Archive for the ‘Economics’ Category

Ban on temporary work visas – H-1B visas

Friday, July 10th, 2020

I turn again to Asel Mukambetova of Selflawyer, here to summarize the impact of the Trump Administration’s ban on temporary work visas.

Asel’s assessment: President Trump passed an executive order on June 23, 2020 temporarily banning all new work visas issued to foreign nationals until the end of 2020. Suspended work visas include H-1B, used by U.S. tech companies for highly qualified foreign professionals, and four other visa categories. All told, Trump’s executive order can bar the entry of up to 525,000 foreign workers.

Before this ban, H-1 visa denials skyrocketed between FY 2015 and 2020. The number of RFEs (Request for Evidence) issued also showed a drastic upward trend for the same period. Between FY 2015 and FY 2019 shows that USCIS increased its RFEs by 64% and denial rate by 82%.

The software industry alone creates 14.4 million jobs and contributes $1.6 trillion in the total value-added GDP of the U.S. economy. The computer-related sector employs the highest percentage of the H-1B workforce. Top U.S. tech firms like Google, Twitter, Facebook, Amazon among others rely on employment visas like H-1B, to hire critically needed tech workers from overseas. This allows them to maintain global competitive standards, which in turn boosts the economy and helps create millions of jobs for American citizens.

Trump’s ban will discourage companies from locating their branches in the U.S., creating opportunities for countries like Canada and Australia.

PFR: I have posted often on H-IB workers and stem workers. This in 2017: The nation’s STEM workforce that is foreign-born doubled from 11.9% in 1990 to 24.3% in 2015. They account for 47% of STEM workers with advanced degrees.

Housecleaning workers in America

Saturday, June 27th, 2020

Computer engineers and physician workforces in the United States would fall into severe shortages without foreign-born workers. That is also the case with housecleaners. Housecleaning is a good example of a personal service that Americans want done and for which the supply of labor is inflenced if not dominated by foreign-born workers with few job options. Most would not qualify for a green card today per Trump administration rules. 

There are about 350,000 full time housecleaners in America. Half of them are foreign-born non-citizens, which is far more than their 8% share of total employment in the U.S. About 3% of female non-citizen workers are housecleaners, compared to one third of one percent of all other female workers.

Housecleaners make about $12 an hour. 39% of housecleaners did not graduate from high school. While about half of all workers get health insurance through their employer, but only 7% of housecleaners do. 17% of all workers earn below 200% of the poverty level; 55% of housecleaners do. Earning under the 200% of poverty level generally indicates that with the “public charge” rule changes earlier this year would place the person at risk of being a public charge. See this recent post on low income households and federal supports.

Mostly from the Economic Priorities Institute, here.Also here.

Making sense of the latest immigration order

Wednesday, June 24th, 2020

This is how we, in a country with by far the largest foreign-born population in absolute numbers and share, go about making immigration policy.

On June 22 the administration continued and expanded until year end a halt on some of the most important classes of temporary visas, effective today (June 24). What to make of this?

The United States is the only country that has used the pandemic to restrict immigration expressly on economic, rather than public health, grounds.

The earlier April 22 order stopped some green card processing, on the grounds that green cards bring in people who compete with American citizens for jobs. The order is not backed up with any analysis. This order may have shut down over 300,000 green cards from being issued in the next 12 months, compared to about one million green cards issued in each recent years.

The June 22 order targets temporary visas, such as H-1Bs. Today the Wall Street Journal wrote, “….the vast majority of H-1Bs—which are capped at 85,000 a year—are for computer programming. The unemployment rate for these occupations was 2.5% in May compared to 13.3% for the entire economy. The Labor Department’s JOLTS survey found 122,000 information industry job openings in April, slightly more than the year before.”

Two things worth noting.

The executive branch can make up the facts and assessments as it goes along. No agency of the Executive Branch or the Congress is tasked to provide on-going assessment of the impact of immigration on labor markets. This has applied to every past administration.

And, Trump is following on with Obama’s immigration policy-making, which is to use executive orders to make sweeping changes in policy that should be in the scope of Congress.

