Douglas Todd: The downside to increasing low-skill migration to Canada

Good overview of recent research on low-skill migration and the government’s repetition of the Harper government mistakes before correction after a few years:
Former Conservative prime minister Stephen Harper found himself in trouble in 2014 for jacking up the number of temporary foreign workers coming to Canada to work at places like McDonald’s and Tim Hortons.
Then-opposition leader Justin Trudeau, labour unions and the media went into overdrive — attacking Harper for pandering to the business lobby by inundating the market with hundreds of thousands of low-skilled temporary foreign workers, many of whom were vulnerable to exploitation.
To the surprise of many, Harper responded to the outcry. He sharply reduced the number of guest workers and brought in laws encouraging employers to improve working conditions and hire more people who were born in Canada or had become permanent residents.

Source: Douglas Todd: The downside to increasing low-skill migration to Canada

Immigration Cannot Significantly Reduce Inflation

Of note. Many of the arguments also apply to the Canadian context:

Many immigration advocates have recently called for increasing the number of immigrants allowed into the country to fill lower-wage jobs in order to decrease wages by increasing the supply of workers, thereby lessening inflation. In this post, we attempt to roughly estimate the possible impact of immigration-induced reductions in wages on consumer prices. We focus our analysis on the lower-wage sectors of the economy that primarily employ workers without a bachelor’s degree (the less-educated) because many of those advocating for more immigration have specifically called for more workers in these sectors. Our analysis shows that reducing wages for the less-educated is not an effective means of controlling inflation because such workers earn relatively little and as a result account for only a modest share of economic output. There is also the equally important question of whether reducing the wages of workers who are the lowest-paid is sound public policy.

Among our findings:

  • Reflecting their relatively modest average compensation, workers without a bachelor’s degree account for an estimated 25 percent of GDP. This means that even a substantial reduction of 10 percent in their wages could likely reduce consumer prices by only an estimated 2.5 percent. More educated workers and capital account for most of the economy.
  • If we look at just lower-wage occupations done primarily by those without a bachelor’s degree, we find that they account for only 22 percent of GDP. As a result, a 10 percent reduction in wages in these occupations could reduce prices by only an estimated 2.2 percent.1
  • It might be possible to reduce wages in specific occupations by dramatically increasing the number of workers in relatively few occupations. But since individual lower-paid occupations account for only a tiny share of the economy, the impact on overall consumer prices would be correspondently tiny. For example, the compensation earned by construction and extraction workers is only 2.2 percent of GDP, for cleaning and maintenance it is 1 percent, for food preparation and serving it is 1.1 percent, and for healthcare support it is 0.9 percent.
  • Prior to Covid, workers, including those without a bachelor’s degree, have generally seen their wages decline or grow very little for more than two decades, so reducing their wages by admitting more immigrants can be seen as unfair and unwise.
  • More than one in seven of these less-educated workers are currently eligible to receive cash payments from the Earned Income Tax Credit and Additional Child tax Credit — the nation’s largest cash assistance programs for low-wage workers. Reducing the wages of such workers could undo some of these important efforts to help low-income workers.
  • Nearly two-thirds of all children in poverty in America are dependent on a worker who does not have a bachelor’s degree. Using immigration to reduce wages for less-educated workers has significant negative implications for American’s low-income children.

Source: Immigration Cannot Significantly Reduce Inflation

UK’s expensive visa fees ‘could deter NHS staff and scientists’

Supply and demand theory would suggest the higher costs will have an impact on the numbers and attractiveness of the UK as an immigration destination:

The UK’s “sky-high” visa fees could deter vital NHS staff and the “brightest and best” scientists that Boris Johnson wants to attract with his new immigration policy, experts have warned.

Nurses, lab technicians, engineers and tech experts who currently flock to the UK from the EU may not be able to afford to do so if the prime minister’s proposed immigration overhaul becomes law.

At £1,220 per person, or £900 for those on the shortage occupation list, the fees are among the highest in the world – and this is before charges for using the NHS and costs for sponsoring employers are taken into account.

