Native and Foreign Born Labor
October 16, 2020
Due to the current employment crisis, October of 2020 at Economic no nonsense has emphasized the discussion over the labor market in "The Current Labor Market", "Labor Market Dynamics", "Distress in the Labor Market 2020", " Additional Labor Market Inequity" and "Other Labor Market Developments 2020". However, the Native and Foreign Born Populations have not yet been thoroughly studied. The purpose here is to understand the dimensions and the troubles of these two groups in the labor market context during the covid-19 recession now underway.
The source of the information is again the Bureau of Labor Statistics and the data used corresponds to September of each year on a seasonally adjusted basis. The Native and Foreign Born populations for 2018 were described in "United States Population 2018". As defined there, "The native population includes all individuals born and residing in the United States and also all of those born in Puerto Rico, U.S. Island Areas or born outside the U.S. to a U.S. citizen parent and who subsequently moved to the United States".
Graph 1 shows the evolution of both populations (bottom-left panel) since 2007, first year when this series is available. While the Native grew by an average of 0.9% per year between 2007 and 2013 the Foreign Born did by 1.3%. The panel also reveals how during difficult times this latter population segment tends to contract. In effect, right after the Great Recession between 2008 and 2009 it experienced a decrease of 0.2 million. The current contraction started in 2019 with a reduction of close to 0.4 million to accelerate in September of 2020 to a decline of close to 0.9 million, for a total of 1.3 million equivalent to a 3% fall with respect to 2018 which would be comparable to a 7 million drop on the Native population. The questions are whether this is a permanent or a temporary reduction and whether this negative trend will continue.
Similar to the Native, the Foreign Born population is a highly diverse group. It consists of people of all races, religious orientations, income and education levels, many of whom have acquired U.S. citizenship. The age distribution is however different as it includes relatively fewer children or older adults. Thus, it has comparatively more workers, top-right and bottom-right panels of Graph 1, although there may be a large number of foreign students. A population decrease here is just as hurtful as one in any other group because they all pay taxes, even sales and other taxes and fees in the cases when they are not allowed to work, and contribute to economic growth by consuming and investing.
Table 1 compares the employment situation for the Native and Foreign Born populations 16 years old or older in September of 2019 and 2020. While the Native had and overall unemployment rate of 7.5% in September of 2020 the Foreign Born population had a rate of 8.6%.
| Table 1 | |||||||||||||||||||||||||
| Labor Market (Native and Foreign Born Populations 16 years old or older) | |||||||||||||||||||||||||
| September (Numbers in millions) | |||||||||||||||||||||||||
| 2019 | 2020 | 2020 - 2019 | 2020 / 2019 | ||||||||||||||||||||||
| Native | Foreign | Native | Foreign | Native | Foreign | Native | Foreign | ||||||||||||||||||
| Indicator | Male | Female | Total | Male | Female | Total | Male | Female | Total | Male | Female | Total | Male | Female | Total | Male | Female | Total | Male | Female | Total | Male | Female | Total | |
| Total Population 16 years or older | 105.1 | 111.9 | 217.0 | 20.5 | 22.2 | 42.7 | 106.0 | 113.0 | 218.9 | 20.2 | 21.7 | 41.8 | 0.9 | 1.1 | 2.0 | -0.4 | -0.5 | -0.9 | 0.9% | 1.0% | 0.9% | -1.8% | -2.3% | -2.0% | |
| Employed | 68.3 | 62.8 | 131.1 | 15.6 | 11.8 | 27.4 | 64.5 | 58.9 | 123.4 | 14.4 | 10.1 | 24.4 | -3.8 | -3.9 | -7.7 | -1.2 | -1.7 | -3.0 | -5.6% | -6.2% | -5.9% | -7.9% | -14.7% | -10.9% | |
| Unemployed | 2.5 | 2.2 | 4.7 | 0.4 | 0.4 | 0.7 | 5.2 | 4.8 | 10.0 | 1.0 | 1.3 | 2.3 | 2.7 | 2.5 | 5.2 | 0.7 | 0.9 | 1.6 | 107.8% | 114.3% | 110.9% | 191.8% | 236.1% | 214.7% | |
| Labor Force = Employed + Unemployed | 70.8 | 65.0 | 135.8 | 15.9 | 12.2 | 28.1 | 69.7 | 63.7 | 133.4 | 15.4 | 11.3 | 26.7 | -1.1 | -1.4 | -2.5 | -0.6 | -0.8 | -1.4 | -1.6% | -2.1% | -1.8% | -3.5% | -7.0% | -5.0% | |
| Not in Labor Force | 34.3 | 46.9 | 81.1 | 4.6 | 10.0 | 14.6 | 36.3 | 49.3 | 85.6 | 4.8 | 10.3 | 15.1 | 2.0 | 2.4 | 4.4 | 0.2 | 0.3 | 0.5 | 5.9% | 5.2% | 5.5% | 4.3% | 3.4% | 3.7% | |
| Unemployment Rate = Unemployed / Labor Force | 3.6% | 3.4% | 3.5% | 2.2% | 3.1% | 2.6% | 7.5% | 7.5% | 7.5% | 6.7% | 11.2% | 8.6% | 3.9% | 4.1% | 4.0% | 4.5% | 8.1% | 6.0% | 111.1% | 118.9% | 114.7% | 202.4% | 261.2% | 231.3% | |
| Number of Jobs Lost | 4.4 | 4.5 | 8.9 | 1.0 | 1.5 | 2.4 | |||||||||||||||||||
| Jobs Lost % of Pop. 16 or older | 4.2% | 4.0% | 4.1% | 4.8% | 6.8% | 5.8% | |||||||||||||||||||
| Source: Bureau of Labor Statistics, Current Population Survey and Economic no nonsense calculations. | Note 1: Data is seasonnally adjusted by the Bureau of Labor Statistics. | Note 2: Native and Foreign Born populations 16 years old or older. | Note 3: Data corresponds to September of each year. | ||||||||||||||||||||||
Despite the 2% decline observed in 2020 among the Foreign Born, the number of jobs lost as a percentage of the population (5.8%) was higher than among the Native (4.1%). Although the unemployment rate of the Foreign Born (8.6%) is lower than the one observed in other segments the increase with respect to 2019 of 231% is the largest of any of the segments examined previously; Total, White, Non-Whites, Black and Rest. It is also the highest for both Males (202%) and Females (261%) in any of those populations.
The Foreign Born labor force also experienced the largest percentage decline (5%) partially propelled by the population reduction (2%) as observed on Table 1. The situation is particularly affecting Foreign Born Females with a labor force decline of 7%. Concerning job losses as a percentage of their own population cohort (6.8%), Foreign Born Females are also the segment most negatively impacted.
