The "Illegal Immigrant" Recovery? The Real Stunner In The Jobs Report

Tyler Durden's picture

Traditionally, when it comes to job numbers reported by the BLS's Establishment (the source of the monthly nonfarm payrolls change) and Household (the source of the monthly unemployment rate data) surveys, there is a substantial discrepancy. However, in May's far stronger than expected report, the two for the first time were almost identical: the Establishment Survey reported an increase of 280K jobs, while according to the Household survey 272K jobs were added.

Impressive numbers in a month in which only 215K jobs were expected to be added.

There were the usual kinks, of course. Two thirds of all jobs, according to the Establishment survey, were low-paying, low-quality jobs, primarily teachers, retail, temp help and waiters (something even CNBC has been forced to acknowledge):


This has been the case throughout the recovery, and helps explain why while wage growth while barely rising for all workers, remains depressed and even negative inr eal terms for production and non-supervisory workers, which account for 83% of all US employment.


There were other curiosities: the vast majority of jobs added in May, over 200K, were in the 20-24 age group, and the number of self-employed workers mysteriously soared by 350K to 10 million.

But the biggest surprise came from Table 7, where the BLS reveals the number of "foreign born workers" used in the Household survey. In May, this number increased to 25.098 million, the second highest in history, a monthly jump of 279K.


Assuming, the Household and Establishment surveys were congruent, this would mean that there was just 1K native-born workers added in May of the total 280K jobs added.

Alternatively, assuming the series, which is not seasonally adjusted, was indicative of seasonally adjusted data, then the 272K increase in total Household Survey civilian employment in May would imply a decline of 7K native-born workers offset by the increase of 279K "foreign borns."

But while all of these comparisons are apples to oranges, using the BLS' own Native-Born series, also presented on an unadjusted basis, we find the following stunner: since the start of the Second Great Depression, the US has added 2.3 million "foreign-born" workers, offset by just 727K "native-born".


This means that the "recovery" has almost entirely benefited foreign-born workers, to the tune fo 3 to 1 relative to native-born Americans!


How does the BLS determine a foreign-born worker? This is its definition:

The foreign born are persons who reside in the United States but who were born outside the country or one of its outlying areas to parents who were not U.S. citizens. The foreign born include legally-admitted immigrants, refugees, temporary residents such as students and temporary workers, and undocumented immigrants. The survey data, however, do not separately identify the numbers of persons in these categories.

In other words, the "foreign-born" catogory includes both legal and illegal immigrants unfortunately, the BLS is unable, or unwilling, to distinguish between the two.

As a result, it may well be, that the surprise answer why America's labor productivity (which recently posted its worst 6 month stretch in 22 years) has plummeted in recent years and certainly months, confounding economists who are unable to explain why "solid" labor growth does not translate into just as solid GDP growth...


... and why wage growth has gone precisely nowhere, is because the vast majority of all jobs since December 2007, or 75% to be specific, have gone to foreign-born workers, a verifiable fact. What is unknown is how many of these millions of "foreign-born" jobs have gone to illegal immigrant who are perfectly willing to work hard, and yet whose wage bargaining power is absolutely nil (after all they are happy just to have a job) thereby leading to depressed wages for native-born workers in comparable jobs, resulting in wage growth which over the past 8 years has been non-existant.

Incidentally, this is the same lack of wage growth which has allowed the Fed to pump some $4 trillion into the stock market. Because far more than merely a domestic politics issues, the lack of wage growth and downstream inflation, is precisely what has permitted the Fed to maintain QE as long as it has.

In other words, how many illegal workers cross the US border, may be the biggest variable shaping US monetary polic at the moment! And, in thought-experiment land, the more porous US immigration policy the longer the Fed will be allowed to maintain its ZIRP/QE experiment, and the higher the S&P will rise.

Could it be that illegal immigration is the best friend of that 0.1% of the US population which has benefited exclusively from the Fed's relentless injection of liquidity into risk assets via either ZIRP of QE?

Note: this article is not meant to side on either side of the illegal immigration debate: the upcoming presidential elections will do enough of that. It merely seeks to fill a gaping hole in economist models which are unable to explain or rationalize why America's seemingly "booming" jobs recovery, which is "firing on all fours" according to the BLS, is not manifesting itself in either inflationary pressures, or broad economic productivity.

Source: Native-born workers; Foreign-born workers

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
thunderchief's picture

Why not 500K or higher while they're cooking the numbers?

