Category: Economics

Latin American migrants send back $54B in year in remittances

Migrant workers from Latin America and the Caribbean sent home $53.6bn to their families last year, an increase of 17% from 2004. The remittance are sent from the U.S, Canada, and other developed countries. This is according to a Financial Times report on an upcoming study by the Inter-American Development Bank. The study “confirms Latin America’s position as the biggest market in the world for remittances. For the third consecutive year, remittances to the region exceeded the combined flows of direct foreign investment and overseas economic aid.”
The FT report does not appear to distinquish between Latin Americans who have become citizens, those who are legal immigrants, and those who are illegal immigrants.
The FT goes on to report that

“The shift in international trade, investment and communications has required the world’s political and economic system to adapt new rules and mechanisms to meet modern realities,” said Donald Terry, head of the bank’s multilateral investment fund. “The same needs to be done for the migrant labourers who have become such an integral part of the world’s labour markets.”

An estimated 25m-27m Latin Americans are living and working abroad, 22m of them in the developed markets of North America, Europe and Japan. Migrant workers from the region now made up more than 20% of the labour force in Madrid, Spain’s capital. In the US, Latin American and Caribbean workers constitute an average of 12%of the labour force. Family by family, worker by worker, migrants are redrawing the map of global labour markets

Improvements in techniques used to monitor the flows of remittances in part accounted for the sharp rise last year. Many migrants continue to use informal channels, and the total could be more than $59bn.

Countries nearest the US have seen the biggest flows, with Mexico drawing some $20bn of foreign exchange earnings from remittances. The five countries of Central America and the Dominican Republic received $11bn.

Brazil got $6bn, Colombia $4bn and the four other Andean economies a total of $9bn. The bank is continuing its efforts to force down transmission costs of remittances, typically despatched in sums of between $100 and $300. Commission costs now amount to about 5% of the total, less than half the levels of five years ago.

Skilled labor immigration into the U.S.: some highlights

A 2004 report on skilled workforces highlights some key trends in skilled immigrants working in the United States. I have excerpted passages on foreign supply of scientists and engineers, the foreign presence among Silicon Valley leaders, and the broad effect of globalization.
The study is titled Preparing Chemists and Chemical Engineers for a Globally Oriented Workforce: A Workshop Report to the Chemical Sciences Roundtable (2004)
I have previously posted on foreign trained physicians in the United States, the U.K., Canada and Australia.
Effects of globalization on the domestic supply of IT workers
If in 1980 the United States had closed its borders and not allowed IT to globalize as it did, there probably would not have been the IT boom enjoyed in the 1990s. The IT industries would not have been able to deliver the productivity gains and price declines that they did.
To summarize, research by economists has concluded that in recent decades globalization appears to have been more beneficial for more-skilled workers in the United States than for less-skilled workers. It also seems that the boom time in real wages since 1995, driven largely by IT, has had a lot to do with globalization. These gains from global integration are widely distributed across skill groups.

Continue reading Skilled labor immigration into the U.S.: some highlights

Does immigration depress wages of native Americans?

Two prominent economists each with many years’ experience in immigration research come down on opposite sides of this question:
David Card of UC Berkeley thinks the adverse impact is scant. His most recent paper is titled,” Is the new immigration really so bad?”
George Borjas of Harvard thinks the adverse impact is large –the new eave of immigrants depresses wages by 3 to 4%. He stakes his position out in a paper presented through the Center for Immigration Studies.
I’ll use a simple model below to highlight that which researchers have to grapple.

Continue reading Does immigration depress wages of native Americans?

Farm workers labor contractor fraud

Four California agriculture contractors accused of labor violations is the title of the article which ran on 1/14/06 in the Fresno Bee. The article summarizes a common theme of employer fraud practiced in the California agricultural counties by labor contractors. These are employers who bring workers to the farm. The farm owners do not know the terms of employment between the contractor and the workers – pay, compliance with state labor laws, etc.
According to the Bee:

The alleged misconduct resulted in an underpayment of about $900,000 in premiums to the State Compensation Insurance Fund and cheated the state out of about $676,000 in payroll taxes, according to a state Department of Insurance statement made public Friday.

The companies are suspected of misrepresenting total payroll, the number of employees and the type of work performed by employees, according to the Insurance Department..

The companies supply workers to farms in Fresno, Madera, Kern, Tulare and San Luis Obispo counties.

More than 100 workers’ compensation fraud cases have been investigated in the San Joaquin Valley in the past three years, a marked increase from previous years, said Mark Voss, chief investigator of the Fresno Fraud Division Office of the Insurance Department.

New study on economics of rural immigrant workers

Thanks to the Immigration LawProf blog for alerting me to a new study of immigrants in rural areas.
The Urban Institute has come out with a new book on rural poverty in America, and the effect of rural migration by immigrants.
It describes The New Rural Poverty: Agriculture and Immigration in California as follows:

Migrants arrive, many from Mexico, to fill jobs on farms and in farm-related industries, usually at earnings below the poverty. Leaders of rural industries are adamant that a steady influx of foreign workers is necessary for economic survival. But the integration of these newcomers is uneven: many immigrants achieve some measure of the American dream, but others find persistent poverty, overcrowded housing, and crime. The New Rural Poverty examines the effect of rural immigration on inland agricultural areas in California, farm areas in coastal California, and meat and poultry processing centers in Delaware and Iowa. The authors examine the interdependencies between immigrants and agriculture in the United States, explore the policy challenges and options, and assess how current proposals for immigration reform will affect rural America.

