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“CALCULATION OF THE EMPLOYMENT RATE” mentioning the Federal Reserve System was published in the Senate section on pages S4736-S4737 on May 3, 2004.
The publication is reproduced in full below:
CALCULATION OF THE EMPLOYMENT RATE
Mr. ALEXANDER. Mr. President, I wish to discuss with my colleagues something of a mystery. I have yet to be able to find an answer to this mystery. I am hoping by addressing it on the Senate floor and by letters I am sending today to Alan Greenspan, Chairman of the Board of Governors of the Federal Reserve System, and the Bureau of Labor Statistics, their research might help me figure this out.
I asked Chairman Greenspan at our hearing on April 21 of the Joint Economic Committee about the 6 million people, more or less, who are living and working in the United States who our Government is not counting when it makes our monthly projections about who is working and who is unemployed.
Here is what I base that question on: There is a consensus there are 8 to 10 million undocumented aliens or illegal immigrants in the United States today. For example, the Urban Institute estimate says 8 million, and the Center for Immigration Studies says 10 million. The Urban Institute estimates perhaps 6 million or more of those undocumented persons have a job in the United States. I do not think there is much debate about the fact there are 6 million people living in the United States, more or less, who are illegally here who are also working.
My guess is our Government is not counting most of these 6 million undocumented aliens when we announce each month the number of Americans who have jobs. It was 138 million for March and the number who are unemployed, 5.7 percent of the workforce, or 8.4 million people in March.
The Bureau of Labor Statistics, which makes these announcements each month, gathers their estimates in two different ways. The first is the so-called payroll survey of 400,000 business establishments. Since it is a violation of Federal criminal laws for a company to employ an undocumented alien, I think it is wrong to assume most or even many of the 6 million illegal immigrants who are working here are reported by the payroll survey. Nor do I believe these 6 million illegal immigrants are likely to be included in the other principal data-gathering mechanism of the survey, which we call the household survey.
This is a survey of more than 60,000 persons living in the United States which basically asked in many different ways, do you have a job? Now, this must include a lot of people the payroll service does not, people such as farmers, people working at home, independent contractors, and I suspect a lot of people who are here illegally.
I also believe that it paints a much clearer picture of employment in the United States than the payroll survey. Common sense suggests to me that the household survey also does not include many undocumented aliens. If one is an illegal immigrant and they receive a phone call from the Government asking questions, they are not likely to give many answers, I would not think, especially if the phone call is not in their native language.
So I see no basis to assume these 6 million workers--my guess is in most cases hard workers but undocumented aliens--are being counted or that they are being equally uncounted by the two surveys, which is what Mr. Greenspan suggested might be the case. Our failure to find some way to consider the implications of having what I would judge to be so many undocumented aliens working has a great many policy implications.
Now I am not trying in these remarks to solve the great issues of immigration, whether we should have it, how much we should have, what we should do. That is another debate. I am just trying to understand who is here. If 6 million are here and working, are we counting them? It would be helpful to know the answer to that question, to know whether we are understating the number of people living in America who are employed and stating the rate of people in America who are unemployed.
This is one of the principal debates in our presidential campaign: It is the economy, stupid. It is jobs. Well, how do these 6 million uncounted workers affect the information we put out each month upon which we make all of these debates? Also, if we have 8.4 million unemployed, according to our official statistics, and if 6 million illegal immigrants are working, are these 6 million taking jobs that the 8.4 million want? Also, if these 6 million were not here, would we suddenly have virtually full employment?
Another point might be, if these 6 million were not here and the 8.4 million still remained unemployed, or many of them did, that certainly would tell us something about whether we need more or less unemployment insurance, more or fewer training programs, or more or fewer lessons in English. Or if the 6 million illegal workers are actually employed, that would tell us something about the effectiveness of our immigration laws and would help us make more accurate estimates of the contributions these workers might make to the Social Security and Medicare systems.
So if we are going to rely on these monthly estimates from the Bureau of Labor Statistics, my point is, if one is going to say to us we have 138 million people at work in the United States, what about the 6 million who are here who probably are not counted, who are illegally here? They are real people. They are working in real jobs. What about them? Or if we are talking about the 8.4 million people who are unemployed in the United States, what is the effect of having 6 million illegal people on that rate of unemployment? It is information I think we ought to know.
At the end of his answer to my question, Mr. Greenspan said that having better information about the number of undocumented aliens living and working in the United States is a subject that has
``bedeviled statisticians.''
I believe it is also a problem we ought to try harder to figure out the answer to. In fact, I believe it is inexcusable that we would base so much of our public debate about unemployment on surveys that likely exclude several million employed workers in the United States, many of them doing jobs that most Americans consider to be valuable jobs.