There is no limit to bullshit, until someone throws is the bullshit flag.

BullyBearish's picture

A playbook to destroy America:

--Control media and thought

--Control legal system

--Control government

--Make drugs, pornography, unhealthy food readily available

--Attack traditional values

--Control citizens through debt and fear of police

--Work to negate the 2nd Amendment

--Put people in power that exemplify corruption

--Open up the borders to further diminish opportunity for citizens

--Sell America's resources abroad and pocket the profits

--Enter into secret trade deals that further diminish opportunity for citizens

--Allow another country to exercise sovereignty over America

--Destroy the currency

TheGreatRecovery's picture

Yes for everything but "drugs".  George Washington grew cannabis.  Samuel Adams made beer.  Andrew Jackson probably used a morphine-based medicine in his later years, to deal with the pain of so many injuries, including that bullet he carried inside from the dueling match.

El Crusty's picture

the drugs part of his list directly ties into the 1st and second points of his list. make recreational drug illegal so the government can use that as an excuse to generate even more revenue from the criminal "justice" system.

palmereldritch's picture

Not to mention Madison's furtive ecstasy fueled raves....

Oh...and how the Continental Army exchanged cocaine for muskets along the Potomac....epic history!

Nexus789's picture

I would add de-skill and reduce educational attainment. It is obvious that all the new jobs are low skill, low pay and service orientated.

RichardParker's picture


--Allow corporations to exercise sovereignty over America


There, fixed it for you.

Counterpunch's picture

I think he meant the nation state of Israel....  corporations have too much power and influence but are ultimately subject to US law.


Israel is not.  Israel doesn't even need to adhere to conditions of their UN membership, UN resolutions, or international law.


They're said to be g0d's chosen in a book they wrote so, you know, open and shut case.... 

BoPeople's picture

Yes, they are supposedly tearing down the US so that they can make a global system.

However, they are going well beyond what is necessary ... and this was all planned back in the 1950s.

It is destruction and corruption for it own sake and all of the rich and powerful have joined Satan's team... many, possibly not realizing exactly what they have done. We all have to make a choice at some point and that choice determines our future.

neidermeyer's picture

Illegals are not Obamacare eligible and therefore cost far less... This is intentional.

Vin's picture

@ Neidemeyer:  HAHAHAHAHAHAHAHA!  Right.

Super Hans's picture

Go to your local county dfacs or whatever you call it and you will see.  I  live int the black belt, and if you removed all blacks and whites from their office waiting rooms you would have 2/3's mexican or whatever waiting to be served. This is a fact.



RichardParker's picture


Good news!

"It's creative workaround of the ACA restrictions because the states are not using federal funds for the programs..."

Cognitive Dissonance's picture

It just doesn't get any better than this.........and never will.

disabledvet's picture

"You just can't get there from here."

sudzee's picture

Seems that mickey mouse would agree this is good policy.

Sudden Debt's picture

another thing OBAMA CHANGED for y’all!


You can put that on a bumpersticker!

sudzee's picture


Anything for money. Amazon promoting ISIS propaganda.

chunga's picture

Amerikans need not apply.

THE 4th Quadrant's picture

IBM says they need more Indians because of lazy 'stingy' Americans.

Sudden Debt's picture

But must dominate Inglish speaking good!

NoPension's picture

Let IBM move their corporate HQ to India.

McRocket's picture

Very nicely done Zerohedge.

Cautionary Tale's picture

Since you're a fan... Food Trucks bitchez! (let's see how mileage I get out of that).

Cautionary Tale's picture

I got ZERO mileage... Which PROVES to me that this fucking place is out of touch...

JuliaS's picture

During the market peak of 2008 I remember watching this:

F0ster's picture


This is why I read ZH and punch my computer in the face when/if Bloomberg accidentally loads.

q99x2's picture

So much for my idea that robots were spreading the wealth among the population. Instead it is simply more eaters, breeders and terrorists sneaking in under the cover of Obama.

Joebloinvestor's picture

Prostitution, drug dealing and illegal immigrants.

They skew reporting to whatever side they want to favor.

Taking their cues from climate change.

Getting to the point you can't trust or believe in any declaration. 

henry chucho's picture

"Chinga la grande puta,Los Estados Mariposas de Amerika..Viva Mexico!"

Prober's picture

You should all say prayers of thanks every day that I am not the USA's commander in chief.

