Category: Economics

Guest workers in the future: union organizing

A new book assesses the potential for organizing immigrant workers, citing examples among Los Angeles area building maintenance, trucking, construction, and garment production workers. If a guest worker program is enacted, it is very likely that the enrolled workers will have the right to collective bargaining. According to the publisher, “Los Angeles’ recent labor history highlights some of the key ingredients of the labor movement’s resurgence—new leadership, latitude to experiment with organizing techniques, and a willingness to embrace both top-down and bottom-up strategies.”
L.A. Story: Immigrant Workers and the Future of the U.S. Labor Movement, released this past August by the Russell Sage Foundation, is written by Ruth Milkman, professor of sociology and director of the Institute of Industrial Relations at the University of California, Los Angeles.
The publisher’s blurb:

Continue reading Guest workers in the future: union organizing

Immigrant labor essential for New Orleans recovery

I’m in New Orleans and have had conversations with people about rebuilding the residential areas. Thousands of homes have yet to be touched, but thousands are being repaired, some with replacement of all the walls. My friend Dan lives in the scacely hurt area of “Uptown.” He is doing major renovations on a 3,000 foot residence. He told me that Brazilian workers from Massachusetts are essential to getting the work done. (There is strong demand for housing.) I talked with Glenn and Brad about the large, 7,500 household neighborhood of Lakeview. This is one of the most actively rebuilding neighborhoods — virtually all homes were 4 or more feet underwater for a week. Glenn told me that governmental agencies have been well meaning but pretty much useless in the rebuilding. He said that the rebuilding could not be done without (1) Hispanic workers and (2) Wal-Mart and Home Depot stores.
And–the first restaurants to reopen were ethnic restaurants because only they had enough staff.

Remittances to Mexico expand, new Federal Reserve program helps

The Wall Street Journal (subscription required) reported on 10/11 on advances in the remittance business, which I have posted about in the past. Remittance volume to Mexico this year may exceed $23 billion.
“Dubbed “Directo a Mexico,” the [new] remittance program enables U.S. commercial banks to make money transfers for Mexican workers through the Federal Reserve’s own automated clearinghouse, which is linked to Banco de Mexico, the Mexican central bank.” User fees: as little as $2.50 a transaction.
“To use the service, a Mexican need only possess a matricula consular, an I.D. issued by the Mexican consulate in most major U.S. cities to those with proof of Mexican birth or citizenship, or a picture I.D. card issued by the U.S. or another foreign government.”
One desired effect of the program is to increase the use of banks by Mexicans on both sides of the border. “…One of the Federal Reserve Bank’s goals is to use the program as a springboard for drawing hundreds of thousands of immigrants into the formal U.S. banking system since commercial banks require that those wanting the service first open a savings account.
“Last month, the program was expanded to enable migrants in the U.S. to open an account for relatives to whom they plan to send money. A bank teller in the U.S. can open the account remotely on a Web site set up by Mexico’s Banco del Ahorro Nacional y Servicios Financieros, the development bank known as Bansefi, which has a vast network of branches in urban and rural areas.”
For undocumented workers, “the Federal Reserve’s brochure poses the following frequently asked question: “If I return to Mexico or am deported, will I lose the money in my bank account?” The answer: “No. The money still belongs to you and can be easily accessed at an ATM in Mexico using your debit card.”

“Subidos” or Mexicans working legally in migrant construction work

The Wall Street Journal on 9/18 (payment required) tracked the work migration of a Cantu family men – self-described subidos. These are Mexicans with green cards, who leave their families in Mexico and pick up relatively well paying jobs on a contract to contact basis, crisscrossing the United States.
“Thanks to quirks in the law, they have green cards enabling them to come to the U.S. for work stints. Many, like the Cantús, call themselves ‘subidos’ from the Spanish verb for ‘to rise,’ because they do the grueling jobs of pouring concrete for tall structures such as grain silos for the ethanol plants increasingly rising across the Great Plains. ”
By quickly filling jobs and providing needed skills, such workers are a boon to employers. They rarely put a burden on social services, because they leave their school-age children and elderly relatives at home. Nonetheless, there is some evidence that the Mexicans drive down wages in the industries where they work.
Some guest workers had their status legalized under the Simpson-Rodino Immigration Reform and Control Act of 1986, which granted amnesty to 2.7 million undocumented workers. It offered that group, who call themselves ‘Rodinos,’ the chance at green cards that confer permanent-resident status and the right to work. The act was intended to encourage U.S. citizenship, but some preferred the guest-worker way of life, as the Cantús do, earning wages in the U.S. but keeping their families and their living costs in Mexico.
Others acquired work visas through programs that legalized imported farm workers during times of labor shortages. Still others won green cards after being sponsored by a parent who became a naturalized U.S. citizen, or by marrying a U.S. citizen. About 100,000 Mexicans also legally commute short distances across the border for day jobs in the U.S.

Continue reading “Subidos” or Mexicans working legally in migrant construction work

Mexican remittances at annual rate of $20 billion

From the AP: The Mexicans living abroad sent $11 billion home in the first half of 2006, an increase of 23 percent over the same period last year, the government news agency Notimex reported Friday. Remittances have become an increasingly important source of income for the country in recent years, surpassing tourism. They represent Mexico’s second-largest source of foreign income after oil. They topped $20 billion for the first time in 2005, a 17 percent increase from the previous year.
This is double the rate of $10 billion used in analyzing the commerce of remittances by companies such as Wal-Mart.

Wal-Mart further penetrates the banking activities of Mexicans

From the Los Angeles Times comes an article about Wal-Mart’s upcoming creation of a Mexico-domiciled bank. Its initiative may have an important impact on how Mexicans in the United States conduct their financial transactions with their home country. There are several converging stories here. First, improving access to low cost banking in Mexico. Second, broadening of Wal-Mart’s extensive U.S. operations in check cashing and expediting remittances from workers to Mexico. Third, a complement to Wal-Mart’s U.S. plan to open “industrial loan corporations,” or stripped down banks, among its 3,900 domestic stores. All in all, Wal-Mart is becoming the banking intermediary of choice of Mexicans living and working in the U.S.
In a prior posting, I wrote how “the Mexican worker in U.S. remits on average $2000 a year to Mexico. Average individual remittance is $300, with transaction fees of $10 to $20. This is a $3.5 billion business growing to $10 billion. This source estimates that only 25% of Mexican workers have a bank account, which presumably supports its $10 billion forecast.”
Excerpts from the article:
The unit, Wal-Mart de Mexico, confirmed this month that it had applied for a banking license, raising the possibility that Wal-Mart shoppers south of the border soon may be opening checking accounts and taking out auto loans while filling up their grocery carts.
Mexican customers can already get store-branded credit cards that Wal-Mart offers through third-party providers. They can wire money, make deposits, cash checks and perform other transactions thanks to agreements the retailer has made with institutions including BBVA Bancomer and MoneyGram International to operate branches and ATMs inside some stores.

Continue reading Wal-Mart further penetrates the banking activities of Mexicans

Pew Hispanic Center: immigration has not hurt American workers

The Washington Post reports on a new study concluding that American workers have not been harmed by immigrant labor. From the summary of the report, below, I’m not sure how much confidence I have in it. A major limitation of all the immigrant impact studies I have seen is that they do not take into account concentration of immigrant labor in industries which may be in fast growth mode and also cyclical. New immigrant labor in a region may depress wages of Americans in some fields and actually stimulate better wages and job growth for Americans in other fields by providing scarce resources of low wage labor. Skilled American construction workers can be said to benefit by the supply of unskilled and semi-skilled immigrant labor.
The article includes these passages:
High levels of immigration in the past 15 years do not appear to have hurt employment opportunities for American workers, according to a new report. The Pew Hispanic Center analyzed immigration state by state using U.S. Census data, evaluating it against unemployment levels. No clear correlation between the two could be found. Other factors, such as economic growth, have likely played a larger role in influencing the American job market, said Rakesh Kochhar, principal author of the report and an economist at the Pew Hispanic Center.
The study used Census Bureau data to compare the influx of immigrants and unemployment rates in each state between 1990 and 2000, a period of robust economic growth, and between 2000 and 2004, a period of slower growth. “We are simply looking for a pattern across 50 states, and we did not find one,” Kochhar said. “We cannot say with certainty that growth in the foreign population has hurt or helped American jobs.”
In the 10 states with the top employment rates from 2000 to 2004, for example, five states showed a high influx of immigrants while the other five showed little growth in the foreign-born population. “Even in relatively slow economic times, a relationship fails to reveal itself,” Kochhar said.
Some economists expressed reservations about the technique yesterday, arguing that such broad statewide data do not give an accurate picture of immigration’s effects on the labor market. “There’s an age, gender and educational component to this story that this report does not address,” said Andrew Sum, director of the Center for Labor Market Studies at Northeastern University. Between 1990 and 2000, he said, immigrant workers did not take jobs away from American workers “because the strong economy was creating enough jobs to employ everyone who was looking for work.” But in the past five years, a subset of the workforce — native-born men age 16 to 24 with high-school diplomas — have in fact been displaced by immigrants, he said. “We argue that immigrant labor has changed the nature of work in a very negative way,” Sum said.
On the local level, too, some experts disputed the findings of the Pew report. While educated workers with specialized skills are not likely to be displaced by foreign-born workers, young unskilled laborers have felt the pinch in recent years, said Steven A. Camarota, director of research for the Center for Immigration Studies in the District.
A recent study done by the center shows that the immigrant share of the young workforce in Maryland and Virginia nearly doubled in the past five years, peaking at 22 percent and 15 percent, respectively, in 2005. “Native workers who have little education in Maryland and Virginia are dropping out of the labor markets in droves” as the number of immigrants grows, he said. “Unskilled workers only account for a fraction of the total economic output, but if immigration plays a role in even a part of [the trend], that’s something we should be concerned about.”
The report pointed out that immigrants typically move to booming areas of the country with low unemployment rates. “It’s unclear as to whether immigrant workers help to cause that boom, but they certainly haven’t detracted from it,” said Randy Capps, a senior research associate at the Urban Institute.

