Archive for the ‘Economics’ Category

Recent Mexican immigrants more likely to be college educated

Friday, July 12th, 2019

The share of Mexican immigrants with a college degree has increased in Texas. There are 145,000 persons from Mexico in Texas with a college degree. 45% of them are naturalized citizens. That’s 8% of the Mexican born population of the state, or 2.2 million.

Today almost one in five recent (since 2013) Mexican immigrants living in the state has a college degree versus 7% in 2000. This mirrors a nationwide trend that is increasing the level of educational attainment among recent Mexican and other immigrants. Temporary visa holders (ie business related) from Mexico are about 55% college educated.

Mexicans in Texas with a college degree tend to work in primary and secondary education and in construction.

There appear to be several factors driving these trends. First, educational attainment in Mexico has increased significantly. Another likely factor is rising violence in Mexico which reached historically high rates in 2017. This may be driving Mexican professionals to move to United States mostly living in border city such as McAllen and El Paso as well as nearby cities such as San Antonio

Finally many Mexican companies have made major investments in the US presence in the past decade, bringing senior executives and key personnel with them. Texas has led the way as a major destination in America for Mexican business investment.

However, 40% of Mexicans in the United States with a college degree have low English proficiency. This contrasts with the roughly 10% of college educated immigrants from other countries with low English proficiency.

From here.

Farmers desperate for guest workers

Tuesday, June 25th, 2019


“For us, there is no non-H-2A labor,” said Dennis Brawdy, partner with Amos Zittel and Sons in Erie County, New York, which employs 72 workers this year. “Three to five years ago, we were 100% non-H-2A because there was an adequate amount of workers around,” Mr. Brawdy said of the vegetable-growing and greenhouse operation.

As the U.S. has tightened border security in recent years, many agricultural companies that had relied on illegal immigrant laborers are turning to H-2A visas. More than 196,000 H-2A visas were granted in 2018, compared to about 89,200 in 2014, according to the U.S. Labor Department.

But getting H-2A workers is expensive. Farmers incur additional costs such as transportation, food and legal aid to bring them into the country, as well as guaranteeing them at least 75% of their pay. And once those workers arrive, the farmers also must provide housing and other amenities, unlike non-H-2A labor.

In addition, H-2A workers in New York are paid $13.25 per hour, more than the current minimum wage rates for areas outside of New York City, according to the Labor Department.

It costs farmers an average of about $1,000 per H-2A worker—just to get them to the farm, said Dulce Demay, of Demay Labor, which helps match potential workers with farmers, including apple farms. She has helped 40-plus New York farms switch to the H-2A program over the last couple of years, mostly hiring workers from Mexico, she said.

From the Wall Street Journal

Data from the WSJ and the Economic Policy Institute

More Hispanic and Asian men work

Friday, June 21st, 2019

Hispanic men have for decades had a higher labor force participation rate (percentage employed or looking for work) than have white men. Asian men used to have a lower rate in the 1990s but now have a higher participation rate than white men. Since the 1990s, the spread between these rates for Hispanic men and those of white men have increased, from roughly 4% to 8%. The Federal government projects that the gap will increase into the 2020s.(Go here).

The Wall Street Journal says that Labor participation among Hispanic immigrants with a high-school degree (72.2%) is nearly 20 points higher than similarly educated native whites (53.8%) and about equal to those with bachelor’s degrees (72.7%).


Massive increases in global remittance flows

Monday, June 10th, 2019

Remittances to low- and middle-income countries reached a record high in 2018 of $529 billion, up 9.6% from 2017, according to the World Bank. They are expected to reach $550 billion in 2019, making them higher than all foreign aid. Remittances can be equal to one fifth of country’s gross domestic product.

The global average cost of sending $200 is around 7%. New internet money transfer systems could greatly reduce these costs.

About 80% of the remittances from the United States (total outflow $68B) goes to Mexico and Central America. Total inflow of remittances (from all countries) to Mexico, Guatemala, Honduras and El Salvador rose 70% between 2010 and 2018 ($55.4B).

For analysis go here and for data for here.

poorly educated workers sort into different jobs by origin

Friday, June 7th, 2019

If  you are concerned about demographic isolation and low mobility of low wage immigrants, look here. Among those in the American workforce with low formal education, you find that immigrant and native-born workers are sorted into different jobs. On the whole, immigrants without a high school degree fill jobs that are relatively (1) not customer facing, hence do not demand high English proficiency and American cultural know-how, and (2) more dangerous. I suspect also lower mobility potential.

I looked at 20 jobs that do not require a high school degree, totalling 31 million jobs (2014 data). Five were jobs requiring a lot of communication and imposed little or no injury risk, such bar tending, waitress and cashier. 15% of these jobs were filled by immigrants. Compare that with 15 jobs requiring limited communication and generally higher injury risk, such as construction laborers, cooks, and inventory workers. Immigrants filled 30% of these jobs. Nationwide, 17% of jobs are filled by immigrants.

One job does not fit in: personal aide jobs have high communication demands, but 24% are filled by immigrants. A large percentage of immigrant direct care workers emigrate from two English speaking areas: the Philippines and Jamaica (go here).

A poorly educated immigrant worker tends to take a job which has double the injury risk of that of poorly educated native born worker.

How these new tariffs on Mexican imports will impact the U.S.

Friday, May 31st, 2019

“So we’re going to tax Americans until Mexico stops allowing people from Central America to exercise their legal right to seek admission to the United States?” (NY Times editorial today).