Rentier88's picture

AKA known as low paying shit jobs added.

whoopsing's picture

It's as if the PTB are trying to destroy the middle - class or something

jmeyer's picture

The USA is rapidly changing in to a rainbow land, a new land of opportunity to which the world can emigrate leaving their often horrific living conditions for the new land.

But this, along with retiring boomers and poor US core growth combines to form a DEFLATION. This is the defense that Bernanke spoke about last week when he said the Fed

isn't responsible for what is happening, effectively leaving the gov't holding the hot potatoe. So what will happen ? After the crunch we all know will occur we'll elect another set of immoral and incompetent

politicians and start the whole cycle all over again.

jmeyer's picture

Somehow my comment was posted twice. That shows just how important it is : )

Lin S's picture

Had to downvote you for the puerile "crunch" reference. John Wesley Rawles childish novel is your source.

Don't outsource your thinking, especially to a 60-IQ moron such as Rawles.

JuliaS's picture

When blaming immigrants for drawing on our services, what is ignored is that the countries they came from invested their wealth into getting them to the point where they are productive and employable. They've raised them, fed them, supplied education and we got the finished product - a mature person ready to work from day 1 they set foot in the country. And that is somehow not considered a benefit to us? Bullshit! Also, I've worked with both, locals and foreigners. I find that the foreigners have better work ethics. For them more is at stake. They don't have safety nets, no grandmas and grandpas to fall back onto. Most of the time they're the ones earning money to support the entire family. They slip up and out of the country they go. So for them more's at stake compared to mommy and daddy's basement dwellers. I'd hire a foreigner over a local any day of the week, even if I had to pay more. They make better workers, provided they can speak the language. There are plenty of those whom I would not hire due to their inability to communicate. Those people I would personally escort out of the country until they learn English.

Then again, if one of those non-English speakers was responsible for taking your job (I side with Doug Stanhope on this) I'd be embarassed! If he's better qualified for your job, then you're a fucking loser, unless you received your job training in pantomime.

Oldwood's picture

Stated as a person who has not yet had their job taken by a person who is willing to do it for less pay.

I used to think like you. I have worked with illegals for forty years and always felt that anyone who was willing to work should be given the chance, but I was wrong. I did not understand economics. I did not understand supply and demand and the fact that a limitless influx of labor would forever drive wages down. The thing is, while it has been occurring pretty much continuously the thing that has really make it happen is the repeated recessions. With each recession we see displaced workers, who being jobless, seek out alternative employment, while receiving unemployment benefits. Employers seeking new employees with the first signs of recovery hire the lowest cost alternatives...illegals. The standing supply of available labor drives rates down. While this oversupply of labor would impose downward pressure on wages by itself, employers would not be nearly as active in replacing higher wage people with lower ones. But these cycles create an easy means of rachetting them down.

Ultimately, to hire illegals, is no different than to buy cheap imports. To do so for any period of time virtually guaranties our jobs will be replaced or eliminated.

JuliaS's picture

If you're a good worked providing sensible service for a good price - you'll have work. If someone can do your work better for less, he deserves to do it. It's a matter of input vs. output. Someone who does work for less is of greater net benefit, but if it hurts your way of life... well, drop some of your needs then. Adapt. US invades counties, ruins their economies via it's trans-nationals. It's only fair that the countries we destroy do some invading of your own. You take away their jobs, they'll take yours. Also, when you send countless troops to "defend" your country around the world instead of back home, don't whine when hundreds can walk across the border barefoot on daily basis. You asked for it, you got it, so quit whining.

Do work that people are willing to pay money for or get out of the way. Don't like employer policies? Work for yourself. Don't like politicians? Vote them out? Can't vote them out? Throw them out. How much have you done to fix your situation?

I tell you what I did to fix my position. I learned 5 languages, after getting a college diploma I mastered 2 more professions on my own. I don't buy shit I don't need, so that I don't run out of money. I maintain good relationships with people, employers, co-workers and subordinates. Many Americans are used to opening their mouths and having food fall into it from out of the sky. They're used to getting a lot for doing little. I'm talking modern Americans. The further back into the past, the better work ethics you'll discover. But we're here now, this is how things are. Get used to it.

RichardParker's picture

Don't like politicians? Vote them out?

Only to replace them with another set of disingenous sociopaths...

