Archive for the ‘Economics’ Category

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

Picking strawberries by machine instead of immigrant worker

Saturday, March 2nd, 2019

Mechanization of produce farming is moving ahead, notably with strawberries, which are easy to crush. Half of hired farmworkers today are unauthorized workers.

The Washington Post reports that the future of agricultural work has arrived here in Florida, promising to ease labor shortages and reduce the cost of food, or so says the team behind Harv, a nickname for the latest model from automation company Harvest CROO Robotics.

Harv is on the leading edge of a national push to automate the way we gather goods that bruise and squish, a challenge that has long flummoxed engineers. Designing a robot with a gentle touch is among the biggest technical obstacles to automating the American farm.

“The labor force keeps shrinking,” said Gary Wishnatzki, a third-generation strawberry farmer. “If we don’t solve this with automation, fresh fruits and veggies won’t be affordable or even available to the average person.”

Who are the workers today? These figures are from the National Agricultural Workers Survey for 2015- 2016:

Sixty-nine percent of hired farmworkers interviewed in FYs 2015-2016 were born in Mexico. 49% are unauthorized. On average, foreign-born farmworkers interviewed in 2015-2016 first came to the United States 18 years before being interviewed. Most respondents had been in the United States at least 10 years (78%),

In 2015-2016, 77 percent of farmworkers said that Spanish was the language in which they are
most comfortable conversing. 30 percent of farmworkers reported that they could not speak English “at all”. 41 percent of workers reported they could not read English “at all”.

The average level of formal education completed by farmworkers was eighth grade. Four percent of workers reported that they had no formal schooling and 37 percent reported that they completed the sixth grade or lower.

50 years of ethnic workforce change in NYC.

Wednesday, February 20th, 2019

For entry-level positions in New York City: Circa 1940, the workforce was 66 percent black native workers, 6 percent Hispanic foreign-born, and 2 percent Asian foreign-born. But by 1990, those numbers had significantly shifted, with the black native-born population comprising only 30 percent of the workforce, compared with Hispanic foreign-born at 20 percent and Asian foreign-born at 15 percent.

Cited by Amy Wax, Low skilled immigration: the case for restriction, American Affairs, Winter 2017.

National workforce growth and tight labor markets

Monday, February 18th, 2019

I shared the other day that Utah’s labor force—the number of people ages 16 and over holding or seeking a job—has grown an average of 1.9% a year from 2010 through January 2018, more than triple the nation’s 0.6% pace. Let’s put this in larger context.

Annualized working age population growth for 2000 through 2020 and 2020 through 2040 for areas of the world is estimated in the U.S. (+0.85%, +0.2%), Eurozone (+0.1%, -0.5%) and Japan (-0.6%, -0.8%).

The ratio of the number job openings to the number of unemployed workers at the end of 2018 was 1.7 in Japan, and slightly over 1 in the U.S.

Skyrocketing remittance growth

Sunday, February 10th, 2019

Remittances from countries and to others reflect the increasingly intertwined nature of the global economy, and the role of migration in particular.  Since 1980 global remittances have grown on average by about 20% a year.

According to the World Bank remittances from the United States to other countries were $1.4B in 1980. That was 5% of the total $28.9B in global remittances, and the U.S. was the fifth largest source.  In 2000 remittances from the U.S. were $34.4B, or 29% of total global remittances. It was the largest source by far.  In 2017, Americans sent $67.9B.  That was 15% of the global total of $445B.

Between 2000 and 2017, several countries greatly increased their sending of remittances. Countries which sent at large remittances in 2017 were United Arab Emirates ($44B) which tripled its remittances since the mid 2000s; Switzerland ($27B) which was a major remittance source for decades; Saudi Arabia ($36B), a long time major source; and Germany ($20B), a long time major source.

U.S. remittances to countries heavily influenced by income of immigrants in U.S.

Saturday, February 2nd, 2019

When you look at which countries are receiving the largest sums of remittances from the U.S., it becomes clear that the flows are heavily influenced by not only the size of the immigrant population in the U.S. but also by their income level. Let’s examine this by using the number of first generation immigrants.

