Immigration Critics Wrong: Fewer Visas Did Not Help U.S. Workers

Useful analysis of this natural experiment given US government policies remained largely unchanged:

The number of new foreign-born workers in the United States declined because of the Covid-19 pandemic, but U.S. workers were not better off, according to new research. That refutes a long-held anti-immigration argument and addresses a concern raised by some labor unions. Worker shortages, partly a result of restrictive immigration policies and made worse by the pandemic, have contributed to empty shelves in supermarkets, shorter hours in restaurants and elsewhere, and an inability for many companies to fill jobs and grow in the United States.

The research focused on H-1B visas for high-skilled foreign nationals, H-2B visas for nonagricultural seasonal workers, and J-1 visas for summer work travel. The focus is timely because some labor unions have argued against the Biden administration increasing by 20,000 the number of H-2B visas, even though such visas help reduce illegal entry and prevent at least some of the dangerous border crossings that cause hundreds of deaths annually, such as the recent drowning of a 7-year-old girl from Venezuela in the Rio Grande.

“The Covid-19 pandemic resulted in a sharp drop in international migration to the United States, but there is no evidence the entry of fewer foreign workers on temporary visas improved outcomes for U.S. workers,” concluded Madeline Zavodny, an economics professor at the University of North Florida and a former economist at the Federal Reserve Bank of Atlanta, in a new report for the National Foundation for American Policy (NFAP).

“The research examined labor markets where more temporary foreign workers were employed prior to the pandemic and found the drop in H-2B program admissions did not boost labor market opportunities for U.S. workers but rather, if anything, worsened them,” writes Zavodny. “The results also do not indicate gains for similar U.S. workers in labor markets that had relied more on the H-1B and J-1 visa programs. There is no evidence of improved labor market opportunities for U.S. workers in the leisure and hospitality sector during the summer months as a result of the virtual shutdown of the J-1 Summer Work Travel program.

“There is also no evidence of faster employment growth or lower unemployment rates for college graduate U.S. natives as a result of decreased admissions via the H-1B program. Instead, labor markets that had been more reliant on temporary foreign workers via the H-1B program before the pandemic appeared to have had more unfilled jobs during the pandemic. The large drop in new temporary foreign workers via the H-1B program thus does not appear to have led to better labor market outcomes for the U.S. natives who might compete with those workers for jobs.”

Among the findings of the report are new estimates that show the number of working-age migrants from abroad has declined:

·       “The U.S. received some 630,000 fewer working-age international migrants between mid-March 2020 and mid-March 2021 than at its peak during the corresponding period in 2014-2015, a drop of over 75% in inflows.

·       “Even if new arrivals in 2019-2021 had maintained just the average annual pace over 2010-2019, the U.S. would have received almost 600,000 more working-age international migrants than it actually did during that two-year period.

·       “The decrease in working-age international migrants was similar for migrants who had at least a bachelor’s degree and those who had at most a high school diploma, both down 75% in 2020-2021 from their peak year-to-year inflow during the previous decade.

·       “The number of J-1 exchange visitor visas issued plummeted from about 350,000 per fiscal year to about 100,000 in FY 2020 and a similar level in fiscal year (FY) 2021. The drop in the Summer Work Travel (SWT) program within that visa category was even more precipitous, falling from over 100,000 annually to under 5,000 in FY 2020.

·       “The number of H-1B specialty occupations visas issued fell from almost 190,000 in FY 2019 to about 125,000 in FY 2020 and under 62,000 in FY 2021.

·       “The number of H-2B non-agricultural worker visas issued fell by almost half in FY 2020 before returning to near its pre-pandemic level in FY 2021.”

Zavodny notes it is tempting to argue that some of the increase in labor market opportunities for workers is due to reduced international migration. “The analysis here gives little reason to believe any gains for U.S. workers are linked to lower admission of temporary foreign workers,” writes Zavodny. “The ongoing shortages of workers in many labor markets reflect U.S. employers’ need for additional workers from both domestic sources and abroad. The research also examines data on job postings and the results point to jobs, particularly highly skilled jobs, going unfilled when temporary foreign workers were unable to enter the country. The decrease in new temporary foreign workers in the U.S. as a result of the pandemic thus does not appear to have led to better labor market outcomes for U.S. natives but rather to jobs left unfilled.”

