Wednesday, June 6, 2012

Why import workers in a bad economy?

When discussing various laws related to immigrants, I invariably hear someone say "we don't want immigrants taking our jobs".  And these aren't even racists worrying about that. It's natural when your country has a serious unemployment problem to wonder why in the hell your government would make it easier for workers to move there.

The problem, frankly, is that politicians don't explain the subject very clearly. I won't speculate as to why they don't, other than to note that the topic is rather boring for many people. However, it's important and because people keep asking this question, it deserves an answer. I've already talked a bit about how laws covering immigration and emigration often have little to do with the data, but importing workers into a high-unemployment area can make perfect sense.

Image courtesy Wikimedia Commons
There are several types of unemployment, such as frictional and cyclical unemployment. In the case of highly skilled workers, the government is trying to address structural unemployment, a type of unemployment which is very durable and hard to fix. Imagine you have a company and it's doing really well and you need to hire a new system administrator, a DBA, two top-notch C++ developers and a front-end developer. Plenty of people apply, but no one has the skills you need. That's structural unemployment: when available workers skills do not match available jobs.

The common rebuttal is "train them!" But this has several problems. First, businesses need these employees now, not after a years of training. So people say "OK, we'll patch the problem now and then invest more in universities to deal with this." Patching the problem now means importing highly skilled workers (or letting your businesses suffer).

People sometimes still don't believe this, but I'll give you an example. Years ago I was applying for a job with a small company that was nonetheless very well known in their field. The owner of the company was interviewing me and he showed me a custom programming language they had designed to make life easier for their customers. After glancing about at a programming language I had never seen before, I turned to the owner and asked him "do you know what an SQL injection attack is?" I showed two different vectors they had for it. He was stunned. He looked at me and said they had this problem for years but had only discovered it two weeks ago. I got a job offer out of that (which I declined).

Even if you train people really, really well in my field, most of them won't be able to do that without a plenty of experience (many top-notch devs read my blog, so it probably won't seem too remarkable a feat to them, but it is for someone who doesn't know the field). That's why your country may have high unemployment and highly skilled workers still get imported: we can bring immense value to an enterprise.

Beggar Cat
Gratuitous cat picture
I took this while on vacation in Corsica
OK, fine. That's OK in the short term, but what about the long term? What happens at university? You can't force people to study for these highly skilled professions and, as it turns out, they're generally not doing that. Students aren't graduating with engineering, maths or physics degrees ... at least not at the rate they're studying art history or philosophy (I'm not bashing the latter two. If that's what you want to study, fine, but there's still a demand for skilled workers). Why aren't students going for high demand/high pay jobs? I haven't the foggiest notion (but if you want to move to another country, you know what to do!)

And if you could convince them to study those high demand skills, you find out that some don't have the aptitude (there are some studies in my field which unfortunately back this up, but the scope of the problem is unclear) and those with the aptitude may decide they don't like the field no matter how much they are paid (One programmer I worked with in Amsterdam was a medical doctor, but he decided he hated it).

In short, you need willing and qualified workers and the Universities aren't putting out enough of them, If you decide to beef up your university system, you then have to ask where that money's coming from and you have another political fight on your hands, but even after years of study, the graduates will still likely need experience in their field to get qualified. This is not an easy problem to solve.

Finally, you have the problem with economic growth. When I mentioned the example of your business needing to hire several new skilled workers, imagine a booming economy with thousands of businesses in the same boat. You can't supply the labor as fast as the market demands it. These people don't appear from nowhere. So either you turn your economic boom into a bust or you import the skilled workers. If you do import the skilled workers, your economy can continue to grow and offer opportunities beyond just the skilled jobs.

Paul in the Pool
My friend Paul messing about in the
pool in the Corsican manor we rented
Working against many readers of this blog is the fact that most companies want to hire local labor because they understand the process and the risk is far lower. It's not like they're saying "oh, I'll just import someone from another country". That can be very risky and companies know that, but it's my experience in talking to employers who are struggling to find workers that their resistance to importing them is because the laws make it very difficult or confusing.


