Monday, April 6, 2015

Employment - Unemployment: 25 - 54 Age-group Still Getting Pounded.

Subjects: Unemployment, Immigration, Employment growth, Ages 25 - 54, Male, Female

I recently read a ZeroHedge article, by Tyler Durden, with a thesis on how most employment growth has been going to males, 55 years and older.  I noticed two flaws in the analysis. First, some comparisons only included the age-group 55 - 64 and other data presented includes ages 55 and over (including retirement age). Second, I did not see any consideration for the fact that many of these employed males are baby-boomers and may have aged into the 55 and over category, simply remaining employed in the same position.
(In an earlier posting, I noted that 2/3 of the 3 million net jobs created from 2000 to End of Year (EOY) 2009, were held by retirement age individuals beginning in 2010, most likely, this is a combination of aging into the age-category and choosing not to retire during recession, with some electing to return to the workforce.)
For the reasons I've stated above, I decided to look at the 25 through 54 age-group and do an Employment to Population growth sample from EOY 1999 to the present (end of month March 2015).  During this exercise, one thing that occurred to me is that this would be an opportunity to expose how meaningless the Unemployment statistic really is.

Current (March 2015) employment levels are still 691,000 below Jan. 31, 1999 levels.

In the chart above we are simply examining the aggregate growth of the BLS-CPS population growth (noninstitutionalized civilian population) with employment growth for the 25 - 54 year old age-group. I note that the population has declined by 1.05 million since 2007; considering the fact that immigration is well over 1 million per year, I presume the population decline is due to baby-boomers aging out of the category.

Unemployment vs. Not In the Labor Force: Additionally, I decided to take a look at the unemployment rates for the period and compare them to employment levels. I found two months with almost identical employment levels. In January 2009, employment was 95,921,000 and the Unemployment rate for this age-group was 7.7%.  In January 2015, employment was 95,834,000 and the Unemployment rate was 5.3%.  
Simple logic infers that a reduction of 487,000 (0.39%) in the population, with virtually the same employment levels, did not cause the Unemployment rate to be 2.4% lower. The cause for the Unemployment rate decline is that 2,705,000 fewer persons feel that seeking employment will produce any results.  
If you don't already know how this happens statistically, the search-term is "Not In the Labor Force" and there is a, freshly published, Bureau of Labor Statistics backgrounder here.

 As the ZeroHedge article article does imply, women do seem to have a tougher go than men.

Current (March 2015) female employment levels are still 679,000 below Jan. 31, 1999 levels.


In the chart for females above, I note that the 2001-02 recession caused a flat employment growth rate from 2001 until 2004.  Employment did not return to 1999 levels until 2006, and in comparison to the chart for males (below), the 2004-08 recovery for the female population did not exceed 1999 employment levels, even though this population had increased by 3 million.

Current (March 2015) male employment levels are still 11,000 below Jan. 31, 1999 levels. 
Also of interest is that the entire decline in the population for the age-group is limited to males.

For the male population, I note that the 2001-03 recession was short-lived, with employment levels 2.6 million higher that Jan. 31, 1999, 4.3 million jobs evaporated, while the population increased by 4.2 million.

About these charts: These charts are a sample of how the job-creation engine is performing over a specific period of time.  In the 25 - 54 age group, we have added 6.2 million to the population (5.25%), combined with employment level losses of 691,000 since 
Jan. 31, 1999.

My recommendation (which will fall on deaf ears):  In his wisdom, the President is hell-bent on providing permanent residency to some illegal aliens living within the United States. The problem with this plan is he gives nothing in return and does nothing to restore the employment growth economic-equilibrium.  The remedy is an immigration moratorium, this can be achieved by a decrement in the caps on legal immigration for each illegal alien that is granted status on a one to one basis.

Data:
BLS-CPS http://www.bls.gov/data/



Period ending: March, 2015

(Unadj) Population Level - 25-54 yrs. 
Total = 124,949,000
Male = 61,334,000
Female = 63,615,000

(Unadj) Employment Level - 25-54 yrs.
Total = 96,300,000
Male = 51,615,000
Female = 44,685,000

Data extracted on: April 5, 2015 (2:19:06 PM)

Friday, March 20, 2015

The Great Employment Giveaway

Subjects: H-1B visa, Immigration, Bachelors Degree, L-1 visa, O-1 visa, TN visa, Work years

Since 2000, USCIS starts the fiscal year by giving away about 1 million work-years, in advance, to skilled non-immigrant foreign workers. In the chart below, we see the actual visas granted by year; however, most of these visas do not expire yearly, the H-1B has a six year expiration, the L-1 intracompany-visa a 5 year for worker, or 7 year expiration for manager. The O-1, and TN visas are one year duration and can be extended indefinitely.


In the following chart, we see the same visas as above, combined as a group, with their expiration duration extrapolated. The work-years consistently remain at or above 1 million since the year 2000.



Generally, the skilled visas in question require a bachelors degree or equivalent, the following chart displays the yearly growth in employment levels for bachelors degrees and above, available from the BLS only in the 25 years and above age-group.  When comparing the chart above with the employment growth chart below, we see that from 2001 to 2014, has employment growth exceeded the linear of about 1 million new jobs only 6 times in those 14 years.

In 2008, employment levels for college graduates declined by 106,000.  During that same year 1.46 million non-immigrants were hired, thus, incumbent workers lost 1.56 million jobs.  In fact from 2007, to 2011, untold numbers of US workers and possibly temporary foreign workers lost million of jobs, due to the incessant importation of temporary worker.  Even though employment was growing, the flood of foreign workers made it impossible for separated workers to rejoin the workforce for several years.


