Archive for the ‘Economics’ Category

Immigration: Trump’s cornerstone policy initiative

Wednesday, March 8th, 2017

The Trump administration speaks loudly and wields a big stick on immigration. It eyes an extremely attractive opening to deliver on its promise to Make America Great Again. It looks beyond the 2018 and 2020 election cycles to a leading a once in every 40-50 year cycle in the nation’s immigration policy.

The administration’s approach to immigration restrictions is catnip to conservatives in the way that universal health insurance coverage is to liberals. The constituents in favor feel vindicated, the opponents feel disparaged and weak. Liberals are fine for expanding benefits and rights. Conservatives are fine for instilling order.  Stephen Bannon and Attorney General Sessions are out to make history.

America wavers between a restrictive and permissive approach to foreign migration. It waxed permissive from the 1880s until an explicitly racist restrictive act in 1924. Lyndon Johnson extended the civil rights movement by engineering with liberal Democrats a permissive reform in 1965. Since then, Washington has been paralyzed from conveying a reputable style of leadership in goals and practical coordination, while legal and illegal immigration boomed. The public has become confused about what it wants. It appears to say that it likes immigrants but wants fewer of them.

The Trump administration in its first weeks in office showed that it learned from the Obama Administration the power of executive orders over immigration. Obama protected classes of unauthorized persons; Trump applies his discretion to bar admittance, and to expand deportations.Obama deported millions, but his deportations fitted in the narratives about him of neither supporters nor opponents. The quickly emerging narrative of this administration is more coherent, sharply defined.

Trump greatly pleases conservatives with his deportations and his entry bars. That its executive orders bypass Congressional oversight and to a lesser extent judicial interference gives flesh to his boast that only he can save the country. He is making the most of lurid images of rapist Mexicans and Muslims who practice honor killings.

Behind the narrative of law enforcement is a strategy, in a pilot now, of serious constraints on legal immigration. In the initial country ban of January 27, but missing in the replacement executive order of March 6, were instructions to Executive Branch agencies to consider in visa review “a process to evaluate the applicant’s likelihood of becoming a positively contributing member of society and the applicant’s ability to make contributions to the national interest.”

No executive branch in generations has formally addressed the national interest for immigration. Task forces formed in the late 1970s and in the 1990s to think through the national interest for immigration failed to make a dent on Congress.

Expect well-publicized tightening up of the nation’s temporary worker programs, which include both $12 an hour farm workers and $75,000 software engineers. Expect executive branch-sponsored reports on how immigration combines with unfair foreign competition to stymie the careers of native-born Americans.

Barriers to productive employment by skilled immigrants

Tuesday, February 28th, 2017

The Migration Policy Institute issued a report on the barriers to fully productive employment by immigrants with advanced degrees.

One-quarter of all college-educated immigrants and refugees in the United States are stuck in low-skilled jobs or unemployed because of (1) complex licensing requirements, (2) lack of access to programs that can help them bridge English or skills gaps, (3) unfamiliarity with the U.S. labor market and (4) employers’ negative perceptions of the quality of foreign education and work experience. They include doctors, engineers, social workers, teachers and other professionals.

In an earlier report, MPI found that this skill underutilization — brain waste — results in $39.4 billion in forgone wages and a resulting $10.2 billion in unrealized tax payments annually. More than half of the 1.9 million highly skilled immigrants experiencing brain waste came to the United States with academic and professional credentials already in hand.

Some steps to remedy the problem:

*Reform state licensing laws
*Expand reciprocity /mutual recognition between states, countries educational institutions
*Increase advanced English education
*Find out how job integration succeeds/fails
*Monitor employer behavior

The Wonder that is Silicon Valley

Wednesday, February 8th, 2017

From the NY Times:

“The U.S. is sucking up all the talent from all across the world,” Mr. Collison said. “Look at all the leading technology companies globally, and look at how overrepresented the United States is. That’s not a normal state of affairs. That’s because we have managed to create this engine where the best and the brightest from around the world are coming to Silicon Valley.”

“Last year, researchers at the National Foundation for American Policy, a nonpartisan think tank, studied the 87 privately held American start-ups that were then valued at $1 billion or more. They discovered something amazing: More than half of them were founded by one or more people from outside the United States. And 71 percent of them employed immigrants in crucial executive roles.”

