Category: Uncategorized

Choose People

Posted on March 2, 2023 by - Uncategorized

I have an article in the March/April 2023 issue of Foreign Affairs titled: “People over Robots: The Global Economy Needs Immigration Before Automation.” I encourage you to read the whole article there, but I wanted to add a little allegory that I think clarifies some main points and addresses the most commonly heard objections.

My key argument is that in the current global economy we have some of the scarcest resources on the planet devoting themselves to economizing one of the most abundant resources on the planet. Highly talented and capable business leaders and highly educated and trained scientists and engineers are working to reduce the use of labor by throwing themselves at developing labor saving technologies.  For instance, Jeff Bezos, Elon Musk, and Larry and Sergei of Google have all at some stage had teams of superbly educated people working on developing a self-driving truck, despite the millions of people across the world willing and able to drive trucks.  Now of course “economizing” should work in reverse—people should invest in production techniques that use less of what is scarce, not use less of what is abundant.

The problem is that in the current configuration of the global economy, capital can zip around the world at the speed of light (according to the BIS in April 2022 the volume of foreign exchange markets was estimated to be $7.5 trillion a day). Similarly, ideas and communication know no borders or boundaries, and lower administrative hurdles and improvements in logistics means even physical goods move around at such low cost that the production process of goods is often split across many countries.

But borders in rich countries–especially for “core skilled” people like truck drivers—prevent people from moving legally to jobs and employers from hiring people.  Hence the cost to Amazon of a truck driver in the United States is based on prices that do not reflect global scarcity.  As a result, their pattern of research and development is devoted to trying to replace people with machines. This is not because there are not people who would drive trucks for Amazon in the world, and not because “natural” scientific progress has made machines that drive trucks easy and cheap, but because in a global economy which is “flat” for capital, information, and goods, there is a legal “cliff at the border” for labor, as prices don’t reflect scarcity.

Therefore, we have the perverse situation that the richest people are hiring some of the most talented and technologically sophisticated people on the planet to engage in innovation aimed at driving down the demand for labor—the major and often only asset of the world’s poor.

From long experience of making this argument, I know the first objection is that I am somehow “against” technology or that, in trying to create conditions in which people can choose people over machines I am a modern Luddite.  But I am not against technology nor against investments in innovations that improve productivity if they respond to actual global scarcity.   But no economist believes that simply improving production processes in physical terms creates social value.

Let me give a simple allegory about sugar:

For a very long time the US has maintained strict quotas on the imports of sugar (due to the politically influential domestic sugar industry).  From 1999 to 2016 these restrictions led the US refined sugar price to be about double the world price (34 vs 17 cents a pound).

Sugar was dear in the US not because there was a global shortage of available sugar or because global production costs were high but because of US trade policy of not allowing US consumers (and producers of sugar using products) to buy the amount of sugar from abroad that they wished.

Now, suppose the import quota covers the importation of refined sugar but does not cover the importation of pre-sweetened cocoa mix that is 95 percent sugar and 5 percent flavoring.  Then a clever entrepreneur could buy refined sugar in a sugar producing country for 17 cents, add cocoa at 2 cents per pound, ship the mixture to the USA for 2 cents a pound, and then invent a technological process that extracts the cocoa for 5 cents a pound.  Viola, this new “technology” produces refined sugar available to sell in the USA for 26 cents a pound (17 plus 2 plus 2 plus 5) which can be sold in the USA for 34 cents a pound.

There are now three “technologies” for producing refined sugar for sale in the USA: (a) grow it and refine it in the USA, (b) grow it and refine it abroad and ship it to the USA and (c) grow it and refine it abroad, add cocoa, ship it to the USA, take the cocoa out.

I hope we can all agree that, even if it makes financial sense for the individual entrepreneur at the import quota driven gap between world and domestic prices, this new technology is wasteful and, no matter how much cool science and technology and engineering—or even AI–goes into extracting added cocoa from sugar, doing so is just economically dumb.

Moreover, suppose that our sugar importing entrepreneur hired a team of scientists and they invented improvements in the cocoa extraction process that lowered the cost from 5 cents a pound to 2 cents a pound.  This would be a technological “innovation” and “productivity” would go up and, depending on the investment to make the breakthrough, might be a profitable decision.  But, whether it makes financial sense or not for the individuals involved, they are responding to distorted prices, not scarcity, and the world is not better off from their invention and innovation.

There is an old saying that “necessity is the mother of invention” but it is also true that policies can create false necessity and false necessity can be the mother of costly, resource consuming, dumb inventions.

If we collectively devoted the same levels of investment and inventive power and entrepreneurship to developing more and better legal pathways for people to move across borders to needed jobs, including a variety of modalities for labor mobility, we could solve the growing challenge of labor scarcity. At the same time, we would meet the needs for essential jobs in a way that, instead of driving down demand for labor, allows millions of people new opportunities and helps them move out of poverty.