Congress was paralyzed over immigration policy during the first two decades of the 21st century. At least three bipartisan efforts in the Senate, including in 2007, 2013 and 2017, failed. Especially after 2010, the politics of immigration became polarized.

El Salvador’s crisis in remittances

Wednesday, June 24th, 2020

Remittances to El Salvador, the vast majority coming from the U.S., are collapsing due to the pandemic. In. 2019 the country received $5.6 billion in remittances, more than the country’s annual exports, and equivalent to 20% of GDP. In 2009, remittances dipped about 10% from 2008 due to the recession, but then resumed their annual increases.

April 2020’s remittances were 40% below April 2019.


Data from here.

Meatpacking plants update

Saturday, June 13th, 2020

“As of June 9, there have been at least 24,000 reported positive cases tied to meatpacking facilities in at least 232 plants in 33 states, and at least 86 reported worker deaths at 38 plants in 23 states.” Tyson Foods among meatpacking companies reported by far the greatest number of cases. (From here.)

A May news article said that immigrants make up nearly 40% of the meatpacking (or meatprocessing) industry’s 470,000 workers with higher concentrations in states like South Dakota, where they are 58% of workers and Nebraska, where they are 66%,. Estimates on illegal immigrants very from 14% to the majority in some plants.

Meatpacking is one of the top concerns in the country for occupational safety.

A Southern Poverty Law Center report in 2013 focused on the speed of the production line: “An overwhelming majority of workers surveyed, 78 percent, asserted that “line speed makes them feel less safe, makes their work more painful and causes more injuries.”

The GAO concluded a 2017 report on meatpacking plants that “worker safety and health problems persist and improvements are needed in identifying worker concerns, strengthening federal collaboration, and protecting workers from certain chemicals. Workers we spoke with reported they are reluctant to report injuries, illnesses, and hazards because they fear losing their jobs. There is a mismatch between concerns we heard from workers and the problems reported by OSHA, particularly in the area of bathroom access.”

The Federal safety net: what citizens and non-immmigrants need

Sunday, June 7th, 2020

Roughly 20% of native-born households need federal support to survive and 35% of immigrant families need this support. Here is how I arrived at this conservative estimate, in the briefest possible words.  

Despite a relative increase in immigrant wages vs native born Americans (go here), there are a disproportionate number of immigrant workers in low paying jobs – say under $13 an hour. The restaurant and farm industries have median wages at that level or lower. The average wage at Walmart is about $14.50 an hour.  If you want to experience vacariously the contribution of low wage immigrant labor today, eat at a restaurant or, more simply, just eat.

Below 200% of federal poverty level, a household basically depends on federal support in food, housing and healthcare to survive. This is column D in the table. The family with a household annual income of under 200% of the federal poverty level is at or below $43,400.

A family of three with both parents earning $14.50 an hour full time (Walmart) has an annual income of $60,350 (col A).

A family, both parents earning the hourly wage of $13 an hour, has an annual income of $54,080 (col B). This wage approximates what the 25th % percentile of high school graduates (ie. 25% from the bottom) make.

Assume that in the Walmart couple, one works half time (perhaps due to disability or to care for the child or parent). The household has $45,240 in income (col C), which is 4% over the 200% poverty level.

Now let’s look at households where both parents left school before completing high school. 28% of immigrants fill that category. They make (estimated from gov’t tables) about $11.75 an hour. The household annual income, with one working half time, is about $37,000 (col E) or 85% of the 200% poverty level.

Summing up, roughly 20% of native-born households need federal support to survive and 35% of immigrant families need this support. These are rough, and perhaps conservative, estimates.

Data sources here, here, here and here.

One indication that the estimate is conservative is that many more people circle in and out of poverty than are in poverty at any one time.  A study of persons at 100% of the federal povety level found that “while 11 to 13 percent of people are in poverty in any single year based on after-tax income, 4 in 10 people spent at least one year in poverty over the 12-year period from 2007 through 2018.”

Use of the 200% federal poverty level is discussed here.


Immigrants in the IT field – what states depend on them

Saturday, May 30th, 2020

One out of four workers in information technology are foreign-born, according to The New American Economy, which estimates the total IT workforce at 4.8 million (definitions of the workforce differ). Compare this with economy-wide share of foreign workers – 17%.

