The Differential Impact of COVID-19 on Labour Market Outcomes of Immigrants in Canada

Another study on the differential impact of COVID on immigrants, recent and long-term, highlighting, as expected recent immigrants were most affected, followed by established immigrants. Conclusion below:

Our results indicate that the pandemic has had an obvious large adverse effect on a wide range of labour market outcomes for all workers in Canada. The adverse effects, however, have been particularly large for recent immigrants relative to the domestic-born as they experienced a disproportionately lower probability of being employed and of holding a full-time job, a higher probability of having only temporary work and substantially more unpaid overtime. When these disproportionate adverse effects for recent immigrants are added to the overall adverse effects for all workers, the magnitudes of the total adverse effects of the pandemic for immigrants are extremely large. The same applies to established immigrants. In essence, the overall workforce experienced substantial adverse effects of the pandemic, but those adverse effects were disproportionately large for recent and established immigrants.

Most of the effects of the pandemic were concentrated in the initial first wave as the shutdowns and social distancing forced consumers, employers, and workers to adjust immediately; however, recent immigrants continued to experience disproportionately negative labour market outcomes in later waves. Heterogeneous effects were also documented with greater adverse effects for recent immigrants relative to domestic-born who are women, who have child responsibilities and who are the less educated. Of particular note, recent immigrants working in occupations with greater exposure to COVID-risk reported increased employment and substantially more unpaid overtime than domestic-born during the pandemic.

The pandemic generally had different effects across the quantiles of the distribution of the outcomes for recent immigrants, relative to the domestic-born, with the differential adverse effects tending to be concentrated at the bottom of the outcome distributions. Although recent immigrants gain a small positive wage premium relative to the domestic-born at the bottom of the wage distribution, the benefits of this may be illusory if it reflects wage bonuses for COVID risks or low-wage workers more likely not to be employed. Recent immigrants at the bottom of the outcome distributions reported fewer weekly hours worked, fewer hours worked relative to scheduled hours, and more unpaid overtime than domestic-born workers. The hours differences could exacerbate inequality in hours worked between immigrants and the domestic-born for those working in precarious arrangement (i.e., few hours, large scheduling uncertainty, and more unpaid overtime hours).

While hazardous to suggest policy implications from such an unanticipated and still unfolding event as the pandemic, a number of policy considerations merit attention. The disproportionate adverse effect of the pandemic on more vulnerable disadvantaged recent immigrants (e.g., women, less educated, low-wage, those with childcare responsibilities and high exposure to COVID risk) should be recognized, and targeted rather than applying “one-size fits all” initiatives.8 Koebel et al. (2021), for example, argue that a basic income guarantee targeted toward low-income workers, in combination with Canada’s pre-existing Employment Insurance program, would have produced better employment and public health outcomes than the less targeted combination of the Canada Emergency Response Benefit and Canada Emergency Wage Subsidy that were used. Qian and Fuller (2020) emphasise the importance of enhanced child-care arrangements given the disproportionate adverse effect on women with child-care responsibilities.

Immigrants tend to face barriers in having their foreign credentials recognized and in acquiring occupational licenses and the associated wage gains that are disproportionately large for them (Gomez et al. 2015). Removing such barriers and relaxing occupational licensing restrictions can be a targeted initiative for immigrants (Gomez et al. 2015). The fact that the adverse effects tended to occur early in the pandemic highlights the importance of early intervention and having a playbook in place to facilitate an early response. Elements of a playbook for labour policy include: having a first-responder labour policy team in place; determining early the novel versus permanent nature of the shock; acting quickly but flexibly to make mid-course corrections if necessary; keeping people in their existing jobs to preserve firm-specific human capital; balancing active labour market policy versus passive income support; co-ordinating with other departments and jurisdictions; anticipating conflicts; and planning for the recovery with an exit strategy (Gunderson 2020). Lessons from this pandemic as well as previous shocks can be invaluable for preparing for future shocks.

Source: The Differential Impact of COVID-19 on Labour Market Outcomes of Immigrants in Canada

Greater share of recent immigrants landing jobs even as Canada welcomes more

So far, so good:

The share of recent immigrants of prime working age who had employment reached a new high last year, even though Canada has been opening its doors to more newcomers than ever before, according to an internal federal analysis.