Two thirds of our imports from Mexico are within the same company, for instance vehicle related manufacturers who often bring together parts made in Mexico, Canada and the U.S. The new tariffs add internal costs to these firms.

22% of GM’s domestic car sales are for cars built in Mexico.  Mexico accounted for about one-third of GM’s production of the trucks.  About 18% of Fiat Chrysler autos were from there.  In all, $52.6 billion of vehicles and $59.4 billion in auto parts came from Mexico. (from here.)

U.S. imports from Mexico rose from 1994 (NAFTA) from $65 billion to around $295 billion in 2016. Exports to Mexico climbed from $68 billion in 1994 to an estimated $235 billion in 2016. Net trade imports from Mexico to the U.S. are overwhelmingly in production of vehicles – total cars and parts for buses, trucks and cars. (go here).

4.9 million American jobs are directly dependent on Mexican trade. These 556,000 jobs in California and 382,000 In Texas.

Top immigrant occupations

Tuesday, April 16th, 2019

About 17% of American jobs are filled by foreign-born workers. These jobs form an hourglass outline: highly paid workers in information technology and medical sciences, and lowly paid jobs such as in farming and construction laborers.  Jobs with low wages that are filled by many foreign-born workers tend to require little or no English proficiency — salon workers and farm workers, for instance.

Look for rising foreign-born work percentages in jobs that pay well but do not require much formal education and proficiency in English — examples being roofing and truck driving.

The graphic below separates out six jobs with extremely high foreign-born worker participation — one of th six is highly compensated –medical scientists.

Selected jobs with high foreign-born participation

From here and here.

Letter from two former American ambassadors

Friday, April 12th, 2019

“If you thought the caravans were bad, you ain’t seen nothing yet” was written on April 9 by James Nealon, former US Ambassador to Honduras and John Feeley, a former US Ambassador.


So you hate undocumented and irregular migration from Central America? Well you’re going to hate it more now that the President has cut off aid to Honduras, Guatemala and El Salvador, the countries from which the families and children we’re seeing at the southwest border are fleeing.

We have to ask ourselves, after seeing illegal border crossings drop to historic lows in 2017, why are we seeing a spike now? Three reasons: First, because we have a booming economy. As long as U.S. per capita GDP is 25 times that of Honduras, and as long as there are more jobs than job seekers, there will be a significant pull factor.

Second, though things have gotten better in the Northern Triangle (the murder rate in Honduras has been more than halved since 2012), all politics is local. For many people living in conflictive communities or rural poverty, things haven’t gotten better enough, quickly enough to meet their rising expectations.

And third, and maybe most importantly, the President doesn’t get that his own rhetoric is helping fuel the current surge of migrants at the border. The smugglers use the President’s own bombastic words as proof that the border is going to close and that if they don’t go now, it will be too late.

The reason we have “catch and release”, in which asylum seekers are released into the United States pending a far-in-the-future court date to adjudicate their case, is because those courts have a backlog of 800,000 cases. So rather than making a decision on an asylum request in real time, and repatriating those found not to have a valid case, everyone who makes a claim gets in, at least for awhile.

Rather than spend billions on a wall, rather than close the border, rather than cut off foreign assistance meant to fix the problem, why don’t we spend the resources necessary to fix the immigration courts? We wouldn’t tolerate an 800,000 case backlog at the DMV, so why should we tolerate it at the border?

Huge impact of immigrant Asians on social mobility

Saturday, March 30th, 2019

A major study performed by Harvard researchers found extremely strong upward mobility among children of low income immigrant Asian mothers. The retail store worker’s child who graduated from U.C. Berkeley is not an urban legend.

The researchers looked at the income rank in society of people in their late 30s compared to the income rank of their parents. The purpose of the study was to understand mobility – up, no change, or down – from the parents to the child. They studied patterns by geography and racial/ethnic groups. Of interest to me is that they compared the results of whether the mother was born in the U.S. or was an immigrant.

For whites, Hispanics, blacks and native Americans, there was virtually no difference in mobility of children of native-born or immigrant mothers. But for Asians the mobility is dramatically higher where the mother was an immigrant with relatively low income. That is, children of low income Asian mothers are far more likely to work their way out of low income status, compared to all other types of lower income households: native born Asian mothers, and whites, Hispanics, blacks and native Americans.

As reported here.

Toronto destination for high tech immigrants

Wednesday, March 6th, 2019

Toronto is the fourth hottest high tech talent market in North America, after San Francisco, Seattle and Washington, ahead of New York, Boston, Austin and the rest. This is partly due to the city’s comfort with immigrants (51% of residents are foreign-born) and to Canada’s more hospitable approach to skilled immigration.

Toronto’s population of software developers, engineers and programmers grew by more than half between 2012 and 2017. The 82,100 technology jobs it added over that period made it North America’s fastest-growing tech centre.

“There’s a chill going on south of the border,” says Toby Lennox, chief executive of Toronto Global, the group tasked with attracting foreign investment to North America’s fourth-largest city. “Right now we’re positioning ourselves to be a lot more welcoming.”

Canada already grants foreign students work permits for up to three years after graduation, and in June 2017 the country’s immigration and employment authorities launched what they called their Global Skills Strategy, with the goal of making it easier for employers to bring in highly skilled foreign workers.

Among its promises was that work permits for such individuals (and their families) would be processed within two weeks, subject to police and medical checks. Within little more than a year, more than 12,000 people had applied, of whom 95 per cent had been accepted.

Some had applied for American H-1Bs and been turned down

The most common professions among those admitted under Canada’s skilled worker policies were developers, computer analysts, university professors and software engineers.

From the Financial Times