A curtailment of skilled foreign workers will adversely affect those states who depend heavily on these workers in IT. Some states depend greatly on these workers, especially the ones with large IT workforces, implying that recruiting large numbers of IT workers means relying more on foreign workers.

The ten states with the highest number of total IT workers have on average 3.5% of their workforce in the IT sector, compared with an average of 2.7% in the other 40 states. In these ten top states, 30% of the IT workforce are foreign born. The table below lists the ten states with the largest total IT workforce and the foreign worker percentages.

Not included in these top states are these states with high foreign shares of their IT workforces: CT (33% and MA (29%).

California’s pandemic relief for unauthorized persons

Friday, May 22nd, 2020

On April 15, California Governor Gavin Newsom announced a $150 million financial relief program for unauthorized “working” persons in the state, most or all of whom are ineligible for unemployment insurance and pandemic disaster relief. This sum is far too little to come close to matching the federal CARES Act support for legal Americans, but the programs are not entirely comparable. Let’s look at the figures. The program, summarized here, opened its doors on May 18 to a stampede of applicants.

Whom is the program targeted at?

The Public Policy Institute of California estimates there are 2.5 million unauthorized persons in the state, a number which has been slightly declining since 2008. About 70% of them are Mexican-born. Many live in households with at least one citizen, for instance another adult who is eligible for unemployment compensation. But (posted here) couples with an unauthorized partner are locked out of federal pandemic aid.

There are about 1.75 million unauthorized workers in the state, and many of them who are on a formal payroll (perhaps half?) likely get state unemployment compensation. And many will be retained at work during this stage of the pandemic through the CARES employee retention credit and other employer-directed programs.

How generous?

The CARES Act provided about $600 billion in financial relief for persons (earning under a high cap)….I roughly guess 90% of legal Americans, say 275 millions, thus equivalent to about $2,000 per person. (Here and here).

California’s program at $150 million is set against 1.75 million persons. That comes to say $100 per unauthorized worker. But the Newsome program was budgeted for up to $500 in individual assistance and a $1,000 in household assistance, in effect for 150,000 persons, or less than 10% of the unauthorized workforce. When the program opened May 18, the intake systems crashed.

Newsom policy announcement of April 15 here.

The unheralded rise of immigrant worker status since 2000

Wednesday, May 20th, 2020

Compared to 2000, the foreign-born workforce today is a greater share of the total workforce (from 12.7% to 17.4%), is much better educated, and has narrowed the gap with native American wages.

These trends affect American society more than is understand by the established media. I believe this rise plays a role in white “distress.” The immigrant population has gained on whites in social and economic status.

The rise is driven in part by the role of foreign-born workers in the American information technology industry and medicine; by increasing migration from Asia, and by leveling off of net immigration from Latin America (although recent Hispanic immigrants are much better educated than in the past).

The foreign/native worker disparity in median wages narrowed 2000 to 2019, from 29% lower to 15% lower (males):

The share of all foreign-born with less than a high school degree declined from 33% to 24% (still very high). The share of those with at least a college degree rose from 26% to 35%. Note the reversal:

Karl Marx said societies (economic and social relations, politics) are led by their most advanced “process of production.” Since 2000, migrating workers have focused more on our most advanced process: knowledge work. Nationwide, one quarter of practicing doctors are foreign born, and 23% of all science and engineering workers are foreign born (40% in California).

Most data for 2000 and 2019. Data on science and engineering here.

The essential workforce and immigrants

Friday, May 15th, 2020

Thanks for Jeremy Neufield of the Niskanen Center I have estimates of the participation of immigrants in some major essential industries. This posting shows immigration participation by industry.  An earlier posting showed participation by selected occupations. 

The shares for six essential industries: Grocery, convenience, and drug stores (“groceries”) 16.4%, public transit 15.9%, Trucking, warehouse and postal services (“trans”) 18.5%, Building cleaning services (“building”), 38.1%, and Childcare and social services (“childcare”), 17.9%. Overall immigrants make up 18% of the labor force and 18.2% of the essential labor force.

In addition, Immigrants comprise half of front lines workers at meat processing plants, most have less than high school or high school education, and perhaps a half have less than proficient English.