The Immigrant Sheetrocker Effect

The street-level consequence of a 12.5% foreign-labor incursion into an unsophisticated labor market causes a 23.4% income loss for natives.
 
Hanging sheetrock (drywall) appears to be a job that anybody could do, until you actually try it.  The weight of 5/8 inch sheetrock is 2.3 lbs per square foot, or 110.4 lbs per 12 fo0t sheet.  Done properly, the ceiling is first, most rooms require full sheets, each sheet is balanced on your head while you and your partner struggle to get a few nails (requires both hands) into the sheet.  You can nail the sheet if the measurements are correct and the sheet did not get damaged in the process, in which case you start with a new sheet.  Many homeowners will try to save money doing their own sheetrock, but when they find out how proficient professional sheetrock crews are, and how little money they saved trying to do it themselves, most people never want to hang a piece of sheetrock again.

Sheetrock installers are very proficient and  there are hundreds of tricks of the trade.  “Rocking” is almost never an hourly job because the work is so strenuous, your arms are above you head much of the time, which is seriously painful until you get used to it.  Sheet-rockers take jobs on a per-foot basis to stay motivated and profit from their proficiency. There is generally a set minimum per foot price that is upheld throughout the regional market to ensure that this proficiency does not become a liability to himself and his vocation. 

There is an economic equilibrium that most construction markets will fall into, a certain amount of builders will require a certain amount of completions per year, roughly the same number of homeowners will do additions;  therefore, the demand for sheetrock hanging stays relatively static, unless the supply of sheet-rockers increases.  An increase in labor supply can be a hardship, but if the market rate is upheld, everyone adjusts their lifestyle accordingly and there is no hard feelings – it’s just a fact of life.

A problem occurs when there is an incursion of foreign-labor, generally illegal labor and therefore indentured, generally having complete disregard for the per-foot minimum status quo. Having no ties to the community, their only interest is improving life for themselves, bringing in more relatives to the US and “buying” into the market with lower per-foot prices.

The Migration Metric

We are a nation of immigrants!

We are also a nation that burned coal for home heating and continues to burn coal for electricity.  Just because we have “always” practiced something, does that mean we should continue to do it? Even after we have identified that the practice has problems?

Our open door immigration policy has created a “Catch 22” problem, spiraling housing costs, and the subsequent salary-requirement to service housing costs, have made the United States an unattractive destination for employment creation.  Immigrant competition for employment stagnates wages (as the US dollar devalues) and immigrants compete for housing, causing “sticky” rental housing rates, which reverberate throughout the housing industry.

The following tables demonstrate employment growth by presidential term since 1976. 

“Sample Population” is our control group, which references growth in persons that can only come from native births, or immigration.  The Migration Metric clearly shows that the immigration subsidy affecting labor and housing must be curtailed.

Jimmy Carter Served 1977–1981

Ronald Reagan Served 1981-1989

George H. W. Bush Served 1989–1993

Bill Clinton Served 1993–2001

George W. Bush Served 2001–2009

Barack Obama Served 2009 – Present

Data: January 2009 to June 2012

With only 11% of the added population counted as  entering the Labor Force, and only 24.6% of that new Labor Force finding employment, shouldn’t we stop “burning” our citizens with mass-immigration policy?

Addendum:
There seems to be some confusion about the Obama era and baby-boomers aging out of the work force. 

Through May 2012, the population growth for those 65 and over, grew by 3,924,000.  If we deduct this population from the “Sample”, we would also have to deduct the employment growth in the 65 and over age-group.  Deducting those  1,170,000  jobs from the “Sample” would put the Obama Presidential term employment growth at roughly –900,000 for those under age 65.

Source Data:
BLS  “Labor Force Statistics from the Current Population Survey”
Series title:         (Seas) Population Level -- Series Id:           LNS10000000
Series title:        (Seas) Civilian Labor Force Level -- Series Id:           LNS11000000
Series title:        (Seas) Employment Level -- Series Id:           LNS12000000
Data extracted on: July 6, 2012 (2:22:28 PM)

Underpayment of H-1B Wages?