This failure to report accurate information may be leading us into a number of erroneous, ineffective, and expensive policy decisions. I have asked Mr. Greenspan and his excellent staff and I have asked the Bureau of Labor Statistics if they could examine this question in-depth and give me and perhaps other Members of the Joint Economic Committee, if Chairman Bennett finds the subject interesting, an opportunity to talk with them about their conclusion.
It seems odd that we would continue to base so much of our national debate upon information that may be flawed, and if it is not flawed, then we need someone with reasonable authority to say that each month we are counting the 5, 6 or 7 million people who have jobs in the United States and who are illegally here so that this cannot be an issue. If they cannot say that, then we need to work harder to find out the answer.
I ask unanimous consent that a copy of my letter to Chairman Alan Greenspan be printed in the Record.
There being no objection, the material was ordered to be printed in the Record, as follows:
U.S. Senate,
Washington, DC, May 3, 2004.
Hon. Alan Greenspan,
Chairman, Board of Governors, Federal Reserve System,
Washington, DC.
Dear Mr. Chairman, I am writing to follow up on your answer to my question about illegal immigration and calculation of the employment rate during your testimony before the Joint Economic Committee on April 21.
My concern is that there may be up to 6 million people living and working in the United States who our government is not counting when it makes our regular projections about who is working and who is unemployed.
There is a consensus that there are 8 to 10 million undocumented aliens or illegal immigrants in the United States today. For example, estimates from the Urban Institute and the Center for Immigration Studies, based on data from the Current Population Survey, are 8 million and 10 million respectively. The Urban Institute estimates that 6 million or more undocumented persons have a job in the United States.
You indicated in your comments to my question that you believe our government's job-counting surveys take these illegal workers into account, or at least, they do a fairly equal job of NOT taking them into account.
My guess is that the government is not counting most of these 6 million illegal workers when we announce each month the number of Americans who have jobs (138,298,000 for March, seasonally adjusted) and the number who are unemployed (5.7 percent of the workforce or 8.4 million people in March, seasonally adjusted).
The Bureau of Labor Statistics gathers data for these estimates in two main ways. The principal way is through the Current Employment Statistics Program, or so-called payroll survey of payroll records from 400,000 business establishments. Since it is a violation of Federal criminal laws for a company to employ an undocumented alien, I think it is wrong to assume that most or even many of the 6 million illegal immigrants who are working for established businesses are reported by the payroll survey. These illegal immigrants may be self-employed, agricultural workers, contractors, or in some other kind of work that is not in any event covered by the payroll survey.
Nor do I believe that most of the 6 million illegal immigrants are likely to be included in the other principal data-gathering mechanism of the bureau, the Current Population Survey, commonly known as the household survey. This is a telephone survey of more than 60,000 persons living in the United States that basically asks in many different ways, ``Do you have a job?'' The household survey must include a great many persons that the payroll survey does not--such as farmers, people working at home, and independent contractors--which is one reason why it paints a larger picture of employment in the United States than the payroll survey. But common sense suggests to me that the household survey does not include many illegal immigrants. If you are an illegal immigrant and you receive a phone call from the government asking questions, you are not likely to give many answers--especially if the phone call is not in your native language.
So I see no basis to assume that these 6 million undocumented aliens are being counted--or that they are being equally uncounted--by the two surveys.
Our failure to find some way to consider the implications of having so many undocumented aliens working has a great many policy implications:
Knowing the answer would help us know if we are understating the number of people living in America who are employed and overstating the rate of unemployment.
If we have 8.4 million unemployed and 6 million illegal immigrants working, are those 6 million taking jobs that the other 8.4 million want?
If the 6 million all went home, would we have virtually full employment?
If the 6 million all went home and the 8.4 million still remained unemployed, that certainly would tell us something about whether we needed more or less unemployment insurance, or more or fewer training programs, or more or fewer lessons in English.
If the 6 million illegal workers are actually employed, that would tell us something about the effectiveness of our immigration laws--and it would help us make more accurate estimates of contributions these workers might make to the Social Security and Medicare systems.
You said at the end of your answer to my question that having better information about the number of undocumented aliens living and working in the United States is a subject that has ``bedeviled'' statisticians. If is also a problem we ought to try harder to figure out.
In fact, I believe it is inexcusable that we would base so much of our public debate about employment on surveys that likely exclude several million employed workers in the United States. It may be leading us into a number of erroneous and expensive policy decisions.
I would be very grateful if you could examine this question in depth and give me an opportunity to talk with you about your conclusions. I am also making the same request of the Bureau of Labor Statistics.
Thank you very much.
Very best wishes,
Lamar Alexander,
U.S. Senator.
Mr. ALEXANDER. I suggest the absence of a quorum.
The ACTING PRESIDENT pro tempore. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. GRASSLEY. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.
The ACTING PRESIDENT pro tempore. Without objection, it is so ordered.
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