Brookings Institution exaggerates Obama’s job record
The sparse job gains from President Barack Obama’s economic policies are being exaggerated by a frequently cited “jobs gap” calculator offered by the Brookings Institution.
The misleading data have been cited by Atlantic magazine, the San Francisco Chronicle, The New York Times, the Huffington Post and National Journal. The data have also been used by several progressive writers and bloggers, including Ezra Klein and Neil Irwin at the Washington Post, and columnist Fareed Zakaria.
Even The Daily Caller has used the calculator, which allows journalists and analysts to plug in monthly job-creation numbers to predict when the unemployment rate will drop to 6 percent or 4 percent — or even 3 percent.
For example, if employers keep hiring 157,000 people per month, as they did in January 2013, the calculator predicts the nation’s unemployment rate will fall to 4 percent in late 2021.
In January 2012, Klein used the calculator to declare that the December 2011 jobs report was “a good jobs report — and a good year.”
But Brookings’ calculator is misleading, because it ignores the flow of legal and illegal immigrants, which amount to roughly 60,000 workers per month. Instead, it only recognizes young Americans entering the workforce, at the rate of 88,000 per month.
If the inflow of 60,000 legal immigrants is included in the calculation, January’s rate of 157,000 jobs per month leaves the unemployment rates basically unchanged for a decade. (RELATED: Unemployment rate nudges up)
To actually get the unemployment rate down to 4 percent by late 2021 — eight years from now — employers would have to hire 217,000 people per month.
“A very large fraction of new people seeking jobs each year are legal immigrants,” said Steven Camarota, research director for the Center for Immigration Studies. In 2011, U.S. Census data showed that 67,000 immigrants joined the labor force each month, most of whom were likely legal immigrants, he told TheDC.
“Given the trajectory of job creation in the United States, and the continuing high levels of immigration, it is hard to see how we make significant progress in reducing unemployment or underemployment or even reaching all the people who have given up looking for work,” he said.
In general, immigrants win a disproportionate share of new jobs, because their informal networks help them move to business-friendly cities and states, such as Texas and Virginia. In contrast, Americans are reluctant to move away from families and friends, homes and professional contacts to place where they have few friends. (RELATED ANALYSIS: In Obama’s economy, immigrants win big)
However, other data offered by the project does include the impact of immigrants in population growth.
A state-by-state estimate of job losses since 2007, for example, shows that New York’s job-to-person ratio has declined so much that it has lost the equivalent of 623,000 jobs.
The same calculator shows Florida down 990,000 jobs, California down 1.8 million jobs and Illinois down 500,000 jobs. The states that have lost the fewest numbers of jobs per person include Texas, North Dakota, Kentucky and Virginia.
The jobs calculator is hosted by Brooking’s Hamilton Project. The project is run by Michael Greenstone, and it has an large advisory board of progressive notables, such as Robert Rubin, Penny Pritzker, Alan Blinder and Peter Orszag.
The board also includes former Republican Sen. Chuck Hagel, who is now Obama’s nominee to be the secretary of defense.
In 2010, Greenstone wrote a primer on the economic of immigration that is being cited to boost the Democrats’ controversial plan to award a conditional amnesty to 11 million illegal immigrants, and to import more workers sought by business.
“Immigrants raise average wages slightly for the United States as a whole … [by] between 0.1 and 0.6 percent for American workers,” he wrote. Simultaneously, he said, immigrants also “enhance the purchasing power of Americans by lowering prices of ‘immigrant intensive’ services like child care, gardening, and cleaning services.”
The Hamilton Project did not respond to TheDC’s request for a comment.