More on immigration – and globalization

Last updated on: February 2, 2014 at 8:54 pm by Jane the Actuary

More on immigration – and globalization 2014-02-02T20:54:00-06:00 Jane the Actuary

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Three more thoughts on immigration, all connected to the issues of labor force.

(I haven’t really written about the cultural issues — concerns that Mexicans, for instance, lack a sufficient commitment to the value of education, or that integration into American, and English-speaking, society will not follow the path of prior waves of immigration due to the proximity to Mexico combined with sheer large numbers, as well as increased accommodation of non-English speakers — “press 2 for Spanish”. These questions are, at this point, somewhat speculative and I don’t really have any good ideas on this topic.)

1) A reader highlighted the fact that Canada encourages immigration, at least of high-skilled individuals, to a far greater degree than we do. I tried to hunt around on the web for some useful information on the degree to which Canada has issues with immigrants reducing wages for the existing population, or with low-skilled immigrants in general — and exhausted my attention span on this one.

I did read an article, which I can’t find any longer, highlighting the fact that Canada has a below-replacement birth rate, and that their immigration policy is, in part, intended to keep the population stable, or growing slightly. I also ran across a pro-illegal immigrant group in Canada, No One Is Illegal, which pretty much advocates immigration for anyone and everyone, “regularization” for “non-status individuals” (including immediate access to all social welfare programs). Their platform is here, for what it’s worth.

And — to pull in my experiences in Germany again — one of my favorite shows there was called “Mein Neues Leben” — My New Life — and each episode profiled a family moving overseas. Doctors were common emigrants, due to the comparatively low wages, and Canada, especially western Canada (e.g., Alberta) was a popular destination, for people with all kinds of occupations, for instance, truck driver. I imagine that there was heavy recruiting especially in areas booming due to the oil economy.

In any event, Canada does emphasize high-skilled immigration much more than we do — and especially given that we’re contemplating legalizing a whole slew of non-skilled immigrants. Their philosophy is that high-skilled workers benefit the economy; ours is — well, I don’t know. To hear the politicians, our philosophy is that we’re wealthy enough to be able to hire low-wage workers to do various and sundry low-paid jobs.

2) On guest workers:

Here’s an easy way to tell if there’s a labor shortage in a particular industry: if the wages in a particular field consistently, for a number of years, rise at a level significantly higher than the average wages in the country, then there’s a labor shortage. Wages for low-skilled work in the U.S. has stagnated or declined = no labor shortage.

Not in such fields as roofing, where it’s now a given, in our area at least, that the roofing crew won’t speak English. Not in such businesses as housecleaning, where I hired a maid service for a short time a number of years ago, and was uncomfortable with women who didn’t speak English and seemed barely literate cleaning my home. Nor in yard work, where I was surprised at how inexpensive it was to hire a landscape service, compared with the rates your typical “teen boy with a lawnmower” would have charged back in the day. (We don’t actually have a landscape service — we did briefly but I didn’t like the fact that I was paying for likely illegal false-ID workers and my husband didn’t like the fact that they mowed every week, whether it needed it or not, or even if it would harm the lawn to be mowed mid-summer.)

Is there a labor shortage in agricultural work? I don’t know. This is one area where I find it particularly disturbing to say that “Americans can’t cut it.” We’re too soft? Is it congenital? Cultural?

Of course, there’s the issue that highly-seasonal work is highly undesirable. And beyond that, our unemployment and welfare system is dysfunctional, so that some people are indeed worse off taking temporary employment than having no job at all, and others of the unemployed are comfortable enough with whatever government benefits they’ve got that the hard work of harvesting isn’t worth it. Could farmers recruit Americans, if they improved working conditions and pay? Maybe — the problem at this point is that, having been hiring illegal workers for so long that to suddenly pay American market wages would be significantly disruptive.

Quite some time ago I read an article that described a protest by farmworkers against mechanization of the harvesting process. I couldn’t find anything about this just now but it seems to me that the workers were trying to persuade consumers to support continued hand-harvest by the dual claim that hand-harvested tomatoes (or whatever it was, but I think it was tomatoes) were of better quality, and that the tomato-harvesting jobs should be preserved (even if those jobs were filled by illegal workers).

3) The big picture: immigration, globalization, the labor force, and the job market.

I had said in my prior post that I tended to view limited immigration, especially limited low-wage immigration, as a way of mitigating the impact of globalization on American workers, because, though, when taken as a whole, globalization benefits the American economy, low-skilled workers have been left behind — there are all too many instances of former factory workers now trapped in some retail job. Yes, in general, the whole point of globalization is that, in general, the American workforce has become more skilled and better able to take on the high-value jobs and leave the low-skilled jobs — such as basic manufacturing — to workers elsewhere. But it’s still the case that there are workers who have been left behind, and who, for multiple reasons, can’t be expected to get those high-skill jobs that were expected to replace the low-skill factory jobs.

It’s true that the labor market is not fixed — a woman who enters the workforce doesn’t displace some young man just joining the workforce. A 65-year-old who continues to work doesn’t take a job away from a young person. There isn’t a 1 to 1 correspondence. The economy, and the number of jobs, expands. But it doesn’t magically expand sufficiently rapidly and seamlessly to employ everyone who wants a job, and to meet everyone at the skill level they possess.

Globalization, large-scale immigration, automation/mechanization/computerization have all impacted the job market, and we don’t really understand the long-term impact. Sure we can gripe that the unemployment rate is due to the recession, or to the uncertainties of Obamacare, or increased labor costs. But at the same time, there have also been jobs created that really shouldn’t have been — the increased number of workers whose jobs are dedicated to compliance with regulation, accounting rules, the sustainability jobs, etc. The teachers hired out of the unproven conviction that low student: teacher ratios are the answer. The layers of security (TSA, school security guards, etc.)

What will the economy, the job market look like in, say, a decade? What other jobs will be automated? Will we have the mechanical harvesters, the robotic lawn-mowers, the mechanical helpers in nursing homes, etc.?

And what jobs will exist then that we haven’t really conceived of now? So far as I can tell from my own town, the biggest growth industry is fitness studios of various kids — yoga, boot-camp training, etc.

But these transitions will be tremendously disruptive, with winners and losers in the US and elsewhere. I admit, I’m a winner in the new global economy, a knowledge worker (along with hubby) getting paid well. But I have three boys. Will they be winners or losers? And we need to think about what the right actions are to mitigate the harm the losers experience.

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