For example, in 2017 U.S. remittances to Mexico were about $30B. there are about 18 million first generation Hispanics in the U.S, roughly two thirds of whom are Mexican, or 12 million. This comes to the equivalent of about $2,500 per immigrant. Virtually all of remittances to Mexico come from the U.S. ($30B is equivalent to 3% of the country’s GDP.)

In 2017 about $6.1B was remitted to Nigeria, about 28% of all remittance income in that country. There are not more than 250,000 first generation Nigerians in the U.S. That comes to an equivalent of $24,000 per first generation immigrant – ten times that of Mexicans. ($6.1B is equivalent to 1.5% of the country’s GDP.)

Japan turns to immigrants

Friday, January 25th, 2019

The number of working foreigners in Japan has more than doubled in the past decade to 1.3 million, but that remains below 2 percent of the total labour force. This compares with 17% in the United States.

A third of Japan’s construction workers are at least 55 years old, compared to 21% in the U.S. The increasing number of Japanese citizens over 65 years of age has intensified the need for caregivers for the elderly. Foreign caregiver qualifications are not recognized in Japan and migrant nursing workers must pass a certification course.

Japan long ago adopted a policy to accept just high-skilled foreign workers, and only as non-immigrants. But chronic labour shortages – especially in construction, shipbuilding, agriculture, healthcare, hospitality, and manufacturing – have caused the Japanese government to liberalise its immigration policy. In June, 2018, the government announced plans to create a new, five-year permit system that would accept 500,000 low-skilled non-Japanese laborers by 2025.

One important but as yet unresolved issue is whether the country should accept immigrants who are given open-ended permission to stay (i.e., permanent residency) or accept foreigners only as non-immigrant guest workers who are allowed to stay temporarily.

In May 2012, a points-based system for highly skilled professional (HSP) workers was introduced in three fields: advanced academic research, advanced specialty/technology, and advanced business management. Points are assigned according to various criteria, such as education, work history, annual income, age, and research record.

The government introduced a faster-track points-based application process in April 2017. Under this system, HSPs who earn 70 points or more can apply for permanent resident status after a three-year stay in Japan. Those who earn 80 points or more can apply after only one year.

Recent pushback from the domestic labour market indicates that the government might need to conduct more extensive consultations. It might become necessary to introduce certain labour market tests, such as requiring employers who plan to hire foreign workers to show they have attempted to recruit domestic workers beforehand.
.From here. 

San Joaquin Valley

Sunday, December 30th, 2018

California’s San Joaquin Valley, from Stockton in the north to Arvin in the south, is 234 miles long and 130 miles wide. If you drive there from the Bay Area, in less than an hour the temperature will go from 57 to 97 degrees. It will keep rising. The radio stations are predominantly Spanish.

Measured by yearly production, the San Joaquin Valley is one of the highest-value stretches of farmland in the country, and is dominated by large growers who preside over a labor force of migrant workers in a way that has not changed much since Carey McWilliams described it in his 1939 book, Factories in the Fields. The revenue from all the crops harvested here and elsewhere in California is $47 billion a year, more than double that of Iowa, the next-biggest agricultural state.

When Cesar Chavez started organizing farmworkers in the 1950s, his son said, 12 to 14 percent of field hands “were still Okies and Arkies, the Steinbeck people,” and 8 to 10 percent were African-Americans brought in by cotton planters during the boll weevil infestation in the 1920s. About 12 percent were Filipino, and 55 percent were Mexican, “half of them Mexican nationals, the other half first-generation Americans like my father.”

Today, at least 80 percent of farmworkers are undocumented Mexicans, the majority of them Mixteco and Trique, indigenous people from the states of Oaxaca, Sinaloa, and Guerrero—the poorest regions in Mexico—who speak no or very little Spanish, much less English. Most of them have been working the fields for at least a decade, have established families here, and live in terror of la migra, as Immigration and Customs Enforcement (ICE) is called, and instant deportation or imprisonment that would wrench them from their children.

From “In the Valley of Fear” by Michael Greenberg in the New York Review of Books: