Managing Labor Migration: the 21st Century Challenge...• Public finance studies: progressive taxes...
Transcript of Managing Labor Migration: the 21st Century Challenge...• Public finance studies: progressive taxes...
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Philip Martin: [email protected]
http://migration.ucdavis.eduJanuary 27, 2012
Managing Labor Migration:the 21st Century Challenge
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Highlights• Richer countries have “problem” of
managing labor migration: good “problem”• US: 40 million migrants, 20% of global 214
million—11 million, over 25%, are unauthorized/irregular. US debate:• Republicans=enforcement-first • Democrats=comprehensive reform, enforcement +
legalization
• Crisis: generous-TPS for those displaced• Lessons: Perfect=enemy of good; migrants =
economic benefits; incentives should reinforce rules for employers and migrants
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Migration Policies• Aus, Can, NZ, US are countries of
immigration– Welcome immigrants to settle via front door– Admit nonimmigrant visitors, students,
workers via side door– Deal with back-door illegal/irregular
• Asian countries: few immigrants; favor visitors, deal with irregular• Minimize settlement of foreigners• Little planning for integration, including children of
migrants born in country
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US Foreign Arrivals: 104,000 a day
• 3,100 foreigners a day receive green cards (2009); naturalize after 5 years
• 99,200 tourists, business visitors, guest workers and students arrive; most leave after a few weeks or months
• 2,000 unauthorized, 60% Mex, including 1,200 who entered without inspection from Mexico and 800 overstayers
• 1970: 50 mil Mexicans and 750,000 Mex-born in US (1.5% of Mex in US ); 2010: 120 mil Mex and 12 mil in US (10%)
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US Immigration Preferences• Immigrants: 66% = family unification (2009),
13% employment (incl families: 1.5 deps per worker), 21% refugees & others
• Education—best predictor of US earnings– 60% of US-born adults—form a diamond
shape, wide bulge in the middle for HS grads and some college but no degree
– Foreign-born adults—more pyramid or barbell shape. Foreigners MORE likely to have > BS and < HS education
– Averages less meaningful for immigrants—includes Andy Grove of Intel with Jose from rural Mexico
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Negative & Positive Selection• 55% of US immigrants are from Mexico and
Latin America; they have LESS education that those who stay at home (exceptions-Cuba, Venezuela)
• 25% of US immigrants from Asia: they have more education than stay-at-homes (exceptions-Vietnamese refugees);
• Typical 30 year-old Mexican migrant has 7 years schooling; average 30 year-old Mexican in Mexico has 9 years schooling; less educated migrate to the US (also very highly educated: half of all Mexican-born women with PhDs are in US)
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Immigrants = Work• 24 million immigrant (FB) workers,1/6 of US
labor force:– 50% of migrants are Hispanic– 25% of migrants are Asian– 68%of migrants; 65%of US born =in labor force
• Unemployment rate for migrants lower than for US-born 2002-08 – Migrant earnings earn less (2009): $600 a
week versus $760 – Migrants with college degrees earn as much or
more as US born with college degrees
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Demographic Change• Between 1990 and 2010:
– US population up, 250 to 310 million, +60 mil– Migrants up, 20 to 40 million, 1/3 – With US-born children, immigration > 50%
• Most immigrants = Hispanic and Asian, so race/ethnic composition of pop changes
US Population 1970 2010 2050White non-Hispanic 83% 66% 52%
Black 11 13 13
Hispanic 5 16 29
Asian 1 4 6
Population 203 million 308 399
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Immigration: Economics 1• Immigrants: add workers, depress wages,
and expand GDP—how much?– NRC (1996): wage depression = 3%, GDP
expansion = 1/10 of 1%--$8 billion of then $8 trillion GDP
• Different reactions– Immigration = a significant economic plus VS– Immigration = 2 weeks growth at 2.5% a year
• City comparison studies did not find lower wages for Blacks in cities with high shares of migrant workers—Marielitos to Miami– No effects OR internal mobility of US workers?