The New Rural Poverty: Agriculture and Immigration in California, by Philip Martin, Michael Fix, and J. Edward Taylor, is available from the Urban Institute Press

Wall Street Journal article on Brazilian immigrant cleaning business in MA

Today’s Wall Street Journal profiles Brazilian home cleaning businesses in MA. The businesses are so well developed that a buy-sell market has emerged; the Internet is used to communicate and clients; and Craig’s list is used to recruit workers. The hub of the cleaning business is in Somerville, MA, which according to the Boston Globe’s analysis of census data, 31% of new immigrants are Portuguese speaking (Brazilian or Portuguese). We have already profiled the Brazilian Immigrant Center.
Tufts University is undertaking a collaborative multi-year project in Somerville to study and support economic growth among immigrants. Included in the project is the introduction of “green” cleaning materials for cleaning businesses.
Among a number of initiatives, this project

…. will also break new ground by launching an entirely new business model for immigrant workers: a non-profit green cleaning cooperative that will help to break down the barrier of isolation faced by these workers. “Brazilian women cleaners form a large occupational group working and living in Somerville who can benefit from this new structure and by learning about safe work practices and the benefits of using environmentally friendly cleaning products,” said Monica Chianelli, coordinator, Brazilian Women’s Group.

“Immigrants have accounted for 82 percent of the growth of the labor force in Massachusetts since the mid 1980s. Somerville, which has seen the number of foreign-born residents grow by 34 percent in 10 years, is an important gateway for newcomers,” explained Principal Investigator David M. Gute, associate professor of civil and environmental engineering at Tufts University and an epidemiologist.

One out of eight new jobs to be filled by immigrants, 2002 – 2012

A new study by the American Immigration Law Foundation estimates that job growth for the foreseeable future is heavily dependent on immigration. Economic Growth and Immigration: Bridging the Demographic Divide, says that:

U.S. economic growth projections for 2002–2012 are predicated on a growing supply of workers that likely will not be found in the native-born population alone. Absent a change in current immigration laws, undocumented immigrants will likely account for 1 in 8 new workers between 2002 and 2012. Rather than creating an orderly process by which needed workers enter the United States from abroad, static limits on employment-based immigration have diverted labor migration to undocumented channels or clogged the family-based immigration system.

How immigrants without bank accounts get by

An introduction to “unbanked” workers in America – mainly Mexican – can be found at Financial DNA Weekly, May 14, 2004 According to this report, 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 billoin forecast.
Another source, in contradiction, estimates that 40% of Latin American in the U.S. do not have a bank account. “A worker earning $12,000 a year could pay $250 for check cashing services” per Banking the Poor: Policies to Bring Low-Income Americans Into the Financial Mainstream, by Michael S. Barr, University of Michigan Law School, Published in The Brookings Institution, Research Brief, pg. 1 (September 2004)
Jopari Solutions, run by insurance professionals, has reportedly proposed to major workers compensation insurers a service to expedite indemnity payments, including to unbanked recipient.
The Financial DNA Weekly report contains the following nuggets:

Continue reading How immigrants without bank accounts get by

What day laborers earn by hour, month, year

On the Corner, the recently published nationwide survey of day laborers, reports that 7.4% of work assignments pay $7 per hour or less; 22% between $7 and $9.99; 46% between $10 and $12; and 25%, over $12.
Assignments paying over $12 usually involve high skill work such as electrical or plumbing work.
For total monthly earnings, in a good month the median total income is $1,400. In a bad month the median is $500.
The authors report that even with workers who have more good than bad months, it is unlikely that their total annual wages exceed $15,000.
See a prior posting for the report’s analysis of the kind of work days laborers perform and whom they work for.

Demand for foreign nurses is intensifying

Foreign nurses are now filling a very high share, perhaps as much as one third, of new hospital based nursing jobs.
Put this in context: One out of every five new jobs created between 2004 and 2014 will be in the healthcare sector. Three of the ten industries with the highest total job additions are in the health care area: practitioner offices, private hospitals, and home health care.
Nursing jobs will grow at a relatively fast rate in the next decade. Foreigners hold currently about 300,000, or 11%, of nursing positions. Nurses from the Philippines make up one third of these workers. Latin American/Caribbean workers are about a quarter. In the past few years hiring of foreign nurses has spurted due to rising demand and limitations on nursing educational slots in the United States. Foreign nurses tend to work for metropolitan area hospitals and, due to more experience, many work in ICUs and are paid relatively well.
Much of this information comes from a presentation by Linda Aiken, professor at the University of Pennsylvania School of Nursing.
For a description of the legal and professional steps in recruiting a foreign nurse, go to this article.