Migrants in Russia have declined

The Financial Times reports that for Russia, migrants are a source of cheap labor for jobs that locals refuse to take on. For the central Asian states, migrants’ remittances contribute a substantial chunk of their gross domestic product and their departure helps to reduce unemployment at home.

In 2020, 11 million foreign persons lived in Russia. Of them, 3.3 million were from Ukraine and 2.6 million from Kazakhstan. in 2014, the year of the first Ukrainian invasion, remittances were $35B. They are now about $22B. It’s almost as if we went to war with Mexico.

But by early April there were 5.5m foreigners in Russia — 42 per cent fewer than a year ago Construction and agriculture were particularly badly affected.

“We have had very few migrants remaining over the past year. And we badly, badly need these migrants to implement our ambitious plans,” Kremlin spokesman Dmitry Peskov said last month.

Russia’s deputy prime minister Marat Khusnullin estimated the shortage of migrant workers in construction alone to be 1.5m to 2m people.

“Construction workers’ salaries were raised by 50 per cent due to labou shortages, and doubled in some places. But even while paying double it is extremely hard to find people,” he told local media. “We believe this is one of the key factors holding back construction development as a whole.”

If STEM workers get faster visas, what about nurses?


A late March survey reports that large majority of Americans say that we should admit more STEM (Science, Technology, Engineering Math) specialists in the country into the country. About 65% in favor, 25% opposed, 10% undecided.

The White House is considering a special pathway for Russian, and perhaps, Chinese STEM specialists to obtain permanent residency.

Two questions: First, how sure are we about the long term supply shortage of STEM specialists? (Go here.)

Second, can the same argument for more favorable visa policy also be applied to nurses, whose average wage went up by 9% in the past year (to $87K) , and about which there has been a practice for many years to recruit from other countries (Go here and here.)







What immigration adds to the labor force

A number of people have been estimating shortfall in our labor force due to the decline in immigration due to Trump and the pandemic from a prevailing level of about one million persons a year. The following passage (from here) estimates that the prevailing rate of 18 to 65 year old immigrants was about 660,000. At a labor force participation rate of 80% for this age cohort, that means that a half million persons were added to our workforce by immigrants every year. The passage below estimate a total shortfall due to immigration downturn of 2 million.

This is most acutely experienced in food and hospitality jobs, which today have an unfilled job rate of 13-15%, and in which 25% of the labor has been foreign born.

Trump and other Republicans sought to reduce immigration by about 40%. Call that a reduction in annual foreign-born labor force addition of say 200,000 from the 500,000 prevailing annual addition. Biden’s U.S. Citizenship Act of 2021 would in effect increase the labor force addition by roughly 200,000, to 700,000. The prevailing increase of the labor force by U.S. born persons is around zero.

The passage from Econofact is here:

This decline in immigrant and nonimmigrant visa arrivals resulted in zero growth in working-age foreign-born people in the United States. Prior to 2019, the foreign born population of working age (18 to 65) grew by about 660,000 people per year, as reported in data from the monthly Current Population survey (see the first chart). This trend came to a stop already in 2019 before the pandemic, due to a combination of stricter immigration enforcement and a drop in the inflow of Mexican immigrants. The halt to international travel in 2020 added a significant drop in the working-age immigrant population. As of the end of 2021, the number of working-age foreign-born people in the United States is still somewhat smaller than it was in early 2019. and, relative to the level it would have achieved if the 2010-2019 trend had continued, there is a shortfall of about 2 million people. A similar calculation done using Current Population Survey (CPS) monthly data on foreign-born individuals with a college degree indicates that of the missing two million foreign workers, about 950,000 would have been college educated, had the pre-2020 trend continued. This is a very substantial loss of skilled workers, equal to 1.8 percent of all college-educated individuals working in the US in 2019.

The border crisis and young men


NAFTA and is replacement, the USMCA, failed to address guest workers. The border cuts in two one of the world’s largest transnational circular labor workforces.

An important observation made by Sam Peak in Politico: that the many men are trying to cross the border for work. He writes.

“The overwhelming majority of people who are being expelled under the Title 42 policy haven’t been families seeking asylum, but rather single adults fleeing extreme economic deprivation and in search of work. In February alone, more than 90 percent of Title 42 expulsions were single adults — the vast majority from Mexico.

Mexican President Andrés Manuel López Obrador has acknowledged this reality and urged Biden several times last year to work with him to expand guest worker programs for the U.S., Mexico and the Northern Triangle. Though the Biden Administration recently suggested a willingness to do so, it has not yet provided any details.

It’s critical that Biden’s post-Title 42 strategy includes increased access to guest worker programs.”

Peak calls for reform of the guest worker programs, mainly I surmise the H-2A program for farm workers. (Go here and here.) He says “The program is already riddled with more than 200 time consuming, duplicative and complex rules that shut out many businesses. According to the State Department, the sponsorship process alone costs the average U.S. farmer more than $10,000.”

