A Bleak Employment Picture for the Young

Unemployment and Underemployment In the Second Quarter of 2011

By Steven A. Camarota September 2011

Unemployment and Underemployment In the Second Quarter of 2011

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Steven A. Camarota is the Director of Research at the Center for Immigration Studies.


The Obama administration recently announced that many illegal immigrants currently in deportation proceedings would be allowed to stay in the country and would receive work authorization. This decision is difficult to reconcile with the bleak employment situation of American workers, particularly the young and less educated who are the most likely to compete with illegal immigrants for jobs. This report provides a detailed breakdown of employment for U.S.-born and foreign-born workers by age and education. (All figures are seasonally unadjusted.)

Among the findings:

  • In the second quarter of 2011, the standard unemployment rate (referred to as U-3) for U.S.-born adults (18-plus) who have not completed high school was 20.8 percent. For young adults (18 to 29) who have not completed high school it was 30.7 percent.

  • Using the broader measure of unemployment (referred to as U-6) that includes those who want to work, but have not looked recently, and those forced to work part-time, the rate for U.S.-born adults (18-plus) who have not completed high school was 32.4 percent. For young adults (18 to 29) who have not completed high school the U-6 measure was 43.9 percent.

  • The U-3 unemployment rate for young (18 to 29), U.S.-born workers who have completed high school, but have no additional education, was 18.2 percent in the first quarter of 2011. Using the U-6 measure, it was 31.8 percent.

  • The U-3 rate for U.S.-born, young (18 to 29) adults who have completed some college, but do not have a bachelor’s degree, was 11.2 percent. Using the U-6 measure, it was 20.2 percent.

  • Those with a bachelor’s degree generally have been more insulated from recessions than other workers, and to some extent this is still true. But for young (21 to 29) U.S. workers with a bachelor’s degree, the U-6 measure was 10.4 percent in the first quarter of 2011. This is almost double their U-6 rate of 5.4 percent in the second quarter of 2011.

  • In most cases, unemployment for young, U.S.-born workers is double or nearly double what it was in the first quarter of 2007, before the recession began.

  • The number of U.S.-born working-age adults (18 to 65) not working was 51.2 million in the second quarter of 2011, up 9.7 million compared to the second quarter of 2007, before the recession began.

  • If we consider all American citizens (U.S.-born and naturalized), the number of working-age adults not holding a job in the second quarter of 2011 was 54.9 million, up 10.6 million from the second quarter of 2007.

  • More than half (28.5 million) of working-age citizens not holding a job have no education beyond high school.

  • To place these numbers in perspective there are an estimated seven to eight million illegal immigrants holding jobs in the United States.

Introduction

The Obama administration announced in July that it would review the cases of some 300,000 illegal aliens currently in deportation proceedings — and would not only stop their removal, but also allow them to apply for work authorization.1 Having announced in June that it would no longer arrest whole categories of illegal immigrants, the new policy is a way of extending the amnesty to those who had already been arrested.2 The president’s new policy seems to assume that jobs are plentiful. But all the available evidence indicates this is not the case, particularly for the young and less educated, who are the most likely to compete with illegal immigrants. Prior research indicates that illegal immigrant workers are overwhelming those with relatively little education.3

While it would be a mistake to think that every job taken by an immigrant is a job lost by a native, it would also be a mistake to imagine that allowing illegal immigrants to stay permanently in their jobs and giving many work authorization has no impact on labor market outcomes for U.S.-born workers. The findings in this analysis make clear that Americans with relatively little education have been very hard hit by the current downturn.

Unemployment (U-3 & U-6). The left side of Table 1 shows the unemployment rate for all workers using the standard U-3 measure. To be unemployed using the standard U-3 measure one has to have looked for a job in the last four weeks. Table 1 shows that unemployment varies significantly by group. Unemployment is very high for teenagers, those without a high school diploma, and young high school graduates. One of the most important findings in Table 1 is that those who are young (18 to 29) with a high school education have an unemployment rate similar to those who have not completed high school (all ages) — 20.8 versus 18.2 percent.

Another important finding is that unemployment is much higher for young and less-educated U.S.-born minorities than for the population as a whole. For example, U-3 unemployment is 33.9 percent for U.S.-born blacks (all ages) who have not completed high school, much higher than for all natives without a high school education. For young blacks (18 to 29) who have completed high school, unemployment is also much higher than for U.S.-born workers in general with the same education. Unemployment for U.S.-born Hispanics generally also is somewhat higher than for the U.S.-born overall with the same education.

The right side of Table 1 shows unemployment using the broader measure (referred to as U-6), which includes those who want to work, but have not looked recently, and those forced to work part-time. (The Methods section at the end of this report summarizes how U-3 and U-6 are calculated.) The broader measure of unemployment shows things are very bleak for American workers. For U.S.-born workers without a high school education, U-6 unemployment is 32.4 percent, compared to 20.8 percent for U-3 unemployment. For young (18 to 29) high school graduates, the U-6 measure is 31.8 percent compared to 18.2 percent using the U-3 measure.

