By Leah Durant
The sequence of events in September has revealed a troubling downturn in the US workforce and economy. The Bureau of Labor Statistics recorded on Friday, September 2 that zero jobs were created during the month of August. On Thursday, September 8, President Obama unveiled the American Jobs Act, a bill proposed to extend payroll tax cuts and increase spending to maintain global competitiveness. On Friday, September 9, reports leaked that Bank of America could layoff 10 to 14 percent of its current staff—estimates range from 28,000 to 40,000 workers.
The number of unemployed persons has hovered around 9.1 percent during the past few months. Approximately 14 million Americans are unemployed. As companies like Bank of America continue to perform mass layoffs, it becomes even more likely that number will increase.
The economy has been in a state of malaise for over three years and neither the administration nor Congress has made any inroads with a major job plan. Corporations and other private industries have been allowed to work within their own interpretations of the law or under the radar. Business Week defines Corporate Social Responsibility as “a way of managing a business by considering the impact of activities on customers, suppliers, employees, shareholders, communities and other stakeholders, as well as the environment.” Corporations, unfortunately, have not lived up to these expectations and instead have focused almost exclusively on earning greater profits.
Wages and salaries accounted for just 1 percent of economic growth in the first 18 months after economists declared that the recession had ended in June 2009, according to Northeastern University researchers. Corporate profits, by contrast, accounted for an unprecedented 88 percent of economic growth during those first 18 months. That’s compared with 53 percent after the 2001 recession, nothing after the 1991-92 recession and 28 percent after the 1981-82 recession.
Although many major corporations have racked huge profits during this economic period, many have resisted in investing in E-verify technology to aid workplace enforcement and have continually sought to increase visa applications for foreign workers. Nationally, 250,000 businesses are using E-Verify, the program that quickly validates the legality of workers, and each week another 1,300 businesses sign up for the system. However, many top corporations have invested millions in lobbying fees to defeat E-Verify legislation at the state level. Recently, California’s State Senate passed AB 1236, which would prohibit counties and local municipalities in the state from requiring businesses to use E-Verify.
Some major corporations have even been implicated in hiring scores of illegal immigrants. Last February, the fast food chain Chipotle fired hundreds of workers in Minnesota after a probe by immigration authorities revealed that the chain was likely hiring illegal aliens in fifty of its stores in the state. Chipotle’s share price has skyrocketed to more than five times its price in 2006, and the company planned to open 135 stores this year. Obviously, business is booming but the company opted to save a few dollars by funneling in illegal labor rather than respecting the corporate code of conduct and US immigration laws.
Also, recent research has uncovered a major correlation between immigration and high unemployment rates. Data released by the Pew Hispanic Center estimates that the illegal immigration population in the US hovers between 12 to 20 million. A 2006 report by Catholic Online analyzed these demographics and noted that 37.5 percent of the then-estimated 20 million illegal immigrants were children, meaning 62.5 percent were adults. If one takes the 20 million figure to be accurate, there are likely 12 million adult aliens residing in the US illegally today, many of which currently occupy jobs and subsequently drive struggling Americans out of work.
Most importantly, there is also evidence that the presence of large numbers of both legal and illegal immigrant workers drives down average wages for US-born residents. In recent studies Harvard academics George Borjas and Lawrence Katz found that this negative effect on wages is particularly pronounced for US-born Americans who lack a high school education. Their 2005 study found that immigration from the 1980 to 2000 period reduced the earnings of native high school dropouts by as much as eight percent and other demographic groups by 2 to 4 percent.
A number of factors will continue to adversely impact the US workforce and economy; including, average wage reductions, continued outsourcing, and overpopulation. Comprehensive immigration reform would address workforce related issues, but US based corporations who prize themselves on incorporating a sense of service, responsibility, and commitment should reconsider the commitment they have to their American workforce.
Leah Durant is Executive Director of Progressives for Immigration Reform, a non-profit organization seeking to educate the public on the unintended consequences of mass migration through research, advocacy and engagement. PFIR favors immigration policies that consider the effects of policy on population size and growth, working conditions and wages of both immigrants and native born workers, and the environment.