In July, more metropolitan areas reported an unemployment rate below 10 percent than in July 2010. Eight more areas reported unemployment rates below 7 percent; however, areas in California and Arizona reported unemployment rates of between 15 and 30 percent. Out of 372 metropolitan areas, 10 areas reported unemployment rates below 5 percent.
“Unemployment rates were lower in July than a year earlier in 257 of the 372 metropolitan areas, higher in 94 areas, and unchanged in 21 areas,” according to the Aug. 31 BLS release.
Unemployment among America’s young people is at an all-time high, with youth unemployment having increased by 745,000 between April and July, a 30.5 percent increase over the same time in 2010.
But overall, the unemployment rate for America’s youth declined from 4.4 million in July a year ago to 4.1 million this July, a 7 percent decrease, according to the latest BLS statistics.
While young men found it easier to find jobs, the unemployment rate of young women, blacks, and Hispanics didn’t improve over the prior year’s rates.
Stimulus Funds and Job Creation
The stimulus funds distributed by the federal government were meant to boost job creation. First-time research by George Mason University’s Mercatus Center looked to see if the stimulus funds truly created jobs and put the unemployed back to work.
“Less than half of the workers [that were hired] came from the unemployment line, and instead were hired away from other firms and businesses,” said Garett Jones, professor at George Mason University, when rolling out the groundbreaking stimulus research.
The funds from the American Recovery and Reinvestment Act (ARRA) doled out to America’s industrial sector didn’t create many new jobs, but just moved jobs around, according to the research released on Sept. 1 by the Mercatus Center.
“One might think that this would still create a job opening, but during a recession it’s not really the case. It’s often one less person the employer has to fire,” Jones said.
The research suggests that ARRA funds were reinvested into the company and not kept in the firm’s bank account or used to improve their earnings. Firms that received at least 10 percent of their income from the ARRA increased their workforce by 5 percent or 6 percent. However, the researchers qualify their statement by admitting that they had omitted to ask if the jobs were temporary or part-time jobs.
“The weight of the evidence suggests that ARRA did an enormous amount of ‘job shifting’ rather than ‘job creating,’” according to Mercatus research.
Evidence suggests that the job movement among companies that received ARRA funds were no different during good economic times than during this recessionary period.
The researchers suggest that for any future government handouts, similar to the funds under the ARRA, the respective agency should require the firm to hire the unemployed instead of hiring from its workforce or from those still holding down a job.
In Jan. 2010, Veronique de Rugy, senior research fellow at the Mercatus Center, discovered that there was no connection between U.S. unemployment and stimulus funds received by U.S. companies.
The latest research at Mercatus agreed with de Rugy: “There was no tendency for stimulus funds to go to organizations that found it easy to hire good people. … Government spending has its greatest effect when targeted toward sectors of the economy with slack; by this job-focused measure, stimulus funds were poorly targeted.”
Foreign Workers Taking Jobs
“The lack of protections for foreign workers in the Exchange Visitor Program, and the lower salaries and administrative costs that employers can legally pay for their labor creates strong incentives to hire J-1 exchange visitor workers over U.S. workers,” according to a mid-2011 Briefing Paper published by the Economic Policy Institute (EPI).
Many jobs that could help reduce America’s unemployment rate go to people who are brought into the United States under the U.S. State Department’s J-1 and J-2 Exchange Visitor Program, created with the intent to foster scientific and cultural knowledge.
“The [J visa] program displaces U.S. workers by providing significant direct and indirect financial incentives for individuals, companies and organizations that recruit exchange visitors as workers and sponsor them [as] exchange visitors, then hire them as lower-cost labor alternatives to U.S. workers or foreign guest-workers in other nonimmigrant visa classifications that provide greater protections for U.S. workers,” according to an article on the Summit County Citizens Voice website.
The State Department has kept its hands off and outsourced the entire program, including oversight, monitoring, and compliance to companies and sponsors of that program. Any legal entity can become a sponsor after paying a one-time nonrefundable fee of $2,700. By keeping its hands off, the State Department loses in court when trying to remove a sponsor that misuses the program.
Since the early 1990s, government auditors, including the State Department’s Inspector General, “published three reports with scathing criticisms of the lack of oversight, the lack of data to make meaningful labor market assessments, and many other failings in the program,” according to the EPI, with the State Department turning a deaf ear, despite its having broad authority to address shortcomings.
Statistics about the number of J visas granted annually are collected by the State Department, but are hard to come by. An internet search came up empty-handed. Requests under the Freedom of Information Act are not always worth the time, as the agency can drag its feet for months and then respond with outdated information.
The EPI said that in 2010, there were 17,190 foreign camp counselors in U.S. camps and 132,342 foreigners had taken on summer work travel jobs—information gleaned through internet research and not provided by the State Department.
The administration for Yellowstone National Park facilities, Xanterra Park & Resorts, has used the J visas for years. Morey’s Piers, a New Jersey amusement and water park, hires more than half of its seasonal employees through the J visa program.
The EPI indicates that there is “nothing in the Fulbright-Hays Act of 1961 [that] even remotely suggests that the Exchange Visitor Program was intended to function as a seasonal guestworker program to meet the staffing needs of U.S. employers.”
One argument for continuance of the J visa program is that the number brought in under the program is so small that it would not affect the overall unemployment rate. The counterpoint is that every position counts during high unemployment, and as one does not have reliable data on the number of foreigners brought in under the J visa, the argument is hard to substantiate. Another consideration is that employers often report that foreign workers are more willing to take positions that are otherwise hard to fill—jobs less desired by Americans.
