Philip Martin: plmartin@ucdavis.edu

http://migration.ucdavis.eduJanuary 27, 2012

Managing Labor Migration:the 21st Century Challenge

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

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

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%)

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

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)

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

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

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?

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

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

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

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?

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

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

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

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

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

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)

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?

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

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

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

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

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.

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)?

Fencing the 2,000 mile Mexico-US border

18th Street Gang, Los Angeles

States with immigration control laws: 2011