The U-6 measure shows things are very bad for U.S.-born minorities. For U.S.-born Hispanics without a high school education and young high school graduates, U-6 unemployment is more than 30 percent for both groups. For U.S.-born blacks the situation is even worse. These young and less-educated workers are the ones most likely to compete with illegal immigrants for jobs. And they are the ones most likely to benefit from having fewer illegal immigrants in the country.

Not Working. The U-3 and U-6 measures both deal with those who express some interest in working. Some of those included in the U-6 measure are considered to be outside of the labor force because they have not looked for a job in the last four weeks. Thus, if someone has not looked recently for a job and has given up entirely looking for work, then he or she would not be part of the U-3 or even the U-6 measure of unemployment. The right side of Table 2 reports the share of working-age adults (18 to 65) not in the labor force. It also shows the number holding a job. Table 2 shows that the number of U.S.-born working-age adults (18 to 65) not working (the unemployed plus those not in the labor force) was 51.2 million in the second quarter of 2011, up 9.7 million compared to the second quarter of 2007, before the recession began. (Table 4 shows the same for the second quarter of 2007.)

If we consider all American citizens (U.S.-born and naturalized), the number of working-age adults not holding a job in the second quarter of 2011 was 54.9 million, up 10.6 million from the second quarter of 2007. More than half (28.5 million) of the working-age citizens not holding a job have no education beyond high school. To place these numbers in perspective, there are an estimated seven to eight million illegal immigrants holding jobs in the United States.

If we look at less-educated American citizens overall — those with only a high school education or less — Table 4 shows that in the second quarter of 2007, before the recession, 65.9 percent of working-age citizens were employed. This means one in three were not working even before the recession. So even before the current economic downturn, there were a very large number of less-educated Americans not holding a job. By 2011, just 59.1 percent of these less-educated American citizens held a job. If the same percentage of less educated citizens were working in 2011 as in 2007, 4.7 million more Americans would be working. What was a very large number of available less-educated workers in 2007 has become truly enormous by 2011. Thus there would seem to be a huge supply of less-educated workers available if we encourage illegal immigrants to return home.

Conclusion

It is difficult to overstate the size of the pool of potential workers that now exists in the United States. If, through enforcement, a large 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. Of course, employers might have to pay more, and offer better benefits and working condition in order to attract American citizens. But improving the living standards and bargaining power of the least-educated and poorest American workers can be seen as a desirable social outcome. The bottom line is that any argument that there is a shortage of labor to fill jobs requiring relatively little education and that the solution is to allow illegal immigrants to stay in the country seems entirely inconsistent with the available evidence.

Methodology

The data for the tables in this study come from the public-use files of the April, May, and June 2011 Current Population Surveys (CPS), which are collected monthly by the Census Bureau for the Bureau of Labor Statistics (BLS). This is the most recent public-use data that has been released by the BLS. Each CPS includes about 131,000 respondents, roughly half of whom are in the labor force. The tables presented here are reported by quarter. Quarterly data are more statistically robust, especially for smaller populations like immigrants and minorities due to the inclusion of three months of data. Persons in institutions like prisons or nursing homes are not included in the CPS. 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. The figures in this analysis are seasonally unadjusted. Unadjusted figures are computationally simpler and easier for other researchers to replicate. In general, BLS does not provide separate estimates for the foreign-born (immigrants) and the native-born broken down by characteristics like education, race, and age. However, all CPS respondents are asked these questions. The Census Bureau defines the foreign-born as persons who are not U.S. citizens at birth, which includes naturalized citizens, legal immigrants who are not citizens (green card holders), temporary visitors and workers, and illegal immigrants. All figures for the total U.S. population (age 16-plus) in the tables match those from the BLS for seasonally unadjusted numbers.

Defining Unemployment. The standard measure of unemployment, referred 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. Those not actively looking for a job are not included in either the numerator or denominator when calculating the standard or U-3 unemployment rate.

The broader measure of unemployment referred to as U-6 is calculated differently. It divides the sum of the unemployed population, involuntary part-time workers, and marginally attached people (discouraged and other) by the civilian labor force (employed and unemployed), plus marginally attached workers. The column headings in Tables 1 and 3 show this calculation. 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 and are available for jobs, and they have looked for work in the past 12 months.4 However, they are not considered unemployed 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. They want and are available for full-time work, but must instead settle for part-time hours.5 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 the broadest possible measure of problems in the U.S. work force.


End Notes

1 See “Republicans Decry DHS Deportation Review as Amnesty”, www.foxnews.com/politics/2011/08/19/republicans-decry-dhs-deportation-re....

2 http://www.scribd.com/doc/58465866/Prosecutorial-Discretion-Morton-Secon....

3 The Pew Hispanic Center has estimated that 74 percent of illegal immigrants (25 to 64) have no more than a high school education and 46 percent of legal immigrants in the same age group also have no education beyond high school. See Figure 16 in “A Portrait of Unauthorized Immigrants in the United States”, at http://pewhispanic.org/files/reports/107.pdf.

4 Marginally attached workers indicate that they have 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.” (The variable in the CPS used to determine this population is pemlr). Discouraged workers provide a reason related to the market conditions for why they are not currently looking for a job. The second group of marginally attached workers indicate that they are conditionally interested in finding work and are referred to as “other marginally attached workers.” (The variable in the CPS used to determine this population is prdisc). 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.

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