The increase was likely driven in part by the country’s strong job-creation run, which has encouraged companies to hire more people who usually find themselves at the margins of the workforce, says the document prepared for Finance Minister Bill Morneau. Immigrants who arrived less than five years ago fall into that category.

The analysis provides a closer look at the impact of immigration on a labour force that has posted big gains in recent years.

After economic slowdown last winter the unemployment rate has hovered near 40-year lows. As a result, employers have reported challenges when trying to fill job vacancies.

“The performance of recent immigrants on the labour market has markedly improved in recent years, especially when considering the scale of immigrants arriving in Canada every year,” reads the January briefing note, obtained through access-to-information law.

The memo says the employment rate for immigrants aged 25 to 54 who landed less than five years ago, was 71 per cent last year. It was the indicator’s highest level since 2006 — which is as far back as the data goes.

“Similar trends are witnessed for immigrants that landed between five and 10 years ago,” the briefing said.

The labour-force participation and unemployment rates of recent immigrants were better than before the last recession, over a decade ago. Selection criteria have targeted immigrants with better earnings prospects and recent newcomers to Canada are more highly educated, the analysis said.

The share of prime-aged immigrants with post-secondary educations rose from 75 per cent in 2006 to 80 per cent in 2018. That’s nine percentage points higher than the share in the general population in the same age range.

Canada has welcomed more immigrants in recent years — and the government intends to bring in more. It has set targets of nearly 331,000 newcomers this year, 341,000 in 2020 and 350,000 in 2021.

The numbers are rising at a time of growing public debate about some aspects of immigration. It could become an issue in the lead-up to the October federal vote.

A lobby group representing chief executives of Canada biggest companies has urged political parties to avoid aggravating public concerns about immigration during the campaign.

Business leaders made clear the economic case in favour of immigration, especially as baby boomers age and the country seeks workers to help fund social programs, like public health care, through taxes.

The Finance Department document argues that, in general, immigrants in Canada have done well because the country has maintained a positive attitude towards immigration.

“The topic of immigration has become more polarized in a number of countries, which may reflect the poor socio-economic outcomes for immigrants and economic stagnation of the middle class who use immigration as a scapegoat,” it says.

“The economic benefits of immigration are largely dependent on how well newcomers integrate into the labour market. Increasing immigration — or any increase in the population — will drive demand for goods and services, contributing to economic growth.”

The document also noted the strong economic and education outcomes for second-generation Canadians, compared to children of two Canadian-born parents.

Among individuals aged 25 to 44, 95 per cent of second-generation Canadians had completed high school compared to 89 per cent of those whose parents were both Canadian-born. Forty-one per cent of second-generation Canadians had university degrees versus 24 per cent of people with two Canadian-born parents.

In 2017, second-generation Canadians earned average employment incomes of $55,500, versus $51,600 for children of Canadian-born parents.

Source: Greater share of recent immigrants landing jobs even as Canada welcomes more

Canada has a skills shortage – but which skills, and where? Lack of data leaves the experts unsure

Another in-depth look by the Globe on data gaps:

Five years ago, then prime minister Stephen Harper’s Conservative government was convinced that Canada’s labour market was sinking into a deepening skills-mismatch problem: There were plenty of skilled jobs available, but not enough qualified applicants to fill them.

In the February, 2014, budget, the Tories attempted to drive home the point by including a Finance Department study that said the job-vacancy rate (open jobs as a percentage of all jobs) was north of 4 per cent, its highest level since 2008, despite still-high unemployment of 7 per cent.

But that study contradicted Statistics Canada’s data on job openings, which put the vacancy rate at barely above 1 per cent.

It turned out that some of the government’s stats were gleaned from internet job postings on sites such as Kijiji, and those counts were badly tainted – double-counting some jobs and including some positions that had already been filled.

The so-called Kijiji Jobs Report, as it became known, was a major embarrassment for the Harper government. Critics accused the Conservatives of using half-baked statistical evidence to justify their economic policies.

But it was unclear whether Statscan’s numbers were right either. Job vacancy estimates from the Conference Board of Canada and the Canadian Federation of Independent Business yielded still different results.

The episode was a wake-up call: If Canada faced deepening shortages in key skills, it lacked the statistical detail to see them properly, let alone do anything about the problem.

In the five years since, there has been a renewed focus on bringing Canada’s labour-skills data into the 21st century – with increased funding to match.

But progress has been slow and the stakes are rising. A growing economy and aging population have eaten into the available labour pool, slicing the unemployment rate to a four-decade low. An increasing number of companies complain that they can’t find enough skilled workers.

