http://www.globalnepali.com.np/economy.php

(They failed to include the graphs and charts. If you want to see them let me know)

RECESSION IN THE US

Hitting Hard By Mabi Singh and Ishwar Khatiwada

Both native and foreign born workers have been equally impacted by the economic recession in the US and for many immigrants,the ‘American Dream’ seems to have been deferred

The U.S. economy has spiraled downwards during the last 20 months. The economic recession that began in December 2007 has been the longest since the Great Depression of the 1930s. None of the leading business, economic, and labor market indicators has begun to indicate how soon this ongoing recession might end. Over the past 20 months (December 2007 through July 2009), the U.S. lost 6.66 million payroll jobs. (Chart 1). During the same time period, the Gross Domestic Product (GDP) declined by 3.7% and the corporate profits dropped by nearly 25%. In comparative perspective, of the eleven economic recessions that occurred in the U.S. after the end of World War II, job losses in the current recession are the largest ever in both absolute and relative terms.[1] The rising job losses are costly for the U.S. economy. To keep the level of unemployment in check, the U.S. economy should create at least 140,000 jobs per month, matching the growth rate of the non-institutional working-age population. Nationwide, 30 million of those 16 and older are either unemployed, underemployed, or are hidden unemployed- those who desire a job but are not actively looking. Every business sector and every socio-economic group in the U.S. has felt the impacts of this recession. Both native and foreign born workers have been equally impacted by this economic recession. However, the impact of this recession has been much harsher for U.S. men, both native and of foreign origins, than for their respective women peers. Of the total 6.66 million non-farm jobs lost over the past 19 months, men accounted for more than 74% of all the job losses.[2] News stories portraying the hardships faced by both immigrant and native- born U.S. workers from this economic downturn are ubiquitous. The size of the foreign- born immigrant labor force is not trivial in the U.S. Seventeen out of every 100 workers in the U.S. are foreign-born. In the 1980s, only 7 percent of workers in the U.S. were foreign-born. Never in recent decades in the U.S. have immigrants been so adversely impacted by the economic downturn There are no particular measures to assess the real impacts of the current economic recession on immigrants; however, we can use the unemployment rate measure to assess the labor market impacts of U.S. economic downturn on immigrants.

Trends in the Monthly Payroll Employment Loss Over the December 2007 through June 2009 Period, U.S. (Seasonally Adjusted Number in 1,000’s)For many immigrants, the American Dream seems to be deferred in this prolonged economic recession. The unemployment rate of immigrant workers in recent months has surpassed 10 percent. It should be noted that a disproportionately higher share of immigrant workers are employed in bluecollar/ construction/ production/clerical/ retail sales/food service/hospitality and other low level white-collar occupations. Foreign-born immigrants working in these occupations have either fewer years of formal schooling or limited English speaking proficiency. The unemployment rate for immigrants without a college degree in these occupations has in recent months reached as high as 12 percent.[3] Immigrants employed in professional/technical occupations have also suffered from the higher incidence of unemployment due to the meltdown in financial and technology sectors. Even immigrants in highly specialized professions are facing difficulty securing employment due to lack of any net new job creations in their professions.

One of the most adversely impacted groups of immigrants in this economic recession is the recent college graduates. Recent immigrant college graduates are experiencing greater difficulty finding a job in their respective fields of study. Only 36% of immigrants under age 30 with a Bachelor’s degree who arrived in the U.S. since 2000 are employed in occupations that require a college degree. A majority of these graduates are either unemployed or mal-employed (working in an occupation that does not require one’s education or occupational skills).[4] Equally impacted by this economic recession are graduation bound immigrant college students. In our survey with Nepalese college students in Boston area, we found that recent immigrant college students are prolonging their graduation for fear of exhausting their visa stay period. Many of the college graduates that we talked to have also contemplated returning to Nepal because they cannot stay in the U.S. legally for two major reasons- (i) lack of any job offers from U.S. employers and, (ii) lack of necessary financial aid for further graduate education. U.S. colleges have suffered heavily financially due to a huge decline in their endowments as a result of the economic downturn and, therefore, there is a lack of necessary funds for financial aid to aspiring students.[5] As jobs are becoming scarcer and millions of Americans are laid off and unemployed, the prospects of finding a job and obtaining H1-B visas from employers (a first step towards attaining the American Dream) are becoming distant dream for immigrant college graduates. This phenomenon is true for all foreign-born immigrants in the U.S. in this economic downturn. In addition, harsher employment policies for immigrants are being introduced recently as job prospects for U.S. native-born citizens are diminishing.[6] The immigration debate on Capitol Hill seems to be cyclical resurfacing during the economic slump and subsiding during better economic times and healthier labor markets. Recent statistics reveal that there is a substantially less flow of immigrants (both legal and illegal) in the U.S in recent years.[7] Other studies of U.S. immigration have revealed that in addition to unfavorable economic conditions, the declining flow of immigrants in the U.S. is also attributable to more stringent U.S. immigration law enforcement around the U.S. borders and much improved economic conditions of migrants in their home countries.[8] However, in Nepal’s case, based on some anecdotal evidence and past research, a majority of immigrants opt not to return to Nepal despite their hardships in the U.S.[9]

The unemployment rate is the most reliable measure we can use to assess the labor market impacts of the economic downturn on the immigrant labor force, as well as on the labor force as a whole. The monthly CPS survey of nearly 60,000 households administered by the U.S. Census Bureau for the Bureau of Labor Statistics allows us to examine the labor market conditions of the adult population in the U.S. During the periods of economic and labor market expansion, working-age immigrants (16 and older) experienced lower incidence of unemployment than their native-born counterparts. In the first half of 2000, when the U.S. economy was at the peak of its labor market boom, the unemployment rate of immigrants 16 and older was only 4.2%, which was slightly lower than the unemployment rate of the U.S. native-born adults (4.4%). When the U.S. economy started to deteriorate at the end of 2007, job prospects for immigrants started to diminish. By the first half of 2009, the unemployment rate of foreign-born workers reached 10 percent. (Chart 2). Over the past six months, the unemployment rate of foreign-born immigrants lacking a high school diploma has exceeded 14%, but much lower than their U.S. native-born citizens which exceeded 20%.

As mentioned earlier, jobs in the U.S. in all occupational categories have become scarcer in this economic recession. As of May 2009, there were nearly five unemployed persons for every job opening. In industries such as construction/manufacturing/retail/ wholesale trade/leisure and hospitality, where an overwhelmingly large share of foreignborn immigrants are employed, there were more than 10 unemployed persons for every single job opening. Before the onset of this recession, the ratio of unemployed persons to vacancies was just under 2. In the end of 2000, there was virtual parity between new job openings and the number of unemployed.

Although some economic indicators in recent months have shown that the recession might be softening, there are no signs of improvement in the U.S. job market. For immigrants aspiring to achieve the American Dream, the Dream seems to be fading away, at least for now.

Singh is associate professor at the Tufts University, Boston, Massachusetts, and Khatiwada is a research economist at the Center for Labor Market Studies, Northeastern University, Boston. Both of them are currently based in the USA.