Archive for the ‘Economics’ Category

We don’t plan for native-born workforces

Tuesday, September 18th, 2018

The 19th Century saw foreign workers brought into the U.S. through private sector workforce recruitment, such as Chinese workers on railroads, to fill jobs otherwise filled by native-born Americans. American food processing companies in the 1990s recruited undocumented workers at staff their factories. But there has been little of the reverse, that is, a concerted hiring of native-born American workers to staff positions that otherwise would be filled by immigrants.

An example of a possible “Hire An American” policy to recruit native-born American doctors for rural medical care.

Today, one quarter of all practicing doctors are foreign-trained (the great majority being foreign born). In rural areas, and in low income areas, the percentages are higher. What would it take to design and implement a strategy to make them more native-born?

There is no federal agency nor any major research/policy institute which routinely examines native born / immigrant workforce dynamics. There is no tried and tested method of designing such a strategy. And no one in Washington is talking about building this capacity.

And, for purposes of staffing rural physician slots with more native-born doctors, building such a strategy is very difficult. Let’s look at the forces that would complicate a plan, for instance, to financially incentivize graduates of American medical schools to locate for extended periods in rural areas”

1. Labor shortages and surpluses come in waves and both influence and are influenced by immigration.

2. There is a lot of internal sorting / shifting within occupations. For instance, native born doctors tend to concentrate in higher compensated specialties and live in relatively more amenable locations.

3. There can be a lot of sorting / shifting between occupations — for instance, using nurse practitioners a lot more for primary care than physicians. In my dozen years in Vermont, I am far more likely to see a nurse in primary care than to see a physician.

Business Roundtable grades U.S. poorly on immigration policy

Friday, September 14th, 2018

The Business Council wrote a letter to Homeland Security Secretary Kirstjen Nielsen on August 22, signed by 39 CEOS. Citing a backlog of green card applications, the Business Council wrote that in the past year, U.S. Citizenship and Immigration Services (USCIS) “has issued several policy memoranda over the past year” that inject uncertainty into skilled employment by foreigners. “Few will move their family and settle in a new country if, at any time and without notice, the government can force their immediate departure–often without explanation.” The Council also opposes the impending decision to bar the spouses of H1-B visa holders from working.

The Business Council’s ranking of immigrant policies

Overall ranking: The Council on a scale of 1 to 5 ranks the U.S. at 2.3, Germany at 4.5, the U.K. at 3.9, and Canada at 3.3. “Based on a comprehensive examination of 10 advanced economies to identify and evaluate the best immigration policies to promote economic growth, the United States ranked 9th out of 10 competitor countries, ahead of only Japan, a country historically closed to outsiders. This analysis found that America’s near-bottom ranking among major advanced economies is due to U.S. laws and regulations that impose unrealistic numerical limits and excessive bureaucratic rules on hiring workers that the country’s economy needs.”

For use of highly skilled workers, the Council’s scores are the U.S. at 2.0, Germany at 5.0, the U.K. at 4.0, and Canada at 3.5.

Here is what the Council says about skilled labor immigration:

U.S.(2.0): More than half of applicants for H-1B visas each year are denied the opportunity to work due to the low H-1B quota.

Germany (5.0): Applications for high-skilled people are rarely turned down, there is no annual quota and Germany’s membership in the European Union (EU) provides access to 500 million people who can work without any immigration processing. The process is clear enough that some employers do not need attorneys to apply. The EU Blue Card provides an easy option for hiring non-EU skilled professionals, including no labor market test.

Canada (3.5): There is no annual quota for hiring high-skilled foreign nationals. Employers must pay a market wage; recent requirements for employers to test the labor market have made the process much more difficult for employers.

Sweden and immigration: a lot has to do with jobs

Wednesday, September 12th, 2018

The foreign-born worker unemployment rate in Sweden is five times that of native born workers. in the U.S. the foreign-born rate is below that of native born workers.

in 2000, 8.9 million people lived in Sweden. 50,000 immigrants entered the country, and 38,000 emigrated. In 2019, 10 million people lived in Sweden. 163,000 persons, equivalent to 1.6% of the population immigrated and 46,000 emigration. That annual rate of immigration is equivalent to 5 million persons immigrated to the U.S, compared to the roughly 1 million who do. In 2016, 67,000 persons, mostly from Syria, were granted asylum. That compares to about 45,000 refugees who will enter in the U.S. in 2918. In 2016, there were 163,000 asylum seekers in Sweden.