From the 2016 Silicon Valley Index

“Silicon Valley has an extraordinarily large share of residents who are foreign born (37.4%, compared to California, 27.1%, or the United States, 13.3%). This population share increases to 50% for the employed, core working age population (ages 25-44), and even higher for certain occupational groups. For instance, nearly 74% of all Silicon Valley employed Computer and Mathematical workers ages 25-44 in 2014 were foreign-born. Correspondingly, the region also has an incredibly large share of foreign-language speakers, with 51% of Silicon Valley’s population over age five speaking a language other than exclusively English at home (compared to 43% in San Francisco, 44% in California, and 21% in the United States as a whole). This majority share in 2014  was up from 49% in 2011.”

The world trade in human capital

Friday, January 27th, 2017

An interesting aspect of world migration is how migration can be viewed as world trade in human capital, influenced by public policy. Some of the darkest passage in history involve forced migration (such at the Atlantic slave trade). Let’s look at three countries today.

The Philippines: leading exporter of human capital

The Philippines is a purposeful exporter of human capital. An government agency is tasked to look over and influence where its expatriates go. It looks after their welfare.  It exceeds all other studied countries in its “returns through remittances” (RTR) from emigration, meaning the impact of remittances is high compared to GDP and the emigrants form a relatively low share of the population. Three percent of the population is currently living in other countries, and remittances are equivalent to about 9% of GDP. This high RTR is due in part to the fact that a very high percentage of emigrants who are skilled (this is, at least, some college): 55%.

For closer looks at the Philippines go here and here.

For great many developing countries, at least a third of emigrants are skilled compared to those who stay – usually under 10%of the population. Bulgaria, among 34 developing countries, is the closest to the Philippines in the importance of remittances relative to the size of emigration.

In contrast, 10% of the Mexican population is outside the country but remittances are relatively low, equivalent to 3% of GDP. That’s because only 15% of emigrants are skilled, not much higher than the skilled share of the resident population (11%).

For great many developing countries, at least a third of emigrants are skilled compared to those who stay, which is usually below 10% of the population. Bulgaria, among 34 developing countries, is the closest to the Philippines in the importance of remittances relative to the size of emigration.

Australia: human capital importer

If the Philippines is a model human capital exporter, Australia is a model human capital importer. Among the resident population, 29% is skilled, but 42% of immigrants are skilled. The comparable figures for the United States are 52% and 42% — that is, immigration here lowers the average skill level. For Australia, 24% of the population is foreign born compared to 13% in the U.S.

Ireland: all mixed up

Some of the OECD countries have large gross stocks of both immigrants and emigrants. As a result, if migration had never taken place their population would be roughly the same. Ireland is the clearest example: its share of immigrants is 13%, but the share of emigrants is 16%. In a world without migration, its population would only be 3% higher.

Country by country analysis from “A Global View of Cross-Border Migration,” by Julian di Giovanni, Andrei A. Levchenko, Francesc Ortega. 2015

Dreamers, other unauthorized persons, and their economic contribution today and tomorrow

Saturday, January 21st, 2017

 

741,546 unauthorized young people have received DACA — Deferred Action for Childhood Arrivals.

Three pro-immigration groups carried out a survey of DACA enrollees. The survey was done online thus is vulnerable to response bias. The respondents reported significant gain in employment by virtue of DACA.

An earlier Ford Foundation-funded study looked at undocumented higher education students. Among its findings:

Participants emigrated from 55 different countries of origin, On average, participants had resided 14.8 years in the U.S.; in most cases, the majority of their lives have been spent in the U.S. 61.3% had an annual household income below $30,000, 29.0% had an annual household income of $30,000 to $50,000, and 9.7% had an annual household income above $50,000. 72.4% were working while attending college. 64.1% reported having at least one member of their household who was citizen or lawful resident. Deportation is a constant concern. Over ¾ of participants reported worries about being detained or deported. 55.9% reported personally knowing someone who had been deported including a parent (5.7%) or a sibling (3.2%) A vast majority (90.4%) said they would become citizens if they could.

The Center for American Progress estimated the economic impact of legal status for the estimated 5.2 million DACA and DAPA (Deferred Action for Parents of Americans and Lawful Permanent Residents) persons. (DAPA is described here.)

The Center for American Progress estimates a significant gain in the American economy by granted permanent legal status to all 8 million undocumented workers.

Widespread labor violations in Los Angeles’ garment industry

Friday, December 30th, 2016

The Washington Post reports on sub-minimum wages paid to immigrant workers in the Los Angeles garment industry, which employs 45,000.

It writes, “While immigrants often face criticism for stealing jobs, they are the ones being increasingly undercut in America’s clothing industry, forced to accept wages below the legal minimum as retailers fight to pass on bargain prices to consumers. Federal regulators have uncovered a widespread practice of garment workers, most of them undocumented, being paid below the legal minimum wage, according to a recent Department of Labor report. Those findings were echoed in interviews with workers and workers activists here.