Masters degreed H-1B employees earned $400.00 less than those with Bachelors degrees.  These are significant populations of H-1B temporary immigrants, with over 20,000 Masters degrees and over 30,000 bachelors degrees in 2006.


There is still some argument as to the practice of under-paying H-1B workers in Computer-related occupations. Does it exist? Is it pervasive? The following quote is a complicated way of saying 51% of H-1B are in Computer related occupations.

"In 2006, 51% of new H-1B recipients were in computer-related occupations, including 48% in the United States Citizenship and Immigration Services occupational category of "occupations in systems analysis and programming," which includes many occupations, such as computer scientist, and technician occupations, such as programmer." http://www.nsf.gov/statistics/seind08/c3/tt03-29.htm

The most recent H-1B salary information (I'm aware of) is 2006 data from Homeland Security...


Average annual salary of new recipients of H-1B temporary work visas, by occupation and degree:

H-1B Salaries in Computer-related occupations:

All degree levels = 56,200.00


Bachelor's = 56,000.00
Master's = 55,600.00
Professional = 71,200.00
Doctorate = 80,400.00

SOURCE: Department of Homeland Security, U.S. Citizenship and Immigration Services, special tabulations. http://www.nsf.gov/statistics/seind08/c3/tt03-29.htm

Oddly, we have Masters degree holder earning less than those with Bachelor's degrees.

For comparison, to H-1B salaries I've taken the published Mean Annual wage and created an average mean from all occupations within the BLS-OES 15-1000 Computer Specialists SOC classification. SOC 15-1000 (link) is identical to the DOT classified Computer related occupations (link)

Avg. Mean Annual Salary 2006:

15-1000 Computer Specialists = $69,123.42
Total Employment 2006 = 2,969,510
Total Mean Annual in Dollars = $205,262,675,900.00
http://www.bls.gov/oes/2006/may/oes150000.htm

Looking back at the H-1B salaries, we see that those H-1Bs with a Master's degree were paid $400.00 less than H-1Bs with Bachelor's degrees. I did the math in an earlier blog which puts the H-1B group (Computer related) with Master's degrees at 25,490 and the Bachelors degrees at 31,862 -- these populations are significant.


BLS Annual Salary 2006:
15-1000 Computer Specialists = $69,123.42 (Avg. Mean all degree levels)

H-1B Computer Specialist = $56,200.00 (Avg. all degree levels)

H-1B Underpayment = $12,923.42

(Yes, I comparing a Avg. Mean to an Average -- perhaps a couple dollars difference?)

Let's assume for a moment that business and government are interested in controlling the salaries of Computer Specialists. Assume, the method is importing lower paid specialists and the target salary is (the H-1B salary) $56,200.00.

This creates a circular problem for the government, the 2006 taxable gross wages for the occupation was $205 Billion. Reducing the salaries to $56,200.00 will reduce the tax base by $38 Billion. Of course to remedy this loss, the government will need to authorize 682,851 computer related visas (23% of the occupation) to recover from the tax loss -- that is "if" everyone else is retained. There is no telling how many foreclosures increasing immigration will cause in our zero growth economy.

Additionally, most of that $38 Billion was disposable income the lubricant for the economy.


2006, 15-1000 Computer Specialists ___ Employed ___ Mean Annual

Computer and Information Scientists, Research 27,650 ___ $96,440
Computer Programmers 396,020 ___ $69,500
Computer Software Engineers, Applications 472,520 ___ $82,000
Computer Software Engineers, Systems Software 329,060 ___ $87,250
Computer Support Specialists 514,460 ___ $44,350
Computer Systems Analysts 446,460 ___ $72,230
Database Administrators 109,840 ___ $67,460
Network and Computer Systems Administrators 289,520 ___ $65,260
Network Systems and Data Communications Analysts 203,710 ___ $67,460
Computer Specialists, All Other 180,270 ___ $69,370