Because immigration to Sweden before the Syrian crisis was generally low, the total foreign population in Sweden (about 15% of total) is proportionally not much higher than in the U.S. (13%). Thus Sweden experienced in about a decade the rise in foreign persons in the U.S. that took several decades

In July, 2018, 3.6 native born Swedes were unemployed compared to 19.9% of foreign born workers. Per The Local, “Unemployment is clearly falling among both native and foreign born, but there are still major differences. To get more new arrivals into work, education and subsidized jobs are important,” Arbetsförmedlingen analyst Andreas Mångs said in a statement.

In 2017, Sweden had one of the highest unemployment rates among foreign-born workers (about 15% in its chart) and the U.S. had one of the lowest (about 5%). The low U.S. rate may be in part due to how Spanish speakers with low English proficiency find employment in Spanish speaking worksites.

According to the Bureau of Labor Statistics, the unemployment rate for foreign-born persons in the United States was 4.1 percent in 2017, down from 4.3 percent in 2016.  The jobless rate of native-born persons was 4.4 percent in 2017, down from 5.0 percent in 2016.

Lessons from past wave of refugees in Sweden: it’s jobs, stupid.

From The Local: Two decades ago thousands of refugees fled war in Yugoslavia and made Sweden their home, where today they are a well-integrated part of society. During the Yugoslav wars in the 1990s, many of those fleeing the conflict looked to Sweden for protection, with just over 100,000 coming to the Scandinavian nation at the time. In 1992 alone, 70,000 people from the former Yugoslavia applied for asylum in the country – a record high number for a calendar year until it was surpassed in 2015.

A 2016 study showed that a significantly higher proportion of Bosnians are employed. In the 20-24 age bracket, employment was at virtually the same level as native Swedes/

But what lessons can Sweden learn from its successful integration of Yugoslavian refugees? Perhaps the biggest takeaway from the experience is that a good match between the people coming in and the systems of their new home is worth its weight in gold. One thing was the harmony between the general makeup of those who came from former Yugoslavia to the Scandinavian country, and developments in Sweden, which was moving towards a knowledge-based economy at the same time.

Similarities in level of education was particularly vital to the long-term success: Yugoslavia’s education system, where primary schooling was compulsory until the age of 15 and students were encouraged to follow upper secondary education until the age of 19, was not dissimilar to Sweden’s, where school is compulsory until 16, and most pupils then go on to upper secondary school. But Sweden had a financial crisis in the 1990s. Of the Bosnians who were given a residence permit between 1993 and 1994, only 24 percent in the 20-59 age bracket had found employment after four years.

As the new millennium arrived things improved significantly, but with notable regional differences. So while by 1999, 90 percent of male and 80 percent of female Bosnian refugees aged 20-59 living in in Gnosjö, Gislaved, Vaggeryd and Värnamo were employed, the corresponding figure for Malmö was 37 percent and 28 percent respectively. The integration process for those who ended up in the southern Swedish city would have been quicker if they had been placed in regions with a better economic outlook from day one.

Can Mexico be more prosperous?

Thursday, September 6th, 2018

The supply of Mexican labor for the domestic U.S. economy is influenced by forces on both sides of the border, including the strength of the Mexican economy. The Economist recently analyzed the failure of the Mexican economy to perform better: “Between 1995 and 2015 real GDP per person increased by an annual average of 1.2%, less than in any Latin American country except Venezuela. Take into account the swelling labour force, and Mexico looks even worse: GDP per worker expanded by just 0.4% a year.”

This is despite an improvement in formal educational levels among Mexicans. As I posted recently, today a quarter for young people in their teens will end up going to college, three times a percentage of those who did in the early 1990s. The Mexican economy is now the 15th largest in the world and is projected to become the seventh or eighth largest by 2050.

The solution: change laws to make it relatively more attractive to hire salaried employees rather than to pay them as non-salaried self-employed workers.

Per the Economist, workers end up in jobs where they are less productive than they might be. Too many individuals who should be workers become entrepreneurs or are self-employed. Efficient businesses are taxed and penalised, while subsidies help sustain unproductive ones.

Mexico has a huge and disproportionate number of small businesses, and unusually wide variation in the productivity of its companies. More than 90% of the 4.1 million firms in the 2013 census had at most five workers. And 90% of the total were “informal”, absorbing 40% of workers.

Economist Santiago Levy distinguishes between firms that have salaried employees and those that do not. Four-fifths of the “informal” firms are in the second category: their staff are either self-employed or paid piece-rates or profit shares. These firms’ only legal obligation is to pay corporate tax, of just 2% of revenues. Firms with salaried workers, by contrast, must pay social insurance, deduct income tax and grapple with employment law (which doesn’t allow them to fire people if business drops).