This recent report appears to be that published by the Department of Labor on December 22, called “Garment Industry’s Wage Violations Share Common Thread,” which in the follow short passage concisely states the problem. It is authored by David Weil, the administrator of the department’s Wage and Hour Division.

“The heart of the problem lies squarely with the pricing structure dictated by the retailers in this industry. The prices they pay for garments fail to support manufacturers’ ability to provide sewing contractors even the most basic worker protections – minimum wage and overtime. We have found many workers like Esperanza making $4 per hour or even less.

On average, contractors receive only 73 percent of the price they would need in order to support paying these workers the absolute minimum allowed by law. In one time study, the actual sewing fee paid to the contractor by the manufacturer was just $1.80, when, based upon our analysis, the fee should have been $4.67 to allow the person who sewed it to be paid the minimum wage. In some cases, retailers were paying $4 for a garment, when they would need to be paying manufacturers more than $10 to support paying workers legally. Any less than that, and someone is being cheated.

In conjunction with this study, we conducted 77 investigations of randomly selected garment shops in Los Angeles in 2015 and 2016, and uncovered violations in 85 percent of them. We found more than $1.3 million in unpaid wages due to workers and also assessed employers more than $65,000 in penalties. Since the shops were randomly selected, these results reveal the high underlying rate of noncompliance in the industry that results from the low prices driving the system.”

What happens when immigrants leave farming?

Wednesday, December 7th, 2016

A Washington Post article thrust into the spotlight the role of unauthorized workers in farming. About 70% of farmworkers are foreign born and of them about half are unauthorized. The Department of Agriculture looked into the impact of removing these workers; its documents are no longer available on the web, but here is a summary, found here:

In one report, modeling showed that more farm production would happen due to “temporary non-immigrant farmworkers”, but “a large reduction in the number of unauthorized workers in all economic sectors resulted in a long run relative reduction in output and exports for both agriculture and the broader economy. (The deleted report is “Immigration Policy and Its Possible Effects on U.S. Agriculture”)

In a second report, if farm wages rise, or unauthorized workers are no longer available — “case studies suggested a range of possible adjustment scenarios, including increased mechanization for crops such as baby leaf lettuce, Florida juice oranges, and raisin grapes. Production of other crops, such as apples and fresh strawberries, would likely rely increasingly on aids such as hydraulic platforms and conveyor belts to improve labor productivity. Crops that cannot readily be mechanized and face significant competition for export markets, or from imports, would likely see domestic production levels fall.

A 2011 report from the Federation for American Immigration Reform, which argues or less immigration, in fact a moratorium on immigration,

looks at the wage impact of removing unauthorized workers:

“Authorized workers are observed to be willing to accept wages that are 18% higher than unauthorized workers in the fruits, nuts, and vegetable sector and 22% higher in field crops and grains…• If unauthorized workers were replaced by authorized workers at the higher average wage rate authorized, workers currently earn, farms in the fruits, nuts, and vegetable sector would experience a total labor cost increase of 10%, and the increase for the field crops and grains sector would be 6%.”

State restrictions on immigration: a surprising finding

Tuesday, November 15th, 2016

A study published on November 3 assesses whether state-level laws enacted between 2005 and 2010 that seek to crack down on illegal immigration have deterred immigrants, both unauthorized and authorized, from residing in those states.

(By Bárbara Gómez-Aguiñaga,Stepping into the Vacuum: State and Cities Act on Immigration, But Do Restrictions Work? published by the Migration Policy Institute.)

from the study:

Slightly more than 3,000 immigration-related laws and resolutions were enacted by states between 2005 and 2015. Of the 868 policies between 2005 and 2010, 441 were classified as restrictive with an additional 423 as immigrant-friendly, and four as neutral.

….Restrictive state immigration laws do not have a statistically significant correlation with the percentage change of the unauthorized immigrant population or the overall immigrant population. However, the economic variable measured—median household income—had a positive and significant correlation with the percentage change of both the overall immigrant population and the unauthorized immigrant population alone.

The results indicate that an increase of 1 percentage point in the median household income of a state is correlated with a 0.739 percent increase in the overall immigrant population of a given state and a 1.699 percent increase in the unauthorized immigrant population. On a larger scale, the results suggest that a 10 percentage point increase in the median household income of a state would correspond to a 7.39 percent increase in the overall immigrant population and a 16. 99 percent increase in the unauthorized immigrant population.

Economic conditions themselves, rather than the restrictive immigration-related legislation that arose during this period, are the main predictor for changes in the immigrant population of individual states, even after the end of the recession.