The large surge of illegal border crossings in the 1970s, which prompted the search for immigration reform leading to the 1986 act, was per Peak due to the ending of the Bracero system of guest workers.

The even greater surge of illegal crossings in the 1990s was due to ineptitude of this 1986 law. (Go here.)

What is going on at the Mexican border?


The Washington Post categorizes who is showing up at the Mexican border. An unduplicated count might be running at a monthly rate of 150,000 + a month,

Ukrainians: “About 15,000 Ukrainians escaping war have come to Mexico to be allowed across the border, and they are largely being welcomed and given one-year humanitarian parole in the United States.” This channel will be cut off when the United for Ukraine program is introduced (go here.)

People who cross and are not caught: say, 45,000 a month. “Border officials have acknowledged that anywhere from 1,000 to 2,000 of these border crossings a day are detected but not intercepted.” It seems highly unlikely that the Texas National Guard presence at the border –personnel with zero interdiction training or technology – have any role in containing this flow.

These are likely many single males responding to labor demand in the U.S. The nominal wage gain may be 400%, but after adjusting for cost of living, the wage gain will be far less. (Go here and here).

People who are apprehended and turned back, say, an unduplicated count of 50,000 a month. “Apprehensions” measures how many times the government encounters someone at the border who doesn’t have legal authorization to enter the country. there are very many repeaters. Most people apprehended at the border have been turned away, under the Title 42 public health code that Biden is ending soon: In the past six months, the government has apprehended, and then removed, people at the border some 549,000 times. For a history of the use of Title 42, go here.

People who are apprehended and then mostly processed as asylum applicants: say, 75,000 a month. “These are people who cross the border, get processed by immigration officials and who are let go to various ends, like applying for asylum. Over the past six months, about 500,000 people were taken into custody but not immediately expelled. Some were deported, but most remain in the United States pending a court hearing. It can take years for their asylum cases to resolve, and many people just end up staying in the country, under the radar.


Far easier for skilled people to migrate to Canada vs, U.S.

Stuart Anderson writes in Forbes Magazine that U.S. immigration law has become so inadequate that U.S. Citizenship and Immigration Services (USCIS) will reject up to 82% of the H-1B registrations for high-skilled foreign nationals submitted in the most recent H-1B lottery, according to the latest government data. In contrast, there is no numerical limit on high-skilled temporary visas in Canada under the Global Skills Strategy, and many high-skill temporary visa applicants are approved within two weeks.

The number of international students from India studying at Canadian colleges and universities increased 182% between 2016 and 2019 while at the same time, the enrollment of Indian students in master’s level science and engineering programs at U.S. universities fell almost 40%,” according to a recent National Foundation for American Policy (NFAP) analysis.

On April 15, 2022, USCIS reported that for FY 2023, it received 483,927 H-1B registrations. USCIS will reject nearly 400,000, or 82%, of the registrations for being beyond the 85,000 annual limit for H-1B petitions.

The Border crisis and young men


NAFTA and is replacement, the USMCA, failed to address guest workers. The border cuts in two one of the world’s largest transnational circular labor labor markets.

An important observation made by Sam Peak in Politico: that the many men are trying to cross the border for work. He writes.

“The overwhelming majority of people who are being expelled under the Title 42 policy haven’t been families seeking asylum, but rather single adults fleeing extreme economic deprivation and in search of work. In February alone, more than 90 percent of Title 42 expulsions were single adults — the vast majority from Mexico.

Mexican President Andrés Manuel López Obrador has acknowledged this reality and urged Biden several times last year to work with him to expand guest worker programs for the U.S., Mexico and the Northern Triangle. Though the Biden Administration recently suggested a willingness to do so, it has not yet provided any details.

It’s critical that Biden’s post-Title 42 strategy includes increased access to guest worker programs.”

Peak calls for reform of the guest worker programs, mainly I surmise the H-2A program for farm workers. (Go here and here.) He says “The program is already riddled with more than 200 time consuming, duplicative and complex rules that shut out many businesses. According to the State Department, the sponsorship process alone costs the average U.S. farmer more than $10,000.”

The large surge of illegal border crossings in the 1970s, which prompted the search for immigration reform leading to the 1986 act, was per Peak due to the ending of the Bracero system of guest workers.

The even greater surge of illegal crossings in the 1990s was due to ineptitude of this 1986 law. (Go here.)



Tech workers flee Russia. Will they come to the U.S.?

Information technology employs a global workforce. A lot of tech workers in Russia are leaving. (I expect this has happened in Ukraine as well.) Where will they land?

The NY Times reports that “by March 22, a Russian tech industry trade group estimated that between 50,000 and 70,000 tech workers had left the country and that an additional 70,000 to 100,000 would soon follow. They are part of a much larger exodus of workers from Russia, but their departure could have an even more lasting impact on the country’s economy.