Comparisons with fee structures in other countries, published by the Institute for Government (IfG) thinktank, show that a family of five with a five-year work visa for one individual would have to pay £21,299 before they could enter in the country.

This includes the annual £400 health surcharge that must also be paid upfront per person. This is double the fee charged by Australia and about 30 times the amount charged by Canada, where it costs just over £10,000 for a family for five years. Germany charges £756 for entry for a family of that size.

The fee comparisons are equally stark for individuals. A single person who wants to come to the country will be charged up to £3,220 for five years. If they want to move to the UK with a spouse, the cost would rise to £6,500 for a five-year work stint.

UK visa fees compared with other countries
UK visa fees compared with other countries Photograph: Institute for Government

This compares with Canada, which charges £220 for an individual visa for three years; Germany, which charges £147; and France, which charges £2,075, according to the data supplied to the IfG. Luxembourg charges €50 (£42) for a visa and€80 for a residents permit.

Source: UK’s expensive visa fees ‘could deter NHS staff and scientists’

And on the gender impacts:

The British government’s plan for a post-Brexit immigration overhaul was designed to wean the economy off its reliance on cheap foreign labor. But in the process, women’s groups warned on Thursday, women will suffer disproportionately.

The new points-based system will give precedence to occupations in which women are underrepresented, favor male migrants over female and deepen gender inequality, according to the Women’s Budget Group, an independent network that promotes gender equality.

“The new immigration system roundly fails to understand the lived experience of women, many of whom are prevented from accessing paid work by the weight of unpaid work — caring for children, older people and those with disabilities — that successive governments rely upon them to do,” said Sophie Walker, the chief executive of the Young Women’s Trust, a British feminist organization.

Under the new rules, which will be implemented next January, applicants will be required to receive a job offer with a salary of at least 25,600 pounds, about $33,300. The salary threshold will be lower in special cases where there might be a shortage in skills, such as in nursing.

By and large, however, that requirement will work against women, who are more likely to work in sectors like home and senior care that are relatively poorly compensated, even though the skill levels of such women are relatively high, women’s advocates say.

“Care workers’ average annual salaries stand at just £17,000, not because care work is ‘low-skilled,’ but because the work force is 80 percent female and therefore undervalued and underpaid,” says Mandu Reid, the leader of the Women’s Equality Party.

Imposing the salary requirement would mean “shutting out care workers, piling pressure on women to take on yet more unpaid care, and widening the existing social care gap between need and provision,” she said.

Women are also four times more likely than men to leave paid work to shoulder unpaid caring responsibilities for children and older relatives. This is one cause of the gender pay gap and gender inequality, the Women’s Budget Group found.

As a result of these inequities, major industries like food production, hospitality, health and social care that rely on female migrant workers are likely to see staff shortages after the new measures are put into place.

In the points-based system, the government gives top priority to scientists, engineers, academics and graduates in science, technology, engineering and mathematics, or STEM, once again to the detriment of women because of the gender disparities in those professions.

“There is a great emphasis on wanting to attract scientists to the U.K. under the new system, but it is another well-known fact that women are underrepresented in the sciences,” said Adrienne Yong, a lecturer in law at the City Law School in London.

“That the U.K. will give a Ph.D. in STEM subjects 10 more points than Ph.D.s in other subjects already puts women on a back foot,” she said, “as there is already a problem with female students doing STEM subjects, much less continuing further education to a doctoral level with that specialism.”

On Wednesday, the cabinet minister responsible for migration policy, Priti Patel, suggested that around eight million “economically inactive” people in Britain could be trained to fill such shortages, but experts say that many of those people are women who are already providing full-time care for children and families.

“It feels like they just want us to fill the badly paid jobs while the men and foreigners will get the higher-paying jobs,” said Amy Pears, a mother of three who left her job as a professional caregiver and went on benefits in 2015 because she could not afford child care. “My mother is disabled, so between her and the three children I have my hands full.”

The Women’s Equality Party says that without substantial government investment in child and elder care, women are put into a position where they simply cannot work.

