Working Immigrants

Immigrants make up an estimated 17% of the overall U.S. workforce. But many essential service employees are immigrants, at a much higher rate in some occupations. More than a third of California nurses are immigrants, as well as 29% of nurses in New York and New Jersey.  One-third of delivery workers in New York are unauthorized immigrants, per the New American Economy. (Also go  to Axios, here.)

The surge of unauthorized entry into the U.S., mainly by Mexicans and then Central Americans, in the late 1980s through mid 2000s, occurred in part by expectation of jobs with American meat processing and textile companies. These companies dodged laws prohibiting hiring of unauthorized workers. Still today, the federal government does not require employers to verify legal status using the 20-year-old e-Verify system (even while requiring states to use national database – enabled drivers licenses (The Real ID). The White House is reported to be working up an immigration reform bill now that would not require use of e-Verify.

This recuirtment process contributed to the spread of low wage Hispanic workers across American and, I believe, was very important in the growing backlash against immigration. See this revealing historical map. The backlash was mainly cultural because few Americans tolerated the working conditions.

Pro Publica’s Michael Grabell reported on the recruitment actions of poultry processing company Case Farms. The company was running out of workers.

He wrote,” Scrambling to find workers in the late 1980s and early ’90s, Case Farms sent recruiters across the country to hire Latino workers. Many of the new arrivals found the conditions intolerable. In one instance, the recruiters hired dozens of migrant farmworkers from border towns in Texas, offering them bus tickets to Ohio and housing once there. When workers arrived, they encountered a situation that a federal judge later called “wretched and loathsome.” The Texas farmworkers quit, but by then Case Farms had found a new solution to its labor problems.”

Grabell journeyed to a remote area of Guatemala to find former Case Farm workers – so remote that a form of Mayan rather than Spanish is spoken. “I asked the men if any of them had worked for Case Farms. “I worked there for a year, around 1999 to 2000,” one man said. “2003,” another added. “Six months. It’s killer work.” “11 years,” said another.

Case Farms has built its business by recruiting some of the world’s most vulnerable immigrants, who endure harsh and at times illegal conditions that few Americans would put up with. When these workers have fought for higher pay and better conditions, the company has used their immigration status to get rid of vocal workers, avoid paying for injuries and quash dissent.

Case Farms plants, Grabell wrote, are among the most dangerous workplaces in America. In 2015 alone, federal workplace safety inspectors fined the company nearly $2 million, and in the past seven years it has been cited for 240 violations. David Michaels, the former head of the Occupational Safety and Health Administration, called Case Farms “an outrageously dangerous place to work.”

“We find consistent evidence linking the hiring of young skilled immigrants to greater employment of skilled workers by the [American] firm, a greater share of the firm’s workforce being skilled, a higher share of skilled workers being immigrants, and a lower share of skilled workers being over the age of 40. Results on whether total firm size increases or not are mixed.”

From a 2015 study here.

Canada may have the most skilled worker – oriented immigration system of all large countries. It uses a point system.  66% of foreign born persons have more than a high school degree. Australia, also with a point system, has 54%. the U.S. has 40%; Germany, 255: and Italy, 15%.

The United States’ system is so fragmented into dozens of entry points each with loopholes that is it hard to say how many of the roughly one million green cards awarded a year are for persons with strong work skills, but 20% or less might be a rough estimate.

A major problem with a formal skills-based system: the United States needs many workers without strong formal skills.  They will be paid less. And, yes, they will need – like some 20 million American citizens who work at the bottom 25% of the wage scale – some forms of public assistance at some time.

The COVID-19 pandemic threatens to seriously disrupt the economies of emerging nations due to a sharp decline in remittances.

According to the World Bank, an estimated $625 billion was sent by migrants to individuals in their home countries in 2017, a 7% increase from 2016, when the amount was $586 billion. That is up from $188 billion in 2005, or an average annual increase of 27% while global GPD has grown about 3% a year.

The Philippines, for instance, received in 2017 about $28 billion in remittances or over 9% of its GDP. $10 billion came from the Gulf States; $11 billion from the U.S. and $6.6 billion from four other states.

Several Latin American countries vitally depend on remittances from one country – the United States. Perhaps half of the workers from these countries in the U.S. are unauthorized and may not receive unemployment checks or the one time $1,200 payment.

For an overview of remittances to emerging economies, go here. For detailed historic data from the World Bank, go here and here.

About 8 million persons unauthorized to work in the U.S. fill jobs. Maybe 50% of them work for employers through formal payrolls, as opposed to for cash. The rescue package does not recognize either the formal payroll or the cash workers.

This means in effect that 15% of farm workers, 13% of construction workers, and 8% of hospitality workers will not benefit from the program.

We can estimate the formal payroll workers through the volume of persons working with Individual Taxpayer Identification Numbers (ITIN), plus a generous number working with some someone else’s social security number. In 2010, 3 million federal tax returns were filed with ITINs.

In 1996, the Internal Revenue Service created the ITIN to provide a way for noncitizens who earn income in the United States, including legally-present noncitizens who do not have Social Security numbers, to pay taxes on money earned in the United States while not being technically employed by a U.S employer. The vast majority are unauthorized workers.

3/29/30. Update with more information from the American Immigration Council
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The advanced countries have increasingly depended on temporary foreign workers to pick crops. The COVID-19 crisis exposes this dramatic shift in farm labor, mainly since about 2010.

On March 18, the Feds shut down processing of temporary (H-2A) visas for farm workers, who come typically from Mexico to pick crops. The crops picked by hand, such as tomatoes and strawberries,, will be most severely affected. Yesterday (March 26) the Feds relented to pressure from the farm industry to waive some visa processing requirements in order to restore the flow of temporary workers.

In FY 2019 258,000 workers came to the U.S. on this visa. That is up from 60,000 in 2011. (Go here for the history of the H-2A program.)

In Europe, the virus shutdown imperils the flow of temporary farm workers from eastern Europe and Morocco. And the lack of farm workers is affecting eastern Europe – Poland uses 500,000 temporary workers from outside the EU for its farms, as its own workers stream into western Europe.