  1. Very good, very clear analysis. One reason that I know of first hand why students don't go for those math/science diplomas is (and I'm sure you know this) is gender discrimination. My two daughters have been educated in the French systems. The elder was consistently oriented toward Literature and was told over and over that she had no affinity for math and therefore should not do a Science Bac. One and only one teacher tried to dissuade his fellow teachers after my daughter got the second-highest grade on a very tough high school math test. Once she got her Bac-L however and looked at what the French system had to offer, she was pretty disgusted. All the university programs that that interested her wanted Bac-S students. So she dumped the French system entirely and went to Canada for university. She just aced both high-level college stats class and Intro to Neuroscience so I'd say that that lone teacher in her high school was on to something.

    I watched the same thing happen at my younger daughter's high school. There was a consistent orientation of girls toward L. She is in S but is only one of a handful of girls. In her case there was no real encouragement to do S but no attempt to orient her otherwise: she is the eptitome of a geek who thinks Physics is fun and spends her vacation in the U.S. taking programming classes at the University of Washington. One might think that French system would want to hold onto a student like her. Not really, They don't seem to care what she does and she's already making noises about following her sister to Canada .

    I'm using the French system here as an example but I think stories like these are quite common everywhere. There is little if no encouragement given to young women who want to work toward math/science degrees. On the contrary they are systematically oriented toward other fields based on the biases of the teachers (and sometimes parents too). It's a terrible waste of human talent. My .02.

  2. In my mind it's actually the perceived difficulty / importance of the work which affects the natives* opinion towards immigrate workers. This fundamentally rules their thinking.

    * For tasks they deem as critical the origin of the worker becomes irrelevant.

    Ask any native* if they would prefer a 2012 graduate to fix the two faulty engines of the 747 they are just about to board over an immigrant with 15 years experience of fixing them I guess the majority will choose the latter.

    * For tasks that are perceived to be sub-class jobs you'll find the same reaction.

    Ask a native if they would care who carries out their rubbish or cleans their living / working space and again the majority would be indifferent about it. More importantly the majority would not take such jobs even if they were jobless.

    It is when a job ( or wage ) is desirable that immigration fears arise. You happen to have experience in a trade that is desirable.

    *native in the very loose terms. I attempting to refer to someone who is nationalised and has the opinion their jobs are being taken.

  3. "Ask a native if they would care who carries out their rubbish or cleans their living / working space and again the majority would be indifferent about it. More importantly the majority would not take such jobs even if they were jobless."

    Not so sure about this. While the natives wouldn't necessarily want to take these jobs for themselves, they do think that unemployed natives (basically other people) *ought* to take them regardless of how dangerous they are or poorly paid. You heard a lot of this recently in the U.S. when the farmers were having trouble in the South bringing in the crops because the immigrant labor fled. Some people were saying that the unemployed should be forced to take these jobs. And in the end they actually did force some people to do them: convicts from local prisons. The farmers did not find this satisfactory at all but it had a lot of appeal for the general public. Go figure.

  4. What you're saying is dead-on.

    I work at a fortune-100 semiconductor company in Silicon Valley managing a group of software engineers. I need candidates with high skills and aptitude. The offers I give to new university graduates (top students from top schools) are $90K-$95K for candidates with a BS degree.

    The problem is that the candidates that are capable of doing the job are few and far between, and the ones that receive that offer have multiple similar offers from Facebook, Google, Apple, etc.

    I sometimes don't understand when people say there is a recession. The only time I'm aware there is a recession is when I read the news. When I deal with these candidates that have six job offers right out of school I just can't believe it.

    But, when I look at it more objectively, it's exactly as you describe it. I passed over 100% of the non-technical people and 90% of the technical ones when I chose those candidates, just as all the other employers did. It really is structural unemploymjent.