A source of practical advice for immigrant professionals

Leslie Kamenshire, a college administrator, began a few years ago to help foreign professionals in the Washington, DC area, to speed up their entry into the American workforce. She started a website, immigrantcareers.com, and published a book, Career Guide and Directory for Immigrant Professionals (Washington Metropolitan Area). She also has run some workshops. I just learned about her work and hope to post about her again soon.
She held a 7/20 workshop at which was directed to health professionals, lawyers, engineers, accountants, etc., and addresses these practical problems:
• how to get needed license or certification in Virginia, DC, Maryland
• who can help you prepare for the licensing exam
• who can evaluate your foreign credentials
• what are employment needs in the Washington area – & perhaps elsewhere
• where can you obtain help to start a small business or high tech venture

Do immigrants depress existing wages?

The New York Times Sunday Magazine today carried a long article, “The Immigration Equation,” By Roger Lowenstein. Much of the article focuses on the debate about whether Hispanic immigration has depressed wages in the United States. I have posted several times on this – citing the major “yes” academic, George Borjas of Harvard, and the most prominent “no” academic, David Card of U.C. Berkeley. Here, I will excerpt some interesting passages. I include a summary of Card’s study of the labor market effect of a large shift of Cubans to southern Florida (the 1980 Mariel boat lift), and another researcher’s study of the effect of Russian immigration to Isreal. Both studies concluded that the effect was neutral to positive for the income of the existing workforce. This is not surprising to me because, in my judgment, a pretty healthy modern market economy can be very creative about the use of new resources (labor, capital, land, bananas, etc.) without seriously harming any large stakeholder.
How the skill mix of immigrants differs significantly from the 1880-1921 period of high immigration to the current period:

Continue reading Do immigrants depress existing wages?

More on remittance traffic to Latin America

I have previously posted on Hispanic worker banking patterns in the U.S. and on the record $53.6 billion in remittances in 2005 from all worldwide sources to Latin America. Where did the money go? Some interesting information flows below, including how remittances to the Dominican Republic can be home delivered within hours of being sent, how much is sent, and from where in the U.S. and elsewhere, and to where (top three countries are in order Mexico, Brazil and Columbia).
MoneyGram International, Walmart’s remittance partner, sends cash from some 100,000 locations in 170 countries. As Latin Business Chronicle reports, “We’ve seen very significant growth to Latin America – over 45 percent versus a year before,” says Augusto Esclusa, the company’s Miami-based marketing manager for US outbound shipments to Latin America.
The article goes on: In Honduras, remittances accounted for 22% of the country’s GDP last year, a Latin Business Chronicle analysis of the IDB data and figures from the International Monetary Fund shows. In El Salvador, remittances accounted for 17.1% of GDP and it was also key to economies like Nicaragua (12.2%), the Dominican Republic (12.2%) and Guatemala (10.9%).
Remittances were larger than foreign direct investment last year in countries like Mexico, Colombia, the Dominican Republic Ecuador, El Salvador, Guatemala, Honduras and Nicaragua, according to a Latin Business Chronicle analysis of the IDB data and fresh figures from the UN Economic Commission for Latin America and the Caribbean (ECLAC).
Compared with exports, remittances were larger in Haiti and [were equivalent to] 60.9% of El Salvador’s exports and 58.8% of Guatemala’s exports, according to our analysis. Remittances also accounted for a high percent of exports from other countries like Nicaragua (45.4%), Bolivia (28.8%), the Dominican Republic (27.2%), Colombia (16.7%), Paraguay (16.1%) and Peru (13.1%), the analysis shows. Although they play a smaller role in Mexico measured in percent of exports (8.9%), that figure is still considerable.

Continue reading More on remittance traffic to Latin America