October 29, 2010

After the Great Recession: Foreign Born Gain Jobs; Native Born Lose Jobs

II. Employment and Unemployment in the Recession and Recovery

The Great Recession, lasting from December 2007 to June 2009, is aptly named for a number of reasons. The longest economic downturn in the U.S. since World War II put millions of people out of work, sent the unemployment rate soaring to 30-year highs and pushed long-term unemployment to unprecedented levels.1

Job losses in the economic downturn were concentrated in the final 12 months of the Great Recession. Losses were severe for all groups—native born and foreign born, Hispanic and non-Hispanic, white, black and Asian. However, the recovery has proceeded in different directions for different workers. Most notably, immigrants have gained jobs while the native born have continued to experience job losses. There is only one exception to this general trend—immigrant Asians lost jobs in the recovery, but their native-born counterparts gained jobs in the recovery.

Foreign-born and Native-born Employment and Unemployment

The U.S. economy shed 5.6 million jobs from the second quarter of 2008 to the second quarter of 2009: 4.5 million jobs for native-born workers and 1.1 million jobs for foreign-born workers (Table 1). The immigrant share of jobs lost—18.8%—was slightly higher than the share of immigrants in the labor force—15.5% in the second quarter of 2008.2

The plunge in employment meant that a smaller share of the nation’s working-age population was being put to work. Overall, the employment rate dropped from 62.7% in the second quarter of 2008 to 59.7% in the second quarter of 2009. Prior to 2009, the last time the employment rate was less than 60% was in the first quarter of 1986.3 Both the native born and the foreign born experienced similar decreases in their employment rates—from 62.4% to 59.3% for the native born, and from 64.5% to 61.7% for the foreign born.

Not surprisingly, unemployment rates rose quickly from 2008 to 2009. The national unemployment rate increased from 5.3% to 9.2%, second quarter to second quarter. The changes for the native born and the foreign born were virtually identical, from 5.3% to 9.2% for the native born and from 5.2% to 9.3% for the foreign born.

Although labor market outcome for native- and foreign-born workers in the final year of the recession were similar, their experiences in the first year of the recovery have been very different. The native born have continued to lose jobs, but immigrants have started to reverse the tide. Immigrants, therefore, have a head start on restoring their labor market status to pre-recession levels.

With respect to employment, the economy shed 543,000 jobs overall in the first year of the recovery. Those losses fell entirely upon native-born workers, who lost 1.2 million more jobs from the second quarter of 2009 to the second quarter of 2010. As a result, the employment rate for the native born continued on a downward spiral, down to 58.3% from 59.3%, and the unemployment rate continued to climb, up to 9.7% from 9.2%.

In sharp contrast, foreign-born workers gained 656,000 jobs from 2009 to 2010. The increase in employment was strong enough to boost their employment rate—from 61.7% to 62.3%—and lower their unemployment rate—from 9.3% to 8.7%. However, job growth for immigrants from 2009 to 2010 was not sufficient to make up for the 1.1 million jobs they lost from 2008 to 2009.

Hispanics

Hispanics experienced more significant setbacks in the recession than other groups. For native-born Hispanics, the recovery continued to generate losses that were greater than average. However, immigrant Hispanics, who account for half of the foreign-born workforce, made notable gains in employment from 2009 to 2010.

From 2008 to 2009, both native-born and foreign-born Latinos experienced large drops in employment relative to the size of their workforces. Native-born Latinos lost 151,000 jobs, and their employment rate dropped steeply, from 61.5% to 57.1%, or by 4.4 percentage points (Table 2). Immigrant Hispanics lost 643,000 jobs from 2008 to 2009, and their employment rate also fell 4.4 percentage points, from 67.1% to 62.7%.

The unemployment rate for native- and foreign-born Hispanics crashed the double-digits barrier in 2009. For both, the unemployment rate increased by about 5 percentage points—from 8.0% to 12.9% for native-born Latinos, and from 5.9% to 11.0% for immigrant Latinos.

Employment among native-born Latinos continued to decrease through the recovery from 2009 to 2010. They lost an additional 43,000 jobs, and their employment rate registered another steep drop, from 57.1% to 54.7%. The unemployment rate for native-born Hispanics reached 14.0% in the second quarter of 2010.

The opposite proved true for immigrant Hispanics. They gained 435,000 jobs from the second quarter of 2009 to the second quarter of 2010. That was the majority of the total of 656,000 jobs gained by immigrants overall.4 As a result, the employment rate for foreign-born Latinos increased from 62.7% to 63.7%, and their unemployment rate decreased from 11.0% to 10.1%.

As in the past, the construction sector led the way in providing employment for foreign-born Hispanics—they gained 98,000 construction sector jobs from 2009 to 2010 (Table 3). Immigrant Hispanics also found job opportunities in several other industries. That included 84,000 new jobs in hospital and other health services, a sector that generally fared well in the recession, and 70,000 jobs in wholesale and retail trade.

For native-born Hispanics, the construction sector was the leading source of job losses in the recovery. Their employment in the sector decreased by 133,000 from 2009 to 2010. Other leading sources of lost jobs were transportation and warehousing and wholesale and retail trade. Those two sectors collectively let go of 92,000 native-born Hispanics.

Non-Hispanics

As with Latinos, foreign-born non-Hispanics have fared better in the labor market during the recession and recovery. In the final 12 months of the Great Recession, native-born non-Hispanics lost 4.4 million jobs, their employment rate fell from 62.4% to 59.5% and their unemployment rate increased from 5.1% to 8.9% (Table 4).

The losses for foreign-born non-Hispanics in the recession were somewhat milder than for the native born. Foreign-born Hispanics also lost jobs, a total of 412,000 from the second quarter of 2008 to the second quarter of 2009. However, the drop in their employment rate, from 62.2% to 60.7%, was more modest, and their unemployment rate increased by less, from 4.6% to 7.6%.

The recovery has been a positive experience only for immigrant non-Hispanics. Their employment increased by 220,000, their employment rate rose from 60.7% to 60.9%, and their unemployment rate fell from 7.6% in 2009 to 7.4% in 2010.

The recovery for native-born non-Hispanics has meant only that they bled fewer jobs than during the recession. From the second quarter of 2009 to the second quarter of 2010, native-born non-Hispanics lost 1.2 million jobs and their employment rate fell again, from 59.5% to 58.6%. The unemployment rate for native-born non-Hispanics increased from 8.9% to 9.3%.

During the recovery, job losses for native-born non-Hispanics were concentrated in eating, drinking and lodging services (529,000 fewer jobs), construction (511,000) and manufacturing (208,000) (Table 5). These losses more than overcame modest job gains in social services (149,000 more jobs), hospital and other health services (145,000) and public administration (142,000).

Hospital and other health services were also the leading source of job gains for foreign-born non-Hispanics in the recovery. They added 89,000 jobs in that sector from 2009 to 2010, and they also gained 58,000 jobs in transportation and warehousing and 52,000 jobs in professional and other business services.

Non-Hispanic Whites, Blacks and Asians

Labor market outcomes for blacks historically have lagged behind those for other groups. This recession and recovery have been no exception. Blacks accounted for 987,000 of the 4.8 million jobs lost by non-Hispanics from 2008 to 2009 (Table 6). Their unemployment rate increased from 9.2% in the second quarter of 2008 to 14.9% in the second quarter of 2009, and their employment rate decreased from 58.4% to 53.8%.

The experience of blacks in the recovery has also correlated with their nativity. Native-born blacks lost an additional 142,000 jobs from 2009 to 2010. Even after a year of economic recovery, barely half of the working-age population of native-born blacks—51.4%—was employed in the second quarter of 2010. The unemployment rate for native-born blacks rose from 15.4% to 16.3%. In contrast, foreign-born blacks gained 81,000 jobs from 2009 to 2010 and experienced a rise in the employment rate (from 62.8% to 66.6%) and a drop in the unemployment rate (from 11.4% to 10.7%).

Non-Hispanic whites are the largest group in the workforce, and they accounted for the majority of jobs that were lost from 2008 to 2009—3.6 million of the total of 5.6 million (Table 7). However, in other respects, the recession was less severe for them. The drop in their employment rate, from 63.1% to 60.6%, was less than for other groups, and their unemployment rate, increasing from 4.3% to 7.7%, did not rise as sharply.

Foreign-born whites, like black and Latino immigrants, gained jobs in the recovery. In fact, the number of jobs they gained in the recovery—214,000—more than made up for their loss of 158,000 jobs from 2008 to 2009. The employment rate for foreign-born whites also increased in the recovery, from 56.3% to 58.0%, and their unemployment rate fell from 7.0% to 6.3%.

Like most other native-born groups, native-born whites also lost a significant number of jobs in the recovery. The 1.2 million jobs they lost from the second quarter of 2009 to the second quarter of 2010 caused their employment rate to fall from 60.8% to 59.9%. Also, the unemployment rate for native-born whites rose from 7.7% in 2009 to 8.1% in 2010.

The labor market experience of Asians has differed from that of others during the recession and recovery. Although native-born Asians fared worse in the recession than foreign-born Asians, they are recovering faster. From the second quarter of 2009 to the second quarter of 2010, native-born Asians gained 208,000 jobs, their employment rate increased from 55.2% to 58.6% and their unemployment rate fell from 9.9% to 8.7% (Table 8).

However, in the first year of the recovery, foreign-born Asians lost 102,000 jobs, experienced another drop in their employment rate, from 63.9% to 61.6%, and saw their unemployment rate climb further, from 6.7% to 7.0%.

  1. numoffset=”12″ The full range of the economic impacts of the Great Recession is documented in “A Balance Sheet at 30 Months: How the Great Recession Has Changed Life in America,” Pew Research Center, Social & Demographic Trends Project, June 30, 2010.
  2. The immigrant share of job losses was higher in the earlier stages of the recession. For example, immigrants accounted for 22.8% of the decrease in employment from the fourth quarter of 2007 to the fourth quarter of 2008.
  3. On a seasonally adjusted basis, the employment rate was last less than 60% in 1984.
  4. Hispanics currently account for nearly 50% of the foreign-born workforce.