Immigration policies must improve to meet economic needs: Report

Image by Loutron Glouton via Flickr

OTTAWA — Immigration policies need to be modernized to avoid a stifling of economic growth in the future caused by labour shortages, according to a new report from the Conference Board of Canada.
The Ottawa-based think-tank suggests, among other things, placing more importance on the skills of prospective immigrants and whether they match the labour-force needs of Canada.
The report, written by the Conference Board's chief economist Glen Hodgson, said the recent recession provided some relief from tight labour markets.
However, he predicted the supply of workers will soon become an issue for the country's economic development with steady job growth once again the norm, and the large baby-boomer generation either at or approaching retirement age.
Hodgson wrote: "A country's long-term potential for economic growth, or at least sustainable economic growth, is essentially driven by three factors: growth in the labour force (and total hours worked), investment in physical capital and increased productivity."
He said that while Canada has generally outperformed other industrialized countries in labour-force growth in recent decades, it has lagged in capital investments and improving productivity.
Hodgson reasoned that, without improved immigration policies, Canada will hit a wall in terms of growing the workforce, given that the current birthrate of 1.66 children per woman is far from the level of 2.1 that's considered enough to sustain a population.
The Conference Board report recommends: more weight be given to immigration applicants' skills in relation to Canada's needs: that immigration processes and policies be streamlined between different levels of governments; an expansion in the use of temporary foreign workers to fill short-term needs; involving employers more in the immigration decision-making process; making it easier for temporary foreign workers and foreign students to become permanent residents; and improved recognition of foreign professional credentials.
While promoting more consideration of economic elements in immigration, Hodgson doesn't recommend doing away with other factors such as family unification, humanitarian reasons and protecting refugees.
"An easy way to achieve the economic objective would be to maintain the number of annual immigrants meeting social objectives or criteria and steadily increase the number selected by economic factors," he said.
The Conference Board's report assumes the rate of immigration will grow to about 350,000 per year by 2030 from the government's current target of as much as 265,000.
Despite urging more co-ordinated immigration programs between different levels of government, the Conference Board is not recommending the federal government have a monopoly on this area of public policy.
"Since provincial governments tend to be closer to the ground in terms of their interface with business, their engagement is essential," the report said.

© The Financial Post

Related articles by Zemanta

• Boomer retirements to limit Canadian economic growth: Conference Board (canada.com)
• Canadian immigration, changes to the Federal skilled worker category 2010 (mojanemojan.com)
• Major Changes Announced for the Canadian Immigration Investment Program (prweb.com)
• Canadians' support for immigration not without limits: Poll (canada.com)
• Immigration policies must improve to meet economic needs: report (financialpost.com)
• Immigration policies must improve to meet economic needs: Report (canada.com)
• Canada facing labour shortages - Immigration can help fill the gap if done right (newswire.ca)
• Canada looks for immigrants with skills, money (cbc.ca)