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Immigration: Economics 2• Both immigrants and US-born are mobile—
boom areas draw immigrants and natives • Studies of migrant impacts on US workers:
divide workers into age and education cells (e.g. 25-30 year olds with 12 years schooling)– Borjas: assume migrants and natives are
substitutes within cells– Peri: assume migrants and natives complements
within cells• Results depend on assumptions, limiting the
impacts of economists on migration policy
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Immigration: Economics 3• Public finance studies: progressive taxes &
redistribution mean low earners pay less in taxes than they receive in benefits
• NRC: PV of average migrant = +$80,000 in 1996, -$3,000 for the migrant, +$83,000 for children of migrants (who are assumed to be = to other children)– Migrants with >HS education, PV =+$105,000 for
migrants and +$76,000 for migrant children– Migrants with <HS education, -$89,000 for
migrant and +$76,000 for migrant children• Conclusion: use a point selection system
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Immigration: Politics 1• Legal immigrants can naturalize after 5 years
by passing an English and civics test– Mass naturalization ceremonies on July 4 and
other national holidays– Naturalization rates vary: naturalize quickly if you
do not intend to return (Cuba, Vietnam), but not Canadians & Europeans
– Mexicans and Latin Americans—55% of US migrants
• Their governments changed from discouraging naturalization in US to encouraging US citizenship
• Why encourage dual nationality? Hope to increase remittances and spur trade links
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Immigration: Politics 2• Effects of naturalized migrants:
– US has more Hispanics (50 mil) than Blacks (40 mil), but Blacks cast 2x more votes in 2008 elections than Hispanics
– 2008 election (Pew Hispanic): • Whites: 55% for McCain, 43% for Obama• Blacks: 4% for McCain, 95% for Obama• Hispanics: 31% for McCain, 67% for Obama
• Latinos as sleeping giant of US politics? Will Hispanics give Democrats a permanent majority?
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Immigrant Integration 1• Metaphor: “Melting Pot,” 1908 play:
“Germans and Frenchmen, Irishmen and Englishmen, Jews and Russians - into the Crucible! God is making the American.”
• Reality more complex—3 principles:1. US open to all. George Washington: US
welcomes “the oppressed and persecuted of all Nations and Religions.”
2. Citizens participate as individuals, not as members of an ethnic group; no Mexican-American political party
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Immigrant Integration 23. Maintain language and cultural heritage with
private, not public, resources:– 60 million US residents do not speak English at home
(almost 40 million speak Spanish at home)– What should be done about children who do not speak
English in school? – US law (1970): if more than 5% of pupils do not speak
English, public schools “must take affirmative steps to rectify the language deficiency.”
– 15,000 school districts, varied responses, but many were bilingual education (teach math and history in Spanish)
– Backlash: California Proposition 227 (1998): end bilingual education. Give children one year of intensive English and move them into regular classrooms
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Waves of Immigrants• 4 waves of migrants: pre-1776, 1840s-1860s,
1880-1914, since 1965 • Current 4th wave shifted origins from Europe
to Latin America and Asia– Family unification-based preferences generate
chain migration from particular countries– Most family members do not wait for visas—2/3
of immigrants are already in US when they receive visas; they enter via side/back door and adjust status to immigrant
– Strong no migrants and no borders extremes, so status quo winds up as 2nd best solution
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US: Lessons 1• US immigration myth & reality: anyone can
succeed in the flexible US economy and society with hard work, from Horatio Alger to Barack Obama
• Migrants move from poorer and less free societies for opportunity and freedom in US
• US celebrates the accomplishments of immigrants, from Henry Kissinger to Arnold Schwarzenegger• immigrants join military, • many new or sunrise industries such as IT associated
with immigrants who benefited from moving to the US AND created jobs for Americans
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US: Lessons 2• Immigrants generally associated with work,
not welfare• High-skilled are welcomed everywhere• Low-skilled immigrant integration is via
private jobs:– Migrants seek a hand up the job ladder, not a
hand out (welfare)– Employers are advocates for migrants, public
opposition softened– Children of immigrants try to avoid their parents’
jobs; may get education to move up
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Protecting Migrants• Best protection for local workers is treating
migrants equally; avoid race to the bottom• Simple rules work best, easy-to-understand
and enforce:– All workers entitled to minimum wage (Fed,
$7.25 an hour, CA, $8) and compensation for workplace injuries, but it is harder to enforce overtime, work-related pension etc benefits
– Very hard to prevent employers and recruiters from charging for rides to work, housing etc
– Beware: workers have rights, but not remedies (Union rights--Hoffman Plastics, 2002)
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Do incentives reinforce regulations?
