An analysis by the Center for Immigration Studies of the Bureau of Labor Statistics Current Population Survey (CPS) shows that while the official unemployment rate of both the native-born and immigrants has fallen significantly, it remains higher than before Covid. However, the unemployed only includes those who have actively looked for a job in the prior four weeks. It does not include the tens of millions of people who are not in the labor force. The labor force participation rate — the share of working-age (16-64) people holding a job or looking for one — was lower in the third quarter of 2021 than in the same quarter of 2019, when employment peaked before Covid. But perhaps most important, the peak in 2019 was still lower than the prior peak in 2007, before the Great Recession, which was still lower than the peak in 2000. This long-term decline in labor force participation has hit both immigrants and natives without a bachelor’s degree the hardest. Immigrants (legal and illegal together) are often referred to as the "foreign-born".
Among the findings:
- The unemployment rate for native-born Americans (ages 16-plus) was 5.2 percent in the third quarter, a good deal higher than the 3.9 percent in the third quarter of 2019 before Covid-19. Among immigrants (legal and illegal together), the rate was 5.1 percent, higher than the 2.9 percent in the third quarter of 2019. (Tables 2, 7, and 8)
- In the third quarter, seven million natives and 1.4 million immigrants were unemployed, both still much higher than in the third quarter of 2019, though much lower than at the height of the Covid epidemic in 2020. (Tables 2, 7, and 8)
- In addition to the unemployed, 44.9 million working-age (16-64) native-born Americans and 8.9 million immigrants were out of the labor force in the third quarter — neither working nor looking for work. (Tables 1, 7, and 8)
- Combined, 62.2 million natives and immigrants were not working in the third quarter of 2021 — unemployed or out of the labor force — 3.4 million more than in the third quarter of 2019.1 (Tables 7 and 8)
- The huge number of working-age people not working is a clear indication that there is a large pool of potential labor for employers to draw upon to fill vacant positions.
Among the less-educated:
- The unemployment rate for native-born Americans without a bachelor's degree was 6.4 percent in the third quarter, compared to 3.2 percent for those with at least a bachelor's. Among immigrants, 5.8 percent without a bachelor's degree were unemployed, compared to 3.8 percent with at least a bachelor's. (Table 7)
- The Covid-19 shutdown has exacerbated the long-term decline in the labor force participation rate (share working or looking for work) of the less-educated. Looking at the third quarter of 2021, only 70.5 percent of working-age (18-64) natives without a bachelor's degree were in the labor force, down from 72 percent in 2019 (before Covid), 74.6 percent in 2007, and 76.6 percent in 2000. (Figure 1 and Tables 7 to 10)
- Among the native-born, those without a college degree comprise less than two-thirds of the population 18 to 64, but account for more than three-fourths of those not working — unemployed or not in the labor force. (Table 7)
- The labor force participation rate for less-educated U.S.-born Blacks looks much worse than for other groups. U.S.-born Blacks without a bachelor’s degree have a labor force participation rate of only 66.6 percent, compared to 71.7 percent for U.S.-born whites and 71.6 percent for U.S.-born Hispanics. (Table 7)
Data and Methods
This report uses the public-use files of the Current Population Survey (CPS) from the third quarter (July, August, and September) of each year 2000 to 2021 to examine the employment situation in the United States, with particular attention paid to differences between immigrants and natives. Based on a monthly survey of 60,000 households, the CPS is the nation's primary source for the unemployment rate and other labor force statistics. The sample is weighted to reflect the actual size and demographic makeup of the civilian non-institutionalized population. The raw data used in this analysis comes directly from the Census Bureau’s website, which collects the data for the Bureau of Labor Statistics (BLS).
Key Concepts and Terms. The labor force includes all workers, plus those who are not working but have actively looked for work in the four weeks prior to the survey. There are three measures of labor force attachment used in this analysis. First, we report statistics using the standard unemployment rate, referred to by the BLS as the U-3 rate. It is calculated by dividing the number of people actively looking for work by the number in the labor force (working or looking). Second, there is the labor force participation rate, which is the share of people in the labor force, often confined to a particular age group such as 16 to 64. It is calculated by taking the share working or looking for work and dividing it by all persons in the age group of interest. Third, there is the share of the population that is employed, which is referred to as the employment rate. It reflects the share of the population that is working divided by all persons (working and not working) in the age group of interest.
Definition of Immigrant. The foreign-born in the CPS are all persons who were not U.S. citizens at birth. They include naturalized citizens, permanent residents (green card holders), temporary visitors, guestworkers, and illegal aliens. We use the term "immigrant" to encompass all of these foreign-born individuals.
Matching Published BLS Tables. In this report, all statistics covering the entire population, such as the unemployment rate, match those published by the BLS. However, the counts and percentages for sub-populations will in some cases be slightly different. The reason is that the Census Bureau adds "perturbations" to the public-use microdata to protect respondent confidentiality. Fortunately, the Census Bureau states that any differences between published figures and those calculated from the public-use data will be so small that they "fall well within the sampling variability associated with CPS estimates". In other words, there should be no meaningful difference between statistics calculated from the pubic-use data and those published by the BLS.
Finally, the figures in this report are not seasonally adjusted. Unadjusted figures are conceptually simpler and easier for other researchers to replicate. Also, the limited number of statistics on the foreign-born published in the BLS monthly "Employment Situation" (Table A-7) reports are, like those reported here, not seasonally adjusted. Finally, comparing the third quarter of each year controls for seasonal differences and provides a larger sample and more statistically robust estimates.
Potential Problems with the Data. The Bureau of Labor Statistics (BLS) reports potential problems with the CPS since March 2020 because of the Covid-19 pandemic. First, interviewers who administered the survey miscoded some respondents as employed when they were on furlough, temporary layoff, or similar situations. They should have been considered temporarily laid-off and coded as unemployed. The number unemployed and the unemployment rate would be higher in March 2020 through September 2021 if these individuals were counted as unemployed. Second, the response rates for March 2020 through September 2021 were significantly lower than prior to Covid-19, though rates have improved since hitting a low in June 2020. These lower rates increase the sampling error of the survey. However, in June 2020, when the problem was most pronounced, BLS stated that “Although the response rate was adversely affected by pandemic-related issues, BLS was still able to obtain estimates that met our standards for accuracy and reliability.”
Neither the Census Bureau, which collects the data, nor the BLS has altered the data in response to these issues. Our analysis takes the raw CPS data as provided and our results match published non-seasonally adjusted figures, with the caveats about perturbations in public-use data discussed above.
1 Following the example of the Bureau of Labor Statistics, the unemployment figures in this analysis include all persons who are actively looking for work, including a modest number over age 64, which was 463,171 in Q3 2021. The figures for those outside of the labor force include only those 16 to 64. If we focus only on those 16 to 64 who are unemployed and out of the labor force the figure would be 61.7 million.