The exodus will fundamentally change the Russian tech industry, according to interviews with more than two dozen people who are part of the tightknit community of Russian tech workers around the world, including many who left the country in recent weeks. An industry once seen as a rising force in the Russian economy is losing vast swaths of its workers. It is losing many of the bright young minds building companies for the future.”

The United States benefits enormously from the global nature of technical talent. The trends since the 1990s have been favorable.

The United States has a large lead over all other countries in top-tier AI research, with nearly 60% of top-tier researchers working for American universities and companies. The US lead is built on attracting international talent, with more than two-thirds of the top-tier AI researchers working in the United States having received undergraduate degrees in other countries.

In 1994, there were 6.2 U.S.-born workers for every foreign-born worker in science and engineering occupations. By 2006, the ratio was 3.1 to 1.

The enemy of our harvesting this talent is ourselves. 200,000 Green cards were wasted, unused, in FY 2021, due to inefficiencies within the U.S. Citizenship and Immigration Services.

Also go here.

the H-1B program and the growth of the Indian IT sector

The H-1B skilled worker temporary visa program started in 1952, Today’s version was launched in 1990 with a cap of 65,000 visas (for up to six years). The visa was established for workers in a “specialty occupation”. The Immigration Act defined a specialty occupation as “an occupation that requires theoretical and practical application of a body of highly specialized knowledge, and attainment of a bachelor’s or higher degree in the specific specialty (or its equivalent) as a minimum for entry into the occupation in the United States”. The cap was raised in 2001 to 195,000, soon returned to 65,000, with some exemptions to the cap. For a description, go here and here.

From a study of the impact of H-1B visas on the Indian and U.S. workforces:

Not only did the H-1B program play a significant role in spreading the IT boom from the U.S. to India but it also affected workers’ choice of occupations in each country, and on average made workers in each country better off.

In 1994, the fraction of foreigners in U.S. computer science occupations was 9% but rose to 24% by 2012, almost entirely driven by Indians. By 2014, 70% of all H-1B visas were acquired by Indians. [Lack of English proficiency explains why only 5% of H-1B visas have gone to Chinese.] Computer science wages are at least 4-10 times higher in the US than in India.

The H-1B visas also expired after six years, and many workers return, bringing with them newly acquired skills, connections and technical knowhow. Over time, this has facilitated a shift in production from the US to India, and eroded the US’s advantage in IT exports. Every good valued by consumers can either be produced in the US, India or somewhere else in the world and consumers will buy from the most efficient producer. India and the US are therefore competing to sell their goods to a larger share of the world market.

We find that the H-1B programme played a rather significant role in spreading the IT boom from the US to India. The possibility of moving to the US encouraged Indian workers and students to acquire skills valued abroad, and along with those that returned from abroad, they contributed to growing the CS workforce in India. This facilitated a movement in tech production from the US to India: Indian IT output is higher by 5 percent in 2010, even as US IT output shrinks.

This hurts some US workers, especially US-born computer scientists who now switch into non-CS occupations, lowering the size of the native CS workforce by 9 percent in 2010. Overall, however, world IT output is larger by 0.45 percent and the combined income of both countries is higher by 0.35 percent (or about US$17.6 billion) because of the H-1B programme. We find that the average worker in both the US and India is better off with immigration.

From an interview with Arvind Subramanian, former Chief Economic Advisor to the Government of India:

“The IT-services revolution owes to an accidental sequence of events, including the relaxation of US immigration restrictions in the 1960s and expansion of the H-1B visas subsequently, the early investment in India’s educational centers of excellence (the famous technology and management schools, IITs and IIMs, respectively) and English language proficiency (the colonial inheritance). When the IT revolution occurred, Indian talent had acquired not just a foothold but also a reputation in the US which then gave comfort to US firms to tap the English-language speaking talent pool back in India. “

Global Skills Partnerships

Addressing demographic imbalances and future migration pressure….I wrote about imbalances and the U.S. workforce in 2009 and in 2021. Global Skills Partnerships can address this.

An example using healthcare workers:

The World Health Organization (WHO) estimates that by 2030, the global shortage of healthcare workers will reach 14.5 million people. While all countries are facing shortages, the composition of these shortages is different. For example, many African countries need more primary care nurses, and many European countries need aged-care nurses. Promoting more training and migration in these areas is one way to increase the global stock of health workers.

Example of a partnership between Morocco and Belgium:

This project is called PALIM and is currently in the pilot stage. They are training 120 people in specific Information and communication technology skills in need in both Belgium and Morocco. 40 have chosen to join the “away” track and will move to the Flanders region of Belgium, and the other 80 will stay in Morocco. They are now looking to expand the programme to 400 trainees across Morocco and Tunisia, and have spoken about similar projects in Guinea and the Gambia.