Immigrants dropping out of support programs

Tuesday, September 4th, 2018

Politico reports that “Local health providers say they’ve received panicked phone calls from both documented and undocumented immigrant families demanding to be dropped from the rolls of WIC, a federal nutrition program aimed at pregnant women and children, after news reports that the White House is potentially planning to deny legal status to immigrants who’ve used public benefits. Agencies in at least 18 states say they’ve seen drops of up to 20 percent in enrollment, and they attribute the change largely to fears about the immigration policy.”

The Trump Administration is planning to expand the “public charge” criteria that is used to bar persons from permanent residence (green cards) if there is a risk of using public support programs –even though millions of low wage employees of Walmart, Amazon and other companies depend on SNAP (food stamps), Head Start and WIC to balance their budgets. The expected expansion of the criteria is a means to cut off permanent immigration of working class households. I have posted on this here.

Politico writes that in the past, if a mom was applying for a green card her own use of public benefits might be examined. Under the proposed change, her child’s enrollment in Medicaid or Head Start would weighed as a negative factor, even if that child is a U.S. citizen.

Politico goes on: Nutrition Program for Women, Infants, and Children — serves about half of all babies born in the U.S by providing vouchers or benefit cards so pregnant women and families with small children can buy staple foods and infant formula.

In some cases, immigration attorneys are recommending that families drop out of all government programs, including WIC, to avoid any chance that using the benefits could negatively affect their chances of getting a green card — or even prevent a family member from being able to get a visa to visit, according to caseworkers.

In January, the State Department instructed embassies and consulates to look at potential use of nutrition and health benefits when deciding whom to admit to the U.S.

Profile of Dallas and immigrants

Wednesday, August 29th, 2018

Dallas Morning News reports that Last year, Dallas created an Office of Welcoming Communities and Immigrant Affairs to ramp up the outreach. At a committee meeting last week, it unveiled a long list of goals developed with a task force of 85 contributors. Their ideas include boosting the number of naturalized citizens, increasing their participation in local government and promoting growth in minority owned businesses.

40.3% of Dallas’ population growth since 2011 has come from immigrants. They now account for almost 1 in 4 city residents, a higher ratio than in the state and nation.

Almost 70% of construction workers in Dallas are foreign-born, as are almost a third of the entrepreneurs. Immigrants are much more likely to have a college degree than the overall population….And a higher share of immigrants are working age, which is important as more baby boomers retire and fewer move here from other states.

Here is a New American Economy profile of immigrants in Dallas.

 

Goodlatte farm bill opposed by California farmers

Wednesday, July 25th, 2018

Representative Bob Goodlatte’s farm bill is being pushed by conservatives. It would create a new class of guest worker for farms, require employers to use e-Verify, and require all illegal workers to “touch back” outside the U.S. before being eligible for the new guest worker visa. I have described the bill here.

According to the Dept of Agriculture, 47% of the country’s farm workforce is unauthorized to work.

In a news article in March, the opposition by farmers was manifest. “We’re having constant communications with Republicans in Congress about this,” said Tom Nassif, president and CEO of the Western Growers Association, headquartered in Irvine, Calif. Like other industry groups, Nassif says his members support an overhaul of the H-2A visa program for seasonal workers that the Goodlatte bill proposes. But the legislation creates more problems, he said, including the so-called “touchback” provision requiring current workers to return to their legal country of residence.

California’s agricultural sector has a particularly high reliance on seasonal workers and those in the country illegally. “We don’t believe, after talking to our farmers, that people here with false documents are going to raise their hand … and touch back,” said Nassif. Combined with the threat of mandatory e-verify checks, California farmers fear those workers will simply flee, and “then we lose our entire workforce,” he said.

House Majority Leader Kevin McCarthy’s congressional district includes most of Kern County, the fourth largest farm county in the country.

Immigrants in construction — key facts

Tuesday, July 10th, 2018

In 2015, there were 25.7 million foreign-born workers in the U.S., making up 17.1% of the U.S. workforce. Among the major industrial sectors, the construction industry employed the highest percentage of foreign-born workers outside of agriculture. About 2.4 million construction workers, nearly a quarter (24.7%) of the industry workforce, were born in foreign countries

The majority (84.3%) of foreign-born workers in construction were born in Latin American countries in which 53.1% were born in Mexico, 6.6% in El Salvador, 5.4% in Guatemala, 4.7% in Honduras, 2.4% in Cuba, 2.1% in Ecuador, and a small percentage in other countries in that area. Europeans made up 7.3% of foreign-born workers in construction, and 6.4% came from Asia.

