Archive for the ‘Economics’ Category

Unauthorized workers and the future of the American economy

Thursday, November 19th, 2020

The 160 million person workforce of the country includes roughly 8 million unauthorized workers who are predominantly with little formal education and very restricted as to their ability to progress into well-paying jobs, to buy household assets, and to demand good working conditions. This is a captive workforce, one which perpetuates low productivity jobs and social indignity.

A friend in London told me the story of the Midland Grand Hotel, which opened in about 1865 next to St. Pancras Station. Five stories tall, it was the epitome of luxury, coal fires every room, even elevators. But as there was no central plumbing a battalion of servant girls was required to haul coal and hot water up to the rooms and carry down full chamber pots. During World War One, women were hired to work in factories. They did not want to go back to domestic service, with its low pay and demeaning social status. The hotel was forced to close

It reopened in the 2011, without the servant girls.

Rising economic status of Hispanic workers

Thursday, October 29th, 2020

The median real (i.e. net of inflation) weekly wages of Hispanic men have improved by 20% between 2000 and today; for Hispanic women, by 17%. But half of that growth has taken place after 2013. Since then, Hispanic incomes have risen faster than those of whites, blacks and Asians.

A 2018 study of intergenerational economic mobility reports that “Hispanics have relatively high rates of absolute upward mobility and are moving up significantly in the income distribution across generations.”

Remittances to Mexico have grown by a lot

A fair indicator of the trends in economic fortunes of Mexican immigrants in the U.S. (legal, unauthorized, naturalized or not) is the trend in remittances from the U.S. to Mexico. The chart below shows that this amount grew significantly in the 2000s, declined and leveled off due to the 2008 financial crisis, and has grown by a lot during Trump administration. This most recent trend is consistent with the trend in Hispanic wages.

Does this translate in more Republican Hispanics?

The only Hispanic community with a distinctly pro-Republican presence is Cuban. The basic issue however is that Hispanics have relatively much lower rate of voting.

Trump Administration tightens H-1B rules

Thursday, October 22nd, 2020

The Trump Administration is undertaking to severely constrain the use of H-1B visas. This visa program was created in 1990 for professional level temporary workers. This visa lasts for up to six years. Indian and Chinese workers in STEM fields have dominated the flow. The program, set at 85,000 new visas a year, attracts far more applicants than allowed by the cap.

The Administration is issuing new rules which constrain the problem in at least two ways. First, the rules are being changed to force a more narrow match between the applicant’s qualifications and the occupation the applicant will fill. Second, the wage paid to the applicant will need to meet a higher threshold of “prevailing wage,” i.e. be paid more,

The Administration has already restricted the right of a H-1B visa holder’s spouse to work in the U.S. 

Since the 1950s the use of skilled foreign workers has been debated, with waves of arguments for or against there being a labor shortage in the U.S. Two indicators are often referred to. One, are the wage levels in the occupational categories under consideration (such as computer scientists) going up significantly higher than average wage increases? Second, are the unemployment rates of the occupational categories relatively low? A “yes” answer to both questions can be taken an evidence that a labor shortage exists.

The case for importing skilled workers when both answers are “yes” is bolstered by a contention that in these skilled fields, the addition of a foreign-born worker leads to further job openings to be field by U.S. citizens.

I doubt the arguments for or against temporary foreign skilled workers are often overwhelmingly strong in one direction or another. This makes it particularly costly that Washington does not have an agency which tracks, studies and makes projections of labor demands and foreign workers.

for stories of these recent rules, go here and here.


The higher educated immigrant

Wednesday, October 14th, 2020

Since 1990, foreign-born persons accounted for upwards of 25% of the net increase (additions minus retirements) of college educated persons in the workforce. This is despite foreign born persons being only about 14% of the entire population and 17% of the workforce in 2018.

This means that computer scientists, doctors, business executives, etc. from India, China, Philippines, Mexico, etc. (The leading sources of college grads) filled one of every four openings for college grads since 2000.

The entire labor force became more highly educated. The share of the labor force with at least a college degree went from 23% in 1990, to 27% in 2000, to 37% in 2018.

