is a statistically significant difference.

10 These percentages reflect averages across the states. It is also possible to aggregate the data and calculate unemployment. The aggregate U-3 unemployment for the less-educated in the Gof8 states is 12.4 percent (±.2 percent) and 11 percent (±.1 percent) in the rest of the country, including Washington, DC. This is a statistically significant difference.

11 These percentages reflect averages across the states. The aggregate U-6 unemployment for the less-educated in the Gof8 states is 21.3 percent (±.3 percent) and in the rest of the country it is 19.5 percent (±.2 percent), including Washington, DC. This is a statistically significant difference.

12 The aggregate share of working-age, less-educated people not working is 41.9 percent (±.3 percent) in the Gof8 states and 32.4 percent (±.2 percent) in the rest of the country, including Washington, DC. This is a statistically significant difference.

13 The Pew Hispanic Center has estimated that there were about eight million illegal immigrants working outside of agriculture. See Figure 4 and Table 6, of "A Portrait of Unauthorized Immigrants in the United States", 2009. If we assume that one-fourth of the 27.65 million less-educated citizens had a job it would equal 6.9 million new citizen workers and if one-third found employment it would be 9.2 million.

14 See, for example, this set of tables published by the BLS in January.

15 Marginally attached workers indicate that they looked for work in the last 12 months, but not in the prior four weeks. The marginally attached are comprised of two groups, both of which are included in U-6. One group is considered "discouraged". Discouraged workers provide a reason related to market conditions for why they are not currently looking for a job. The second group of marginally attached workers indicates that they are conditionally interested in finding work and are referred to as "other marginally attached workers". These individuals provide reasons such as family responsibilities, school attendance, illness, and transportation problems for why they have not searched for work in the previous four weeks.

16 Involuntary part-time workers respond that they are working part-time (one to 34 hours a week) for economic reasons. This includes those who usually work full-time and those who usually work part-time. They share a desire to work full-time.


Table Sources and Notes

Table 1

Source: Public-use files of the Current Population Survey 2000, 2007, and 2012. Figures represent a 12-month average for each year.

a U-3 is the standard measure of unemployment used by the government. It divides the number of people (ages 16+) who have looked for job in the last four weeks by the number working plus the number looking for job.
b U-6 unemployment is calculated in the same way as U-3, but it includes those who are working part-time involuntarily and those who indicated they want to work, but have not looked for job in the previous four weeks. See text for more explanation.

c Those not working are either unemployed or not in the labor force and include some of the people covered by U-3 and U-6 unemployment.
Table 2

Source: Public-use files of the Current Population Survey 2000, 2007, and 2012. Figures represent a 12-month average for each year.

a The less-educated are adults with no more than high school education.
b U-3 is the standard measure of unemployment used by the government. It divides the number of people (ages 16+) who have looked for job in the last four weeks by the number working plus the number looking for job.
c U-6 unemployment is calculated in the same way as U-3, but it includes those who are working part-time involuntarily and those who indicated they want to work, but have not looked for job in the previous four weeks. See text for more explanation.

d Those not working are either unemployed or not in the labor force and include some of the people covered by U-3 and U-6 unemployment.
Table 3

Source: Public-use files of the Current Population Survey 2000, 2007, and 2012. Figures represent a 12-month average for each year.

a U-3 is the standard measure of unemployment used by the government. It divides the number of people (ages 16+) who have looked for job in the last four weeks by the number working plus the number looking for job.
b U-6 unemployment is calculated in the same way as U-3, but it includes those who are working part-time involuntarily and those who indicated they want to work, but have not looked for job in the previous four weeks. See text for more explanation..

c Those not working are either unemployed or not in the labor force and include some of the people covered by U-3 and U-6 unemployment.

Table 4

Source: Public-use files of the Current Population Survey 2000, 2007, and 2012. Figures represent a 12-month average for each year.

a The less-educated are adults with no more than high school education.
b U-3 is the standard measure of unemployment used by the government. It divides the number of people (ages 16+) who have looked for job in the last four weeks by the number working plus the number looking for job.
c U-6 unemployment is calculated in the same way as U-3, but it includes those who are working part-time involuntarily and those who indicated they want to work, but have not looked for job in the previous four weeks. See text for more explanation.

d Those not working are either unemployed or not in the labor force and include some of the people covered by U-3 and U-6 unemployment.