“These shortsighted plans are in fact more likely to exacerbate the shortages in formal care, leaving it to women to pick up unpaid and increase the number of ‘economically inactive’ full-time carers,” Ms. Reid said.

Women’s groups warned that shutting out foreign workers would put more pressure on women who are already in Britain, particularly caregivers.

“Without extra colleagues from abroad, U.K. carers are going to have even less time to do the job they’re employed to do and offer people the dignity they deserve,” Ms. Walker said. “This policy makes it an inevitability that this exhausted system will come under further strain, while female family members will increasingly be expected to pick up the pieces as the system continues to erode.”

Ms. Pears said that many of her European friends and former colleagues, who played important caregiving roles, would be locked out of the new system because they did not qualify for the salary threshold or education qualifications.

“These people are carrying a huge burden for our country, and the truth of the matter is we need them,” she said. “Without them we are putting our services at risk.”

Source: Women Will Be Hit Hard by U.K.’s New Immigration Rules, Experts WarnWith its minimum salary requirements, the new system would particularly affect female migrants, who tend to cluster in lower-paid occupations.By Ceylan Yeginsu

Bar on low-skilled immigrants will hurt UK, say bosses

Of note. Canada also gives priority to higher skilled immigrants (save with respect to family and refugee classes), with lower skilled workers generally being Temporary Foreign Workers:

A new immigration system that places severe limits on low-skilled immigration risks inflicting “massive damage” to livelihoods and communities, one of Britain’s most senior business figures has warned.

Carolyn Fairbairn, head of the Confederation of British Industry, issued her sternest warning to date about the new “global system” being drawn up by the government, which is expected to place major restrictions on visas for low-skilled workers. The business community, she said, was very concerned about suggestions that migrants earning under £30,000 a year might struggle to win the right to work in the UK.

“This idea that there’s a £30,000 cap below which is described as low-skilled and not welcome in the UK is a damaging perspective for government to have for our economy,” she said. “People earning less than £30,000 make a hugely valuable contribution to our economy and society, from lab technicians to people in the food industry.

“Many of our universities have staff on less than £30,000. So our offer to government is to work with us. We understand the challenge of building public trust, but we think there are much better answers.”

Her comments came in the week that Theresa May claimed that British firms struggling to fill low-skilled jobs should train British workers to fill any gaps. While the cabinet has agreed on the principle that all migrants should be treated the same after Brexit, with EU citizens no longer given preferential treatment, the government’s white paper on the new system has still not been published.

Pro-business ministers such as the chancellor, Philip Hammond, and the business secretary, Greg Clark, have been keen to heed the warnings of industry about introducing strict rules too quickly. However, May won support for a tougher system after the independent migration advisory committee (MAC) backed a clampdown on low-skilled workers.

Fairbairn said: “Our economy is hugely reliant in absolutely critical sectors on people who are so-called low-skilled, such as our care sector, caring for the older generation. We have a nursing shortage. This is a massively important sector.

“It is reasonable to want to bring the level of immigration down. But we must not underestimate the scale of the change that this would mean to our economy and the massive damage it would do to livelihoods and communities if we move too quickly.

“At the very least, we need to recognise there needs to be a transition period that needs to be reasonably long. Businesses can adapt, but they can’t do that overnight. If we do procure a system like this quickly, and some of the talk is that we would bring it in very quickly after the end of the Brexittransition period, we would hugely damage our economy. Jobs will be lost, communities will be damaged. There is a strong alarm bell from business on this.”

MPs have been angered by the suggestion that they may not be able to see details of the white paper before they vote on May’s Brexit deal next week. Sajid Javid, the home secretary, said last week that the plan should be published before the end of the year.

A Home Office spokesperson said: “When we leave the EU, free movement under EU law will end and we will bring forward a new border and immigration system that focuses on the skills and talents people have to offer, not where they come from.

“It will ensure the UK continues to attract the people the nation needs to compete on the global stage, while ensuring that we take control of immigration, continue to secure our border, and reduce net migration to sustainable levels.”.

Source: Bar on low-skilled immigrants will hurt UK, say bosses