But immigrants are even more educated. College educated foreign-born accounted for half of the gain in foreign persons in the U.S. between 2000 and 2018.

A quarter of college educated foreign born persons are in either computing or healthcare. Half of are Asian origin. A quarter live in California. NY, FL and TX combined account for another 30%.
from Migration Policy Institute

Local roadmaps for immigration

Sunday, October 11th, 2020

The New American Economy’s Gateways to Growth program has helped 54 communities in the U.S. to assess and plan for integrating immigrants into their communities. For example, here are excerpts from Bowling Green, KY’s plan:

Bowling Green is the fastest growing city in Kentucky with a 21% growth rate from 2000-2010 with an additional 15% growth between 2011 and 2016. 32.3% of the County’s growth from 2011 to 2016 was attributed to New Americans. Many were refugees.

With a Gateways to Growth grant, the City of Bowling Green created a steering committee. Represented on the committee were government, business, social service, non-profit, entrepreneurs, faith-based, education (K-12, post-secondary, and adult education), public safety, health care, refugee resettlement, housing, and workforce development. The result was a roadmap with many initiatives, including a selection as follows:

Create a liaison position that will connect community stakeholders, businesses, workforce, and Chamber of Commerce partners.

Develop mentorship program to connect New Americans to business professionals and Entrepreneurs

Promote pathways to skilled trades

Support foreign- credentialed New Americans with credential evaluation and state licensure pathway navigation

Promote Adult English Language Learning

Create affordable and safe housing options for New Americans

Providing training on mortgages/loans, rent/ utilities payment, taxes and Insurance

Improve access to health services

Promote and Enhance Civic Engagement

Target: 1,700,000 new green cards a year vs. 780,000 in 2020

Friday, October 9th, 2020

The annual growth in the U.S. civilian labor force has declined from 1.2% in the late 1990s to a projected 0.4% in the next ten years. Half of that growth today is due to immigration. As births are now below replacement rate, labor force growth in the future will trend into negative territory except for immigration. For the U.S. to return to at least a 1% annual growth in the labor force, we will probably need to more than double our immigration flows.

An immigration goal might look like this: design the flow of immigrants so that the net annual flow results in 70% of them joining the labor force when they receive their green card (if they are not working here already). Aim for that 70% to equal or exceed 0.75% of the current workforce. This 0.75% today equals 1,200,000 a year. That translates into (1,200K/.7) = 1,700,000 new green cards a year.

A second Trump term will drive immigration down further. A Biden Administration may lead to embracing a this kind of goal. Democrats however do not articulate a coherent immigration strategy in their platforms. For a nation of immigrants, there exists no progressive strategy on the table.


The Congressional Budget Office just issued a revision of its longterm forecasts. It has lowered its near-term immigration flow by about 20% and it has lowered its labor force increase projections through 2050. Female fertility in the U.S. today is about 1.6 children per female, well below the replacement rate of about 2.1 per female. This bodes for a near-zero annual increase in the labor force when today’s children become adult. The ONLY reason the labor force will increase will be through immigration.

Translating an annual flow of new green cards – perhaps about 790,000 today – into labor force additions requires us to estimate how many of these new recipients join the labor market. With the limitation information provided by the CBO in its new report, I can’t do that. However, it offers a shortcut. The CBO says that net annual immigration in 2020 is 2.9 per 1,000 people in the population.

Countries trying to manage their emigrants

Saturday, September 19th, 2020

Southeastern Europe has been experiencing a gradual, sustained decline in population in part due to emigration.

Bulgaria has a population of 7 million. There are 700,000 Bulgarians living in Turkey and 300,000 living in Germany. In total, the number living outside the county equal one fifth of those living in the country. By 2050, Bulgaria will lose one quarter of its population due to low birth rates and emigration. Remittances from outside the country into Bulgaria rose for $60 million in 2000 to $467 million in 2019, account for over 3% of the country’s GDP in 2019.

Albania has for many years had many of its citizens live outside the country. Remittances to Albania in 2019 was 9.4% of the country’s GDP. The number of Albanians living outside the country equal 40% of persons living inside Albania.