Why good jobs are going unfilled

Image by Cria-cow via Flickr

By David Frum, CNN Contributor

July 6, 2010 1:27 p.m. EDT

Washington (CNN) -- We're getting to the point where even good news comes wrapped in bad news.
Good news: Despite the terrible June job numbers (125,000 jobs lost as the Census finished its work), one sector continues to gain -- manufacturing.
Factories added 9,000 workers in June, for a total of 136,000 hires since December 2009.
So that's something, yes?
Maybe not. Despite millions of unemployed, despite 2 million job losses in manufacturing between the end of 2007 and the end of 2009, factory employers apparently cannot find the workers they need. Here's what the New York Times reported Friday:
"The problem, the companies say, is a mismatch between the kind of skilled workers needed and the ranks of the unemployed.
"During the recession, domestic manufacturers appear to have accelerated the long-term move toward greater automation, laying off more of their lowest-skilled workers and replacing them with cheaper labor abroad.
"Now they are looking to hire people who can operate sophisticated computerized machinery, follow complex blueprints and demonstrate higher math proficiency than was previously required of the typical assembly line worker."
It may sound like manufacturers are being too fussy. But they face a real problem.
As manufacturing work gets more taxing, manufacturers are looking at a work force that is actually becoming less literate and less skilled.
In 2007, ETS -- the people who run the country's standardized tests -- compiled a battery of scores of basic literacy conducted over the previous 15 years and arrived at a startling warning: On present trends, the country's average score on basic literacy tests will drop by 5 percent by 2030 as compared to 1992.
That's a disturbing headline. Behind the headline is even worse news.
Not everybody's scores are dropping. In fact, ETS estimates that the percentage of Americans who can read at the very highest levels will actually rise slightly by 2030 as compared to 1992 -- a special national "thank you" to all those parents who read to their kids at bedtime!
But that small rise at the top is overbalanced by a collapse of literacy at the bottom.
In 1992, 17 percent of Americans scored at the very lowest literacy level. On present trends, 27 percent of Americans will score at the very lowest level in 2030.
What's driving the deterioration? An immigration policy that favors the unskilled. Immigrants to Canada and Australia typically arrive with very high skills, including English-language competence. But the United States has taken a different course. Since 2000, the United States has received some 10 million migrants, approximately half of them illegal.
Migrants to the United States arrive with much less formal schooling than migrants to Canada and Australia and very poor English-language skills. More than 80 percent of Hispanic adult migrants to the United States score below what ETS deems a minimum level of literacy necessary for success in the U.S. labor market.
Let's put this in concrete terms. Imagine a migrant to the United States. He's hard-working, strong, energetic, determined to get ahead. He speaks almost zero English, and can barely read or write even in Spanish. He completed his last year of formal schooling at age 13 and has been working with his hands ever since.
He's an impressive, even admirable human being. Maybe he reminds some Americans of their grandfather. And had he arrived in this country in 1920, there would have been many, many jobs for him to do that would have paid him a living wage, enabling him to better himself over time -- backbreaking jobs, but jobs that did not pay too much less than what a fully literate English-speaking worker could earn.
During the debt-happy 2000s, that same worker might earn a living assembling houses or landscaping hotels and resorts. But with the Great Recession, the bottom has fallen out of his world. And even when the recession ends, we're not going to be building houses like we used to, or spending money on vacations either.
We may hope that over time the children and grandchildren of America's immigrants of the 1990s and 2000s will do better than their parents and grandparents. For now, the indicators are not good: American-born Hispanics drop out of high school at very high rates.
Over time, yes, they'll probably catch up -- by the 2060s, they'll probably be doing fine.
But over the intervening half century, we are going to face a big problem. We talk a lot about retraining workers, but we don't really know how to do it very well -- particularly workers who cannot read fluently. Our schools are not doing a brilliant job training the native-born less advantaged: even now, a half-century into the civil rights era, still one-third of black Americans read at the lowest level of literacy.
Just as we made bad decisions about physical capital in the 2000s -- overinvesting in houses, underinvesting in airports, roads, trains, and bridges -- so we also made fateful decisions about our human capital: accepting too many unskilled workers from Latin America, too few highly skilled workers from China and India.
We have been operating a human capital policy for the world of 1910, not 2010. And now the Great Recession is exposing the true costs of this malinvestment in human capital. It has wiped away the jobs that less-skilled immigrants can do, that offered them a livelihood and a future. Who knows when or if such jobs will return? Meanwhile the immigrants fitted for success in the 21st century economy were locating in Canada and Australia.
Americans do not believe in problems that cannot be quickly or easily solved. They place their faith in education and re-education. They do not like to remember that it took two and three generations for their own families to acquire the skills necessary to succeed in a technological society. They hate to imagine that their country might be less affluent, more unequal, and less globally competitive in the future because of decisions they are making now. Yet all these things are true.
We cannot predict in advance which skills precisely will be needed by the U.S. economy of a decade hence. Nor should we try, for we'll certainly guess wrong. What we can know is this: Immigrants who arrive with language and math skills, with professional or graduate degrees, will adapt better to whatever the future economy throws at them.
Even more important, their children are much more likely to find a secure footing in the ultratechnological economy of the mid-21st century. And by reducing the flow of very unskilled foreign workers into the United States, we will tighten labor supply in ways that will induce U.S. employers to recruit, train and retain the less-skilled native born, especially African-Americans -- the group hit hardest by the Great Recession of 2008-2010.
In the short term, we need policies to fight the recession. We need monetary stimulus, a cheaper dollar, and lower taxes. But none of these policies can fix the skills mismatch that occurs when an advanced industrial economy must find work for people who cannot read very well, and whose children are not reading much better.
The United States needs a human capital policy that emphasizes skilled immigration and halts unskilled immigration. It needed that policy 15 years ago, but it's not too late to start now.