 "The oppressed are allowed once every few years to decide which particular representatives of the oppressing class are to represent and repress them."
-Karl Marx

JuliaS's picture

Well, you know how the machine works. Did you buy a rifle and drive to Washington to overthrow the sociopaths? Did you stage a tax revolt? What did you do to make things right?

RichardParker's picture

I will not aid and abet these elitist sociopaths.  I will not participate in Obamacare.  Never participated in selective service.  I refuse to vote. Participating in elections legitimizes them (both the corrupted elections and the elitists).  Why do you think so many countries have "mandatory" voting?  The same reason our beloved (demagogue) leader pushed for them.  What I'm doing may not seem like much, but at least I stopped drinking the Kool-Aid (about 15 years ago) and TRY to think for myself.

Overthrow them?  You know they have a domestic security force (DHS) with a 60 billion dollar (give or take) budget, right?  The only way to win is if EVERYONE slowly starves the beast.  We are witnessing the decline of a modern day version of the Roman Empire.  I think I'd rather sit back, make some popcorn and "enjoy the show". I was born in Generation X, which means I'm totally fucked.  However, my great grandchildren may have a brighter future, god willing.

JuliaS's picture

Election participation legitimizes the outcome. Absolutely agree. I don't vote typically. The only time I did was when RP ran for office, because in my life I've never seen a candidate like him... aside from 1988 when he ran for office, but somehow I completely missed him. His platform was identical, but without the internet it was much easier for the mainstream media to drown him. I find footage from those days I didn't even know existed.

As for starving the beast - impossible. Plain and simple. Life requires money, money comes from the bank and there you have it. You have only 2 social positions - either you're a net producers that fuels the welfare state while the government robs you of the products of your labor, or you're a net consumer who is used as a justification for robbing net producers, supposedly on your behalf. You're in this country - you're the system. Travel elsewhere and you'll find it's the same game there with different allocation of resources and priorities, but otherwise the same. There is nowhere to run.

The system relies on exponential growth, so it'll implode regardless of your individual contribution. It's a mathematical certainty.

What do I do? I acquire skills. That's how I deal with the situation. Revolution? Oh, it ain't happening. They got us exactly where they want us - completely pacified. People stage riots over sports events, or using any excuse that would let them trash property and loot convenience stores. When it comes to putting the same energy towards fighting true criminals - those sociopaths you mention - not a squeak. And you're right, those people have real security. They'll kill as many as they need to get what they want. And they can travel freely to anywhere on the planet. The borders - they're to keep the sheep fenced. They're built so that we couldn't chase after them if they run off with briefcases full of money.

So, where am I going with this? I don't know.

RichardParker's picture

There are many ways to slowly starve the beast.  I'll give you two. 

Carry as little debt as possible.  Among my peers, I am the only person who is debt free with the exception of a small amount money left on a 3 yr car loan (cheapest car I would be content with) where I put down a third of the total price in cash. 

Let the (TPTB) keep forcing their multiculturalism, white guilt, class warfare, inflation, punitive tax rates (FDR redux) etc. to fuck the productive class over and enrich themselves.  I'll just work less.  No second job or overtime (unless compulsory).  Keep demotivating me and I'll do the bare minimum in terms of productivity/W-2 to get by.  I've been living like a grad student for over 10 years.  I actually like not having tons of "stuff"  Being a good politician is WAY more helpful for job security than being competent when you work in corporate R & D.

And there's not a damn thing they can do about it. :)

NoPension's picture

Good for you. Your a survivor. Your so smart, and I'm sure your a good person, and never pass a mirror without stopping, looking in, and saying, " hi there, YOU are a good person"
Now with the accolades aside.

There are multiple competing sets of rules in this country. It depends on what political rat bastard wants your vote, as to what applies to you.

I can compete 1 on 1 with some third world immigrant trying to steal my job. But why should I have to? I would rather just shoot the motherfucker and be done with it. And I am not alone. We slobs in the trenches are getting pretty fed up. When the wheels come of the cart, they won't be able to get to that border fast enough. It won't be pretty.

Buster Cherry's picture

"They slip up and out of the country they go."

Nah, I don't think so...

Pinche Caballero's picture

Yep, BC, gotta agree

Examples of Serious Crimes of Illegal Aliens

And, if I'm not mistaken, Mexico even routinely provides legal defense for its illegals who commit crimes, especially the biggies like rape and murder, and are caught in the U.S.

Sorry, Julia S, but portions of your comment are, shall we say - No bueno!