To help fill the labour gaps, successive federal governments have increased what’s known as “economic” immigration, targeting highly skilled foreign workers. The provinces have also been given increased powers to recruit immigrants to fill their skills needs. All this comes against a backdrop of rising automation and artificial intelligence, which will dramatically reshape the labour market.

Finance Minister Bill Morneau has said that skills development will be a focus of his March 19 budget. But if Canada is going to embark on a skills overhaul, it will need to fill the gaps in its data first.

“Being able to gather that information, in terms of the [skills] supply and demand, I think is going to be really important, given the scale and speed with which this [change] is happening,” says Dominic Barton, head of Mr. Morneau’s Advisory Council on Economic Growth, probably the most influential voice shaping the government’s long-term economic priorities. “There is an urgency to this.”

This challenge didn’t exactly sneak up on policy-makers. It’s been a decade since the Harper government’s Advisory Panel on Labour Market Information (LMI), chaired by prominent Queen’s University economist Don Drummond, issued a 228-page report containing wide-ranging recommendations to modernize Canada’s labour data.

“Reducing unemployment or raising wages by a better matching of workers and jobs by as little as a tenth of a [percentage] point would raise GDP by some $800-million,” Mr. Drummond wrote. “That is why we need to spend more money on LMI and spend it smarter.”

Identifying problems with Canada’s labour skills data differs depending on who you ask. Academics, economists, policy-makers, employers, teachers and workers all use the information. But there are two common complaints.

First, information isn’t sufficiently “granular” – it doesn’t drill down deep enough to identify specific skills in supply or demand in the marketplace, or precisely where these skills are available or needed.

Second, data are too scattered among a variety of agencies and levels of government, which don’t do a great job of sharing their information with each other or making it user-friendly.

Statscan is the primary producer of labour data in this country. But the Harper government slashed Statscan’s labour market information budget by more than 20 per cent between the 2011-12 and 2013-14 fiscal years.

In the wake of the Kijiji Jobs Report, however, the Conservatives re-opened the taps, and the flow has accelerated under Prime Minister Justin Trudeau’s Liberals.

Statscan’s current budget for labour data is more than $30-million, up nearly 40 per cent from 2013-14 levels. Still, it’s a small slice of the agency’s total annual budget of more than $600-million.


Source:     Canada has a skills shortage – but which skills, and where? Lack of data leaves the experts unsure David Parkinson March 11, 2019     

Germany Chases a Fix for Its $35 Billion Immigration Problem

The other side of Germany’s immigration issues:

Germany has an immigration problem, but it might not be what right-wing extremists think it is. Rather than too many foreigners in the country, economists fret there won’t be enough.

With baby boomers retiring and not enough young people joining the labor market, the country needs at least 400,000 people coming to work in Germany every year to maintain its competitiveness, according to the IAB Institute for Employment Research. A shortage of skilled workers means businesses won’t be able to produce as much as they could, holding back the economy by about 30 billion euros ($35 billion) a year, research by the Cologne Institute for Economic Research shows.

Labor Squeeze

Germany’s job market is expected to get tighter as older workers retire

Source: German Federal Labor Agency

It’s a delicate issue for Chancellor Angela Merkel. Her open-door policy to refugees — more than 1 million asylum seekers came to the country since 2015 — helped foment social tensions and facilitated the emergence of the right-wing Alternative for Germany party. That puts pressure on her to respond to these concerns, while also helping businesses clamoring for more talent.

“It can take up to six months before employees from non-EU countries get their visa,” said Michael Bueltmann, who runs the German operations of digital mapping company HERE Technologies. “This has a negative impact” on recruitment and complicates planning. The company employs 1,200 people in Germany, including programmers from Bangladesh and the Middle East, who lack certainty about their residency prospects.

To address these concerns, Interior Minister Horst Seehofer, who recently referred to migration as “the mother of all problems,” is finalizing a law aimed at helping skilled workers come to Germany, while also controlling the influx of low-skilled people who might take advantage of the country’s generous welfare system.

The refugee situation and immigration may be linked in the legislation, with the SPD — Merkel’s junior coalition partner — calling for refugees to be able to switch out of asylum status if they find a job. The so-called “lane change” proposal has been rejected by Merkel, setting up a potential showdown.