What Hispanic poultry workers in North Carolina say about their work

Sunday, September 25th, 2016

From: “Good Job, Bad Job: Occupational Perceptions Among Latino Poultry Workers” —

Immigrant workers frequently take jobs that are physically demanding, provide low wages, and result in injuries (e.g., poultry production and processing). Through a qualitative approach, this paper elicits poultry workers’ evaluations of their jobs and set them in the larger context of their lives.

These poultry production and processing workers were realistic about the good and bad characteristics of their jobs. Across all employers, the characteristics deemed good were benefits, and stability. Stability was the most valued characteristics for poultry production and processing work. The literature consistently indicates that those who perceived their jobs to be secure report higher levels of job satisfaction, and lower levels of psychological stress.

This study further validates these findings by showing that poultry production and processing workers are satisfied with their jobs because they offer them stability, particularly compared to other options largely held by Latino immigrant workers (e.g., construction, farm work). Fringe benefits are positive and significant determinants of job satisfaction. Workers who would otherwise have limited access to health insurance describe this characteristic of the job as a valuable one. Good pay was also valued as a job characteristic, but only the employees of one poultry processing company consistently reported receiving good pay.

To these workers, poultry processing has relatively good wages compared to other jobs. Lastly many of the workers see this secure job as an opportunity to provide their children and their family with the “American Dream,” including access to valued outcomes such as education, a house, and financial security.

In opposition to these good job characteristics, these poultry production and processing workers understood that the physical and social environments of their work were bad and could result in poor physical and mental health. They understood that the negative health consequences of these jobs were chronic as well as immediate…These poultry production and processing workers know the causes of ill health (repetitive motions, speed of the line, use of tools such as knifes and scissors, pain in the back from bending down, and concern for the strong odors and dust), and that changing jobs would relieve their pain and other symptoms, but keep to their jobs because the positive characteristics apparently outweigh the negative.

The 65 participants interviewed in western North Carolina were between the ages of 18 and 68 years, with a mean age of 37 years. A little over half (54%) of the participants were men. The majority of the workers were from Mexico (51%) and Guatemala (42%),with the remainder from other Central American countries. Time worked in poultry ranged from 2 months to 20 years, with an average of 6 years.

Good Job, Bad Job: Occupational Perceptions Among Latino Poultry Workers. Dana C. Mora, MPH,Thomas A. Arcury, PhD, and Sara A. Quandt, PhD

 

The home care workforce and immigrants

Saturday, September 24th, 2016

Maids, house cleaners, child care workers, and personal aides – domestic workers, or the home care workforce — support the quality of life of middle class America. They are the face of foreign, and often unauthorized, workers the middle class depends upon enough to trust young children and the aged with.

In 2012, there 4.3 million persons were employed in these jobs, of which 32% were filled by foreign-born workers; in 2022, 5.2 million are projected to be employed. About 90% of job holders are female. Personal care aide jobs are increasing at an annual rate of 4.9%, which far exceeds the growth rate of any other major occupation.

Among the largest 23 jobs paying under $25,000 annually, personal care aide job growth through 2022 will be by far the largest – 500,000. The home care workforce in total will account for one of every three to five new jobs under $25,000, and may account for half the new jobs below $25,000 that are conventionally female-dominated.

The National Domestic Workers Alliance made these estimates in 2015 for domestic workers, based on interviews —

Percentage foreign born: 46%. In contrast, 16% of the entire workforce is foreign born. Of those foreign born what percentage undocumented: 47%. For the entire immigrant workforce, about one third are undocumented. Percentage Latino/a: 60%. In contrast, 16% of the entire workforce is Latino/Hispanic.

PHI defines the home care workforce somewhat differently than does the Alliance. PHI applies somewhat different job categories.

The Census estimated in 2012 that their annual income averaged $19,500. PHI estimates that the actual total annual income is closer to $13,500. The Alliance reported a gradient in pay, with citizens being paid $12 and hour vs. $10 an hour for foreign-born. PHI reported that in the past decade wages have stuck at $10 an hour. See this week’s New York Times article on personal aides to the aged.

The home care workforce is broadly excluded from non-wage work benefits and job protections. The Alliance reports at less than 9% work for employers who pay into Social Security. The Fair Labor Standards Act of 1938 excluded domestic and farm workers from coverage by the act. That was partially corrected for domestic workers in 2013.

State workers’ compensation, labor protection and unemployment compensation programs originally excluded these workers.

Many home care workers do not qualify as “employees” so even if protections and benefits are extended, that will not affect many of these workers.