About 74% of foreign-born construction workers reported they were not U.S. citizens when the survey was conducted. In 2015, nearly 30% of construction workers spoke a language other than English at home. Among foreign-born construction workers, about 86% reported they spoke Spanish at home. Other languages spoken at home among foreign-born construction workers included Portuguese (1.8%), Polish (1.5%), and Russian (1.1%). In fact, less than 9% of foreign-born construction workers spoke English at home. Overall, more than 33 million workers in the U.S. spoke languages other than English at home in 2015.

From CPWR

 

 

Re-Definition of ‘Public Charge’ Could Drastically Slash Family Immigration

Monday, July 2nd, 2018

Thomas Ewing writes about a planned Executive Branch change in immigration policy for “public charges” which will severely impact immigrants with moderate to low household income. It would make them ineligible for green cards. It may lead to expulsions. He says, “If these measures are translated into federal regulations, the share of immigrants who would qualify as a public charge would skyrocket.”

The Migration Policy Institute says that Applying the definition of public charge outlined in the March 2018 leaked draft, MPI estimates the share of non citizens who could face a public-charge determination based on benefits use would increase more than 15-fold—from 3 percent under current policy to 47 percent under the terms of the draft rule.

The covered benefits are very popular among native-born Americans — 31% use them, per the  MPI which estimates that 36% of naturalized citizens use them and 47% of non-citizen immigrants use them.

The administration plans to add to the circumstances under which a non-U.S. citizen is deemed a public charge—meaning someone who depends on government means-tested benefits or is likely to depend upon these benefits in the future. Being a public charge is grounds for inadmissibility into the country, and—depending on how far the administration wants to take this—might even become grounds for deportation as well.

If the policy is implemented, an immigrant would also be considered a public charge if he or she utilized (or might have to utilize) for herself or for her dependents, even if American citizens, non-cash benefits such as Supplemental Nutrition Assistance Program (SNAP), Medicaid, and Children’s Health Insurance Program (CHIP).

Let’s look at SNAP beneficiaries. According to here, cross monthly income — that is, household income before any of the program’s deductions are applied — generally must be at or below 130 percent of the poverty line. 130 percent of the poverty line for a three-person family is $2,213. The poverty level is higher for bigger families and lower for smaller families.

The Federal minimum wage now is $7.25 per hour. Full-time work at this level yields monthly earnings of $1,256 monthly. The average monthly SNAP benefit is $254.

But a better way to look at SNAP eligibility is to see that for working age households, SNAP is often used during temporary periods of unemployment, such as for seasonal workers. The planned new policy will put at severe risk low income households in seasonal work.

The official page of the federal government on public charge is here.

Also go here.

 

Modern day slavery legislation

Saturday, June 30th, 2018

Not since the days of slavery have so many residents of the United States lacked the most basic social, economic, and human rights.”

The management of entirely unregulated trans-border labor force of millions of workers with low formal education, including recruitment and employment, has been driven by corporate employers in agriculture, textiles, and meat processing. From the early decades of the 20th Century, whole sectors of the American economy have been staffed by persons with to legal status. Their employers have defeated efforts to normalize the employment relationship. Programs to coordinate the North American economy, including NAFTA, left this trans-border workforce unrelated. Corporate employers have essentially kept the world’s largest trans-border workforce out of government oversight.

Rather than to regulate in a way consistent with 20th Century standards of worker protections and of dispute resolution, the United States practiced benign neglect on these employment relations, with some exceptions, and  tried and consistently failed to influence them indirectly by Mexican border control.

Immigration restrictionists have to come to terms with those employers who depend on these workers. Goodlatte’s Agricultural Guest Worker Act (H.R. 4092) would regulate the workforce by formally recognizing guest workers as persons of sharply diminished rights.

The bill would arm employers with overwhelming control over employment conditions, including mandatory arbitration, reporting within 72 hours if a worker quits, mandatory periodic return to country of origin with no obligation of the employer to pay for transportation, barring family members to accompany the worker, and barring of access to common supports for low wage workers such as SNAP food stamps, federal community health center care, and federally funded legal aid. The bill would essentially close of much of the farming workforce from U.S. citizens and create a closed pool of vulnerable temporary workers.

Farmworker Justice is at the forefront of tackling this bill.