July 23, 2005: Teen Jobs Go To Illegal Immigrants, Analyst Says
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http://www.detnews.com/2005/business/0507/23/biz-256543.htm
Saturday, July 23, 2005
Teen jobs are going to illegal immigrants, analyst says
By Charles Zehren / Newsday
The uncomfortable reality, as Andrew Sum sees it, is that there's a direct link between the steep national decline in teen employment rates and the growing practice of businesses hiring illegal immigrants and paying them off the books.
Sum is the director of the Center for Labor Market Studies at Northeastern University and lead author of a widely cited nationwide study projecting teen employment will continue to fall, with a drop to 36.7 percent this summer from 45 percent in 2000. That puts it at or near its lowest level since the data series began in 1948, despite a strengthening economy and improving overall labor market.
“The immigrant increase in employment is overwhelming. Every net new job created is taken by an immigrant. I know that's shocking, but that's the truth,'' Sum said offering his sober assessment. “It happened in Massachusetts and New York in the 1990s, and now its happening in the country as a whole.''
That's not to say the sole reason teens are getting squeezed out is that businesses are breaking the rules, going underground and hiring unskilled immigrant labor.
It's always been the case that some high school kids might not get work because they are lazy, lack initiative, face racism, need contacts, don't have a car or can afford to do something else because they have rich parents.
Other empirical factors cited by Sum include recent reductions in government-sponsored employment programs and the “age twist,'' the historically unprecedented influx of workers 55 and older into the job market, which may be a function of downsizing, forced retirements, spouses' having to work and the cost of health care.
Teens also face increased competition from 20- to 25-year-old college graduates who have been driven into less attractive jobs unrelated to their fields or who are vamping for time as retail clerks, waitresses and on-the-books construction workers.
But what has Sum particularly intrigued and concerned is the undeniable evidence that more American businesses are opting to expand profits and remain competitive by hiring low-cost undocumented workers instead of paying taxes, workers' compensation and even rudimentary health benefits for legal workers. “I haven't seen anything like this in 25 years,'' Sum said.
Businesses hired 3.7 million immigrant workers during the past five years, according to the Bureau of Labor Statistics' current population survey, Sum said, noting research shows 50 percent to 60 percent arrived illegally. But in the same period, other BLS stats indicate 3.1 million people went on the books.
The 600,000 difference reflects a loss in employment of native-born workers, mostly among people younger than 30, Sum said, adding that the 55-and-older group is the only segment posting job gains.
Sum said more business owners interviewed as part of his research indicate that they are adding immigrant workers to their payrolls for the April through November period. “By the time kids get out of school on vacation, it's too late,'' he said. “The jobs are filled.''
Typically, he said, for every 10 immigrants hired by construction and landscaping firms, two are put on the books as eligible for workers' compensation. If one of the illegal workers gets injured, he said, employers often “flip'' that worker into a job slot filled by a covered worker, who then goes off the books.
Business owners also tell Sum they are more likely to hire immigrants than teens because immigrants are generally easier to recruit, work full time, work harder and remain loyal. Two-thirds are younger than 35.
Sum said small businesses acknowledge that the Internal Revenue Service is getting wise and auditing more aggressively. Consequently, more employers this summer — especially restaurants — are opting to pay their workers partly through a check and partly in cash. But the chasm between official and unofficial employment in the nation continues to widen.
In New York, for example, between the first quarter of 2001 — when employment peaked — and the first quarter of 2005, the government's household employment survey showed an increase of 148,000 jobs. Yet the number of employees businesses reported hiring as part of the payroll survey fell by 188,000.
That gap of 336,000 jobs suggests many New Yorkers say they are working in jobs that businesses say don't exist, Sum said. The pattern is more pronounced in Texas and California.
This summer, in terms of teen employment, New York has lagged behind the country, and New York City has lagged behind the state “`big-time,'' Sum said.
When jobs for teens become hard to get, the study concludes, “many simply stop looking and never enter the labor market in the first place,'' so they won't be classified as unemployed.
Which is disconcerting because “the more someone works in high school, the easier it is for them to find a job when they graduate, the more likely it is that they will work full time, the more likely it is that they will earn more money, and the earnings effect lasts for as long as 10 years,'' Sum said.
Sum's solutions include stronger enforcement of immigration and business employer laws, higher standards for youth, more business cooperative education, tax credits to teen employers, and government funding for teen job programs, especially in the cities.
“Kids overwhelmingly depend on a formal job for work,'' Sum said. “And businesses aren't hiring kids much anymore.''
Zehren is a Newsday business columnist.
