Archive for the ‘Economics’ Category

Trump admin targets temporary skilled foreign workers

Saturday, April 22nd, 2017

The Trump administration issued a “Buy American, hire American” Executive Order with a provision on temporary skilled workers:

“In order to promote the proper functioning of the H-1B visa program, the Secretary of State, the Attorney General, the Secretary of Labor, and the Secretary of Homeland Security shall, as soon as practicable, suggest reforms to help ensure that H-1B visas are awarded to the most-skilled or highest-paid petition beneficiaries.”

Temporary skilled worker H-1B visas (for 3 years, can be extended to 6) are awarded to 85,000 persons a year. There are over 500,000 H-1B visa holders in the U.S. Most work in computer jobs. The new visas for this year are awarded by lottery with an April 11 deadline. 199,000 applications were submitted.

Brookings in 2013 said that “Detailed data on H-1B wages by occupation suggests that the H-1B program helps to fill a shortage of workers in STEM occupations.

Job openings harder to fill

“Labor market experts interpret the duration of a job opening as an indicator that qualified candidates are hard to find. Using 2011 job openings data from the Conference Board for the 100 largest metropolitan areas, we find that 43% of job vacancies for STEM occupations with H-1B requests are reposted after one month of advertising, implying that they are unfilled. By contrast 38% of vacancies in non-STEM occupations requiring a bachelor’s degree go unfilled after one month, and just 32% of job postings for all non-STEM occupations.

Visa holders are paid more

“H-1B visa holders earn more than comparable native-born workers. H-1B workers are paid more than U.S. native-born workers with a bachelor’s degree generally ($76,356 versus $67,301 in 2010) and even within the same occupation and industry for workers with similar experience.”

We need an agency to identify occupational shortages.

The failed 2013 immigration reform act included a provision for a Bureau on Immigration and Labor Market Research, which could “collect better information from employers about job openings, including occupations, the number of qualified applicants, the number of interviews conducted, and the length of time it takes to fill the job. Likewise, the bureau should also consider how demand and supply play out in regional or metropolitan area labor markets, since job search and recruitment often happen locally.”

Camarota’s argument for less immigration

Friday, April 14th, 2017


Foreign Affairs just published, “Why the United States Should Look Out for Itself,” by Steven Camarota, Director of Research for the Center for Immigration Studies.

Camarota adds to the one million new green card awards each year another 700,000 new “long term” foreign entries as students or temporary work visa holders. These figures can be compared to the roughly four million new births each year and to the total native born population of about 275 million.

The author’s first critique involves what he sees as a shift from aspirations of assimilation towards acceptance of non-assimilated identity. “Emphasis on assimilation has been replaced with multiculturalism, which holds that there is no single American culture, that immigrants and their descendants should retain their identity, and that the country should accommodate the new arrivals’ culture rather than the other way around.” But how truly prevalent are “race- and ethnicity-conscious measures” today?

Camarota then addresses the disproportionate share of poor households among immigrants compared to native-born persons. “Some 51 percent of immigrant-headed households use the welfare system, compared to 30 percent of native households.” This is largely due to surge in immigrants from Mexico and Central America in the 1990s and early 2000s. They work in farming, low status construction jobs, buildings and grounds maintenance, kitchens, housecleaning, and packing / warehouse jobs. Some of these jobs pay above minimum wage, others do not. Jobs paying minimum wage or somewhat higher today tend to qualify the worker for some public assistance.

He concludes with a 30,000 foot proposal not very different than that of the Jordan Commission from the 1990s: “It could involve legalizing some illegal immigrants in return for tightening policies on who gets to come in. Prioritizing skilled immigration while cutting overall numbers would increase the share of immigrants who are well educated and facilitate assimilation.”

Unauthorized dairy workers in Vermont in a time of Trump

Monday, April 10th, 2017

Undocumented on the farm: inside the life of a Vermont migrant dairy worker,” by Terry Allen, appeared on Vermont Digger. Here are some nuggets from the best reporting I’ve seen on unauthorized workers at time of the Trump administration.

A thousand- plus dairy workers

Carlos [not his real name] just wanted a job. “It’s hard, hard work,” he says. “But you came to America to make money and go back quick. So you come to Vermont.” At his previous job, construction for a large company in a mid-sized Texas city, the hourly wages were comparable to dairy, but the potential earnings and the cost of living were not. The Vermont jobs include housing with heat and other utilities, isolation that brings fewer spending temptations, and an opportunity to work up to 90 hours a week.