Immigration critics have insisted that fewer legal visas would translate into gains for U.S. workers. The Covid-19 pandemic created a natural experiment to test that proposition and found it to be untrue. The results show a simplistic, zero-sum argument that restricting the size of the labor force benefits U.S. workers is incorrect. Such an argument fails to take into account many factors, including the role played by capital and entrepreneurs in a market economy. Instead, imposing visa restrictions and having fewer available workers reduce economic growth and make it more difficult for businesses to expand and deliver products and services to Americans.

Source: Immigration Critics Wrong: Fewer Visas Did Not Help U.S. Workers

Todd: High migration might trim wages … in some places, in some jobs

Valid notes of caution by the economists cited:

University of B.C. economists Craig Riddell and David Green, and Carleton University’s Christopher Worswick, caution both boosters and critics of high in-migration to temper their rhetoric.

The economists could have been referring to Immigration Minister Ahmed Hussen, who on Nov. 1 pushed up immigration levels while showcasing a prosperous newcomer family.

“Our ambitious plan,” Hussen said, “will benefit all Canadians because immigration contributes to our economic growth and keeps our country competitive in a global economy.”

The federal Liberals’ target for immigrants in 2020 is 340,000, which is a 36 per cent jump from 250,000 in 2014.

Without publicizing it, Ottawa has also sharply increased the number of temporary workers. The number of non-permanent residents in Canada last year, 891,000, was more than twice the total in 2006. 

More than 330,000 of them are international students. Another 55,000 are temporary foreign workers, while 289,000 are “international mobility” workers.

Metro Vancouver gets almost 30,000 immigrants each year, in addition to being home to 130,000 non-permanent residents, mostly international students (who also get work visas).

The economists focused on immigration rates, not necessarily temporary workers, in concluding that “increased immigration inflows have small impacts on wages and employment in the medium to long run.”

The UBC economists, however, caution that “immigration cannot be relied upon as a source of higher per capita incomes.”

In a major article in Policy Options, the three economists warn “it is important not to get distracted by individual stories of successful immigrant entrepreneurs. They certainly do exist, but that is not really relevant.”

The economists challenge the immigration minister’s claim that increasing immigration rates “will help us ease the great challenges of the coming years, such as … labour shortages linked to Canada’s aging population.”

It’s not possible to replace the aging baby-boomers, the economists say. “The results are definitive: Immigration is not a means to substantially alter Canada’s age structure and impending increase in the dependence ratio. Inflows of immigrants are just too varied in their age structure.”

Similarly, SFU’s Wu Qiyan says bringing new people to Canada’s major cities is a “double-edged sword.”

At one level, Wu said, an influx of newcomers into Toronto and Vancouver can “create less job opportunities for locals,” while raising rents and housing costs.

On the other hand, Wu said, more people “can also create more opportunities,” by increasing consumers and businesses.

UBC economist Thomas Lemieux said the question of whether more immigrants and temporary residents reduce wages is one of the most controversial in his field, particularly in light of rising nativist movements in the U.S., Europe and Quebec.

Lemieux’s own research focuses on how immigrants themselves fare in Canada’s labour market, with the general conclusion being they’re doing worse financially than in the 1990s.

Newcomers from Europe “tend to do much better” than those from India and other South Asian countries, Lemieux said, “even while there are fewer and fewer coming from Europe.”

Virtually every labour economist says the Canadian public and prospective immigrants deserve more research into, and more robust discussion of, the links among immigration, non-permanent workers, economics and wages.

With Canadian politicians making the country a unique global experiment in mass migration, few issues call out for more investigation.

via Todd: High migration might trim wages … in some places, in some jobs | Vancouver Sun