• Employers and migrants are supposed to obey regulations to avoid fines etc
• Benefits to employers from obeying:– Avoid fines, but what other benefits (faster
access to legal migrants, lower fees etc) – Would ABC rating systems give employers &
recruiters incentives to obey regulations?• Benefits to migrants from obeying:
– Refund of bonds (with interest); match part of savings for development?
– Priority to return again to work?
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Crisis Migration• TPS: foreigners in US can stay and work to
help rebuild (Tiananmen square, natural disasters abroad)
• US crises: Hurricane Katrina and migrants move to New Orleans for clean up and restart– Migrants = flexible, willing to move to areas that
are being rebuilt– Hard to protect against bad recruiters, employers
etc; best protection=enough good employers so that migrants can say no to bad
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Thailand Migration• 1.8 million foreign workers are 5% of Thai work
force; Burmese (3/4), Cambodia, and Laos• Migrants concentrated by geography, industry,
and occupation, few official prospects for settlement & upward mobility
• Structural dependence of sectors on migrants?- 1998—try to substitute Thais for migrants in
rice mills- 2009--Malaysia only SE Asia country that tried
to substitute local for migrant workers• No end in sight to emigration pressures from BCL
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Thai Migration Policy• Thailand: Not a country of immigration
– Thai employers register the migrants they employ and pay legalization fees of about one month’s wages. Migrants can work legally for one (more) year
– Most employers pay reg fees and deduct them from wages; some hold worker documents until fees are repaid, making migrants vulnerable
– Uneven public policy responses: education for migrant children vs provincial government restrictions on migrant cell phones, driving etc
• Nationality verification--migrants obtain passports from own governments; new migrants admitted under MOUs
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Lessons for Thailand 1• From structural dependence to settlement and
integration?– Most countries: Migrants employed at least five
years can unify or form families and settle (exception--Gulf oil exporters)
– Integrating immigrants, and especially their children, is hard. Migrants remember where they came from, but their children often have same aspirations as local youth; troublesome integration of 2nd and 3rd
generations (Turks in Europe) – Employer distortion and migrant dependence can
increase over time
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Lessons for Thailand 2• Distortion (too much “good” can be bad):
– some employers rely on foreign workers– recruitment and supervision change, local workers become “strangers;” avoid migrant sectors (fisheries?)
– “too many” migrants can slow investment and productivity growth in ag, construction
• Dependence (regional growth & stability):– some foreign workers, areas, and countries become
dependent on jobs and remittances– Will emigration lead to stay-at-home development, so
that outmigration “naturally” declines? Compare migration hump in Korea and the Philippines.
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Final Thoughts• Thailand: a country of immigration because of
economic success—68 million Thais @$8,200 per person (PPP) and– 50 million Burmese @$1,300, – 14 million Cambodians @$2,000– 6 million Laotians @$2,300
• Migrants contribute to Thai economic growth• Policy challenge: manage labor migration as an
economic rather than a security issue?• Rights—best protection for local workers is to
protect the rights of migrants i.e., enforce a level playing field in the labor market
• Thailand: like US (underground) or GCC (fees)?
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Fencing the 2,000 mile Mexico-US border
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18th Street Gang, Los Angeles
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States with immigration control laws: 2011
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