  
This brings us to the data that started me wondering if there is a correlation to the addition of educated workers with worsening employment opportunities.  The chart below compares the percent of bachelor degree'd and above (again age 25 and older) with the percentage of bachelor degree'd and above within the entire civilian population.  In this data, there is no distinction between citizen workers and immigrants, but we see that around the year 2000, temporary foreign workers began to increase, while the opportunities for college graduates decreased.  Note that this is many years prior to the great recession.



Data sources:

BLS CPS
http://www.bls.gov/data/

Nonimmigrant Visas by Individual Class of Admission (e.g. A1, A2, etc.)*
http://travel.state.gov/content/visas/english/law-and-policy/statistics/non-immigrant-visas.html

Wednesday, February 25, 2015

Comparison: "Inequality for All"

Subjects: Income Inequality, Immigration

 No, I haven't seen Reich's, Inequality for All, but I did notice a similarity between his "suspension bridge" graph and the Census data for the foreign-born in the labor force, covering roughly the same period.

It appears to this layman, that income inequality peaked during the era of the robber-baron, i.e., the Great Depression and then again at the onset of the Great Recession, where the foreign-born in the labor force was in excess of 15% on both occasions.

Perhaps, the learned economists can explain why an inorganic labor supply, comprised of immigrants, does not upset the labor and wage economic-equilibrium, thereby causing the income inequality gap.

 

By percent, the lowest level of foreign-born in the labor force was in 1970 at 5.2%. This correlates with the chart provided below "Wages as Percent of GDP"  (Gross Domestic Product).

Wages as Percent of GDP
(as mass-immigration resumes in 1970, wage share declines)





Here is the teaser for the film, if you are interested...



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Friday, November 21, 2014

OPT extension to cost current STEM workers 175.5 billion in earnings

Updated: November 21, 2014

American Tech Workers Successfully Win Standing to Sue on Alleged Illegal Issuance of STEM-Related Work Authorization

Source: Link

American workers at a huge hiring disadvantage.
* Judge recognizes that OPT foreign-workers are Social Security and Medicare exempt.

The Programmers Guild and the Immigration Reform Law Institute, have been denied a preliminary injunction against the Bush administration's 17 month extension of OPT-CPT training visas for foreign graduates studying STEM coursework.

Catch up on the details here:
Judge rejects student visa injunction sought by H-1B opponents
Patrick Thibodeau: Computerworld, August 7, 2008

Here's the problem:

"Hochberg's ruling focused less on the merits of the case and more on whether H-1B opponents had legal standing to bring it, noting that they could not show they had been directly hurt by the student visa extension."

One way to demonstrate direct harm to current STEM workers would be to show the effect of the added temporary foreign workers impacting the lifespan of the STEM career.

BLS STEM Employment 2005 = 5,228,040
Avg STEM Salary 2005 = $64,560.00

U.S. citizens and permanent residents:
Bachelors Degrees Science and Engineering (S&E) awarded

1995 = 363,463
1996 = 369,927
1997 = 373,745
1998 = 375,909
1999 = missing
2000 = 383,438
2001 = 384,492
2002 = 399,288
2003 = 421,730
2004 = 436,372

Total = 3,508,364
(389,818.22 avg. per yr.)

STEM Career to replacement factor (domestic) = 13.41 years
(2005 STEM employment divided by avg. S&E (citizen and perm res.) bachelor degree production.)

Assumptions:
* Domestic bachelor's degree production will increase naturally and congruent with demand.
* Bachelor's degrees are not the minimal educational requirement for all STEM occupations, but it would only take 13.41 years of bachelor degree production to replace the entire STEM workforce.
* S&E degrees are not the only degrees relevant to STEM occupations.

Baseline:
Without additional foreign labor supply, the average US, S&E undergraduate could expect a STEM career lifespan of 13.41 years, before being replaced by a domestic candidate with an updated degree. 

Source data: Institute of International Education

Nonresident aliens:
Bachelors Science and Engineering 
(S&E) awarded
1995 = 14,685
1996 = 14,747
1997 = 14,737
1998 = 14,709
1999 = missing
2000 = 15184
2001 = 15,714
2002 = 16,323
2003 = 17,704
2004 = 18,606

Total 142,409
(15,823.22 avg per yr.)

STEM Career to replacement factor (domestic & foreign grads) = 12.89 years
(2005 STEM employment divided by avg. S&E (citizen and perm res. plus nonresident alien) bachelor degree production.)

Lost career lifespan caused by retaining foreign S&E graduates via temp. visas = 0.52 years

Dollar impact to each current STEM worker = $33,571.20

Effect:
The effect of modifying immigration policy, with intent to retain all foreign S&E graduates in the tax subsidized OPT visa (Social Security and Medicare exempt), combined with the H-1B visa, which includes unlimited extensions (beyond the 6 year limitation) for Permanent Residency applicants,  is extremely detrimental to the competitiveness of the citizen and permanent residents.

Extending the OPT visa an additional 17 months, with CPT provisions for STEM students, ensures that a higher percentage of foreign-students will fall into the temporary-worker loophole, and that foreign-students will enjoy a hiring preference while transitioning from working-student status, to H-1B.    

Total lost earnings to citizen and perm res. STEM workforce = $175,511,576,448.00
(Employed STEM earnings lost in career lifespan, shortened by .52 years)

Source:
STEM Bachelor degree data
http://www.nsf.gov/statistics/nsf07308/tables/tab4.xls

STEM Employment data
http://www.bls.gov/opub/ooq/2007/spring/art04.pdf

Details on OPT - CPT status
http://www.ice.gov/sevis/practical-training

Source data for chart:
Institute of International Education