Recession Reverses Jobs Trend: Immigrants Hit Harder By Downturn Than Native-Born Americans

Protest by the Tea Parties "against amnesty and illegal immigration" in St. Paul, Nov.14, 2009 - Photo: Fibonacci Blue/Flickr

Protest by the Tea Parties "against amnesty and illegal immigration" in St. Paul, Nov.14, 2009. (Photo: Fibonacci Blue/Flickr)

At a time when unemployment is at its highest level since the early 1980s, the upcoming immigration debate is clearly going to center on economic issues. On Wednesday, the Migration Policy Institute waded into the discussion with the release of a report saying that in the current economic crisis immigrants are being hit harder in the job market than native-born Americans.

According to the report by the Washington-based think tank, the current recession has reversed a trend dating back to the mid 1990s in which immigrants performed better than the native-born in terms of employment.

The authors, Federal Reserve Bank of Dallas senior economist Pia Orrenius and Agnes Scott College Economics Professor Madeline Zavodny, analyzed employment patterns for the last 15 years, “showing that immigrant economic outcomes began deteriorating before the current recession officially began in December 2007,” MPI said in a press release. [The report is here in pdf.]

The report says the immigrant population started facing a harsher employment climate with the decline in the housing market that began in the spring of 2006.

“As residential construction employment slumped, the immigrant unemployment rate began rising toward the end of 2006, and immigrants since have recorded higher unemployment rates and bigger declines in employment than native-born workers,” according to the press release.

“Despite the longer-term trend of rising employment and falling unemployment rates for foreign-born workers, the current recession offers new evidence that economic outcomes for immigrants in the short run are more strongly tied to the business cycle than for natives,” Orrenius said.

The recession started affecting immigrants when they were at their employment peak in the 15-year period studied by the authors. They found that “the immigrant employment rate peaked at 66 percent in 2007, compared to about 63 percent for natives.” At that time, the immigrant jobless rate was also below that of natives, hitting its lowest point in 2006, when it was 3.4% compared to 4.5% for the latter.

However, by the first quarter of this year, “the unemployment rate for immigrants stood at 9.2% and their employment rate had dropped by 4.6 percentage points from two years earlier. This compares to 7.8 percent unemployment and a 2.6 percentage point drop in employment rates for native workers in the same period.”

One of the likely points of controversy once an immigration bill starts being debated in Congress possibly early next year is whether a broad guest-worker program should be created that will respond to the American economy’s need for workers by increasing or decreasing the number of foreigners allowed to enter the country to work.

MPI President Demetrios Papademetriou says the report’s findings show that the immigration system needs to respond to the economy’s condition.

“These findings offer further evidence that policymakers should consider creating a more flexible immigration system that would allow employment-based immigration flows to track the economy more closely, rising in times of expansion and falling during recessions,” he said.

MPI is in favor of creating a commission of economists, demographers, and social scientists that will make recommendations to the president on how to adjust migration flows. Such an idea was mentioned by Homeland Security Secretary Janet Napolitano last week in a speech where she reaffirmed the Obama administration’s commitment to push immigration reform in Congress next year.

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