Older Vermonters still remember when, in the 1940s, some 11,000 small, family farms the dotted the land…..The number of farms continues to decline — from 1,030 to 825 just in the last decade.

Nonetheless, milk production is up….What keeps the owners awake at night — besides the vagaries of weather and fluctuating milk prices that sometimes fall below costs — is finding and keeping cheap labor. Most have tried locals, and some have turned to former prisoners. But few stick it out.

It is little wonder that Americans with other options do not last. With two milkings a day, 12 hours apart, farms must be staffed 14 to 16 hours a day. Cows don’t get Christmas off, and neither do dairy workers.

Latino migrants are filling a gap and saving America’s farms. Nationwide, immigrants, many undocumented, comprise 51 per cent of the nation’s dairy industry, according to a 2015 study by Texas A&M University for the National Milk Producers Federation. If these workers were deported, the report concludes, milk prices would rise 90 per cent, and cost the U.S. economy more than $32 billion.

Without “our guests,” as then Vermont Gov. Peter Shumlin called migrant farm workers, much of the state’s milk industry would likely dry up. Say goodbye to affordable Cabot cheddar; kiss Vermont-sourced Cherry Garcia sweet adios.

A few times a year, officials from the Mexican consulate in Boston travel to areas with unauthorized Mexican citizens and, after careful screening, provide legal identification papers. The document allows migrants to buy a plane ticket to return to home, to prevent their being mistaken for criminals if picked up by authorities; and, in Vermont and 11 other states plus DC, to obtain a restricted “driving privilege” license.

While the Mexican IDs are useful, they do nothing to change U.S. legal status. And impediments to obtaining lawful visas are nearly insurmountable….Temporary H-2A agricultural visas last for months and are only for strictly seasonal jobs like planting and picking crops.

Recently Immigration and Customs Enforcement (ICE) agents targeted and detained the three prominent activists with Migrant Justice, a Burlington-based group advocating for dairy workers’ rights. The detentions were denounced in public demonstrations and a sharp letter from the state’s congressional delegation and Republican Gov. Phil Scott.

Support for the migrants is not universal among Vermonters. Some workers at the Department of Motor Vehicles contacted authorities to drop the dime on people with “South of the Border” names who applied for the special driver’s licenses, according to emails obtained through a public records request by Migrant Justice, a local farmworker advocacy group.

As expected, wages on the rise on California farms

Sunday, March 26th, 2017


The LA Times reports on the rise in farm worker costs in California. Here are some excerpts:

The flow of labor began drying up when President Obama tightened the border. Now President Trump is promising to deport more people, raid more companies and build a wall on the southern border.

That has made California farms a proving ground for the Trump team’s theory that by cutting off the flow of immigrants they will free up more jobs for American-born workers and push up their wages.

Wages approaching $20 in some vineyards

Today, farmworkers in the state earn about $30,000 a year if they work full time — about half the overall average pay in California. Most work fewer hours.

A year ago, Leobijildo Martinez the 31-year-old from Mexico, was earning $14.75 an hour doing the same work for a different Napa company. He joined Silverado in April and now he’s making $19.50 working vineyards that produce grapes for a winery whose bottles go for about $300.

“Everything in Napa is different. They treat you differently there, they don’t pressure you, and they respect the law,” he says. “If you work here, in Stockton, you don’t have enough money.”

Machinery to pick wine grapes

About five years ago, Brad Goehring changed the wiring holding up parts of his vines so that no metal stakes exceed the height of the wire. The setup allows for a grape harvesting machine to prune the top of the vine, as well as both sides.

“I think we can eliminate, I’m just guessing, 85% of the labor on these new vineyards,” he says, reducing pruning costs from $300 per acre, on average, to $80. He plans to keep spending more on machinery, like his $350,000 tractor-like vehicle that shakes grapes off the vine and catches them before they fall to the ground.

The job is seasonal, so laborers have to alternate between long stretches without any income and then months of 60-hour weeks. They work in extreme heat and cold, and spend all day bending over to reach vegetables or climbing up and down ladders to pluck fruit in trees. If farmers upped the average wage to, say, $25 an hour, people born here might think twice. But that’s a pipe dream, many argue. “Well before we got to $25, there would be machines out in the fields, doing pruning or harvesting, or we would lose crops,” Philip Martin of UC Davis says.

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.”