The final immigration bill is to be presented this fall, and critics are already concerned it won’t go far enough.

“The planned legislation is a first step, but not what Germany really needs,” said Wido Geis, a senior economist at the Cologne Institute. “A truly modernized German immigration law would need a restructured administration” that centralizes approval processes rather than relies on local authorities.

Source: Germany Chases a Fix for Its $35 Billion Immigration Problem

Will Robots Take Our Children’s Jobs? – The New York Times

Good read by Alex Williams on the occupations most likely to be threatened and the coming disruption:

But artificial intelligence is different, said Martin Ford, the author of “Rise of the Robots: Technology and the Threat of a Jobless Future.” Machine learning does not just give us new machines to replace old machines, pushing human workers from one industry to another. Rather, it gives us new machines to replace us, machines that can follow us to virtually any new industry we flee to.

Since Mr. Ford’s book sent me down this rabbit hole in the first place, I reached out to him to see if he was concerned about all this for his own children: Tristan, 22, Colin, 17, and Elaine, 10.

He said the most vulnerable jobs in the robot economy are those involving predictable, repetitive tasks, however much training they require. “A lot of knowledge-based jobs are really routine — sitting in front of a computer and cranking out the same application over and over, whether it is a report or some kind of quantitative analysis,” he said.

Professions that rely on creative thinking enjoy some protection (Mr. Ford’s older son is a graduate student studying biomedical engineering). So do jobs emphasizing empathy and interpersonal communication (his younger son wants to be a psychologist).

Even so, the ability to think creatively may not provide ultimate salvation. Mr. Ford said he was alarmed in May when Google’s AlphaGo software defeated a 19-year-old Chinese master at Go, considered the world’s most complicated board game.

“If you talk to the best Go players, even they can’t explain what they’re doing,” Mr. Ford said. “They’ll describe it as a ‘feeling.’ It’s moving into the realm of intuition. And yet a computer was able to prove that it can beat anyone in the world.”

Looking for a silver lining, I spent an afternoon Googling TED Talks with catchy titles like “Are Droids Taking Our Jobs?”

In one, Albert Wenger, an influential tech investor, promoted the Basic Income Guarantee concept. Also known as Universal Basic Income, this sunny concept holds that a robot-driven economy may someday produce an unlimited bounty of cool stuff while simultaneously releasing us from the drudgery of old-fashioned labor, leaving our government-funded children to enjoy bountiful lives of leisure as interpretive dancers or practitioners of bee-sting therapy, as touted by Gwyneth Paltrow.

The idea is all the rage among Silicon Valley elites, who not only understand technology’s power, but who also love to believe that it will be used for good. In their vision of a post-A.I. world without traditional jobs, everyone will receive a minimum weekly or monthly stipend (welfare for all, basically).

Another talk by David Autor, an economist, argued that reports of the death of work are greatly exaggerated. Almost 50 years after the introduction of the A.T.M., for instance, more humans actually work as bank tellers than ever. The computers simply freed the humans from mind-numbing work like counting out 20-dollar bills to focus on more cognitively demanding tasks like “forging relationships with customers, solving problems and introducing them to new products like credit cards, loans and investments,” he said.

Computers, after all, are really good at some things and, for the moment, terrible at others. Even Anton intuits this. The other day I asked him if he thought robots were smarter or dumber than humans. “Sdumber,” he said after a long pause. Confused, I pushed him. “Smarter and dumber,” he explained with a cheeky smile.

He was joking. But he also happened to be right, according to Andrew McAfee, a management theorist at the Massachusetts Institute of Technology whom I interviewed a short while later.

Discussing another of Anton’s career aspirations — songwriter — Dr. McAfee said that computers were already smart enough to come up with a better melody than a lot of humans. “The things our ears find pleasant, we know the rules for that stuff,” he said. “However, I’m going to be really surprised when there is a digital lyricist out there, somebody who can put words to that music that will actually resonate with people and make them think something about the human condition.”

Not everyone, of course, is cut out to be a cyborg-Springsteen. I asked Dr. McAfee what other jobs may exist a decade from now.

“I think health coaches are going to be a big industry of the future,” he said. “Restaurants that have a very good hospitality staff are not about to go away, even though we have more options to order via tablet.

“People who are interested in working with their hands, they’re going to be fine,” he said. “The robot plumber is a long, long way away.”

via Will Robots Take Our Children’s Jobs? – The New York Times