The Migration Policy Institute says that some countries have been trying to expand their outreach to their emigrating populations, beyond cultural programs, but few economic programs are in place. This contrasts with the Philippines, which has long supported their citizens who work outside the country.

Portugal is possibly the most active European country to promote the return of emigrants and immigration of non-nationals. The Portuguese emigrant population equals 25% of the population of the country.

The Indian community in Middlesex County NJ

Friday, August 28th, 2020

Middlesex County, just west of New York City, is an example of a local area where immigration has surged, especially South Asian, with employment gains in many sectors. It compares with Cupertino, CA, a center of Asian immigrants in California. Rutgers University and bio-medical employers dominant the economy.

Between 2013 and 2018, the immigrant population in the county increased by 8.6%, while the overall population increased by 0.1%.

It is the largest and most diverse South Asian cultural hub in the United States (Wikipedia). Monroe Township celebrates Diwali as a Hindu holiday. Carteret Borough’s Punjabi Sikh community, is the largest concentration of Sikhs in New Jersey. The County prints election ballots  in English, Spanish, Gujarati, Hindi, and Punjabi.

While representing 34.5% of the total population (most from Asia), immigrants represented an outsize share of workers in industries such as professional services (54%), wholesale trade (52%), transportation (51%) and manufacturing (50%).

Go here.

The rise of the Indian immigrant elite in the United States

Thursday, August 20th, 2020

Kamala Harris’ vice president candidacy shines a spotlight on the Indian immigrant population, which grew from virtually nothing in 1980 to 2.4 million as of 2015. 45% are naturalized citizens. Harris’ mother, who started graduate school at Berkeley when she was 19, in about 1957, was a very early Indian educated immigrant. (Atul Gawande’s physician parents immigrated in the early 19609s.)

In 2015, 77% of Indian adult immigrants had a bachelor’s degree or higher, compared to 29% of all immigrants and 31% of native-born adults. Among college-educated Indian immigrants, more than half had an advanced degree.

Indian immigrants have a much higher economic status than other immigrants and the average native-born person. Households headed by Indian immigrants had a median income of $107,000, compared to $51,000 and $56,000 for overall immigrant and native-born households, respectively.

As for type of employment, 73% were employed in management, business, science and arts, compared with 31% of all immigrants and 38% of native-born workers.

The Silicon Valley Elite. Indian entrepreneurs in Silicon Valley not only build ventures in the United States, but they are also wired into a huge global network of entrepreneurs. 

Indian venture capitalists from around the world were behind the founding of The Indus Entrepreneurs in 1992 It worldwide board is composed of Indians. Some 10,000 members are scattered through 62 countries. It describes itself as follows: TiE connects the entire entrepreneurship ecosystem from early stage entrepreneurs, serial entrepreneurs, professionals at leading corporations, venture capital, angel investors, thought leaders among others.

Some of the Indians who have co-led high tech ventures in the United States are graduates one of the six Indian Institutes of Technology, created in the 1940s. These graduates often invest in ventures founded by other graduates of these universities.

Black domestic workers and COVID

Wednesday, August 12th, 2020

The Institute for Policy Studies’ Black Worker Initiative conducted a survey on May 19-June 6, 2020 of 800 Black immigrant domestic workers in Massachusetts, Miami-Dade County and New York City. on the impact of COVID-19 on Black domestic workers. The study does not define country of origin so I guess it means immigrants from Africa and the Caribbean. Most worked in childcare or home cleaning. The percentage undocumented were MA 7% , Miami-Dade 45% and New York City 48%.

Job Loss. 70% either lost their jobs (45%) or received reduced hours and pay (25%).  Undocumented workers were nearly twice as likely as documented workers to be terminated (64% vs 35%). 67% of undocumented workers reported that their immigration status had a negative impact on their ability to find new work.

Housing Insecurity. 65% said that they are fearful or at risk of eviction or utility shut off in the next three months.
No Safety Net. 76% of undocumented workers were fearful of seeking assistance or resources from the federal, state, or local government due to their immigration status.

Lack of Medical Insurance. 51% of respondents (and 88% of undocumented workers) reported that they do not have medical insurance. In Miami-Dade, 100% of undocumented workers report that they lack health insurance, compared to 42% in Massachusetts.