 

Technical Note:

The following paper “Future of the Labor Market: Labor Mobility or I, Robot” was written as an independent research project by Masoomeh Khandan in Spring 2022, and as such represents her own views, not the views of Labor Mobility Partnerships (LaMP).

Foreign Affairs – People Over Robots: The Global Economy Needs Immigration Before Automation

Posted on February 28, 2023 by - Uncategorized

The following excerpt was written by LaMP Research Director Lant Pritchett and originally published by Foreign Affairs on February 28, 2023 here. 

“Automation is often a solution in search of a problem. It is a choice people have made, not an inevitability and certainly not a necessity. For instance, the United States faces a scarcity of truck drivers. The American Trucking Association has estimated that in 2021 there were 80,000 fewer drivers than the total needed and that, given the age of current drivers, over a million new ones will have to be recruited in the coming decade. To deal with this deficit, many tech moguls, including Amazon founder Jeff Bezos, have invested in the research and development of self-driving vehicles, technology that would reduce the demand for drivers. For Bezos, such technology makes corporate financial sense; Amazon relies on low shipping costs to keep its prices down. But it does not make wider economic sense because millions of people would be happy to drive trucks in the United States—they just need to be allowed to work in the country.

There is no global scarcity of people who would like to be long-haul truck drivers in the United States, where the median wage for such work is $23 per hour. In the developing world, truck drivers make around $4 per hour. Yet firms cannot recruit workers from abroad even at the higher wage because of restrictions on immigration, so business leaders in the United States are impelled to choose machines over people and eradicate jobs through the use of technology. But if they could recruit globally, they would have less incentive to destroy those jobs and replace people with machines. The implacable fact of national borders steers businesses toward investing in technology that does not respond to global scarcities—and that no one really needs.

What is true for truck driving is also true for many other industries in the rich industrial world that require nonprofessional workers in specific work environments. A 2021 report by the financial services company Mercer estimated that, by 2025, the United States would face a shortage of some 660,000 home health aides, lab technicians, and nursing assistants.

Barriers to migration encourage a terrible misdirection of resources. In the world’s most productive economies, the capital and energies of business leaders (not to mention the time and talents of highly educated scientists and engineers) get sucked into developing technology that will minimize the use of one of the most abundant resources on the planet: labor. Raw labor power is the most important (and often the only) asset low-income people around the world have. The drive to make machines that perform roles that could easily be fulfilled by people not only wastes money but helps keep the poorest poor.”

Read the full Foreign Affairs article here.

Workers’ voices: What does “responsible recruitment” mean to agricultural workers?

Posted on February 8, 2023 by - Uncategorized

Responsible recruitment practices play a crucial role in workers’ experiences with migration programs. However, workers themselves are not always heard and consulted when stakeholder groups try to improve these practices. The conversation around responsible recruitment must include worker voices, especially in seasonal agricultural programs. Their concerns, expectations, and ideas about recruitment are key to finding solutions that improve and provide access to these programs to more workers from new corridors.

The conversation around responsible recruitment revolves especially around workers in the seasonal agricultural programs, whose concerns, expectations, and ideas about recruitment are key to finding solutions to improving and providing access to these schemes to more workers from new corridors.   

Therefore, the Equitable Food Initiative (EFI) created “The IRÉ Project: How Mexican workers define ideal recruitment and recruitment priorities,” with the goal of gathering insight into how farm workers recruited for jobs on fruit and vegetable farms in the U.S., Canada and Mexico would re-design the recruitment experience. The project sheds light on how these seasonal workers think about “responsible recruitment” and what matters to them most. Resourced and supported by the EFI and implemented by Cierto Global and &Wider, the project allows interested organizations and stakeholders to learn how workers define ideal recruitment and what they consider “ethical” and “fair.” The final report revealed three priority areas that workers see as a key part of a responsible recruitment experience: 

  1. Clarity  
  2. Community  
  3. Safety from health and financial risks – including extractive fees, hidden costs, and threats and exploitative promises by employers 

These findings are in line with what the LaMP team learned from prospective and returning workers under the U.S. agricultural seasonal worker program, or H-2A, who provided us with feedback during our recent trips to Mexico and Guatemala.  

Transparent and comprehensive information is the number one priority for workers when it comes to recruitment. Above other factors, like no fees, simplified paperwork or a choice in worksite destination, workers desire full and transparent access to information pertaining to the recruitment process, employer, worksite destination, and all associated costs. Migration is a household economic decision, so having clarity around the terms of migration allows households to make smart decisions and take calculated risks. Ensuring that workers have full knowledge to make informed decisions is a critical element for workers’ agency and dignity.  

Having some kind of physical presence in the community was also highlighted as an important part of the recruitment experience. Workers expressed that when recruiters have a physical presence in their community, for example in the form of organizing interviews or orientations there, the process feels safer or ‘more official.’ One CIERTO-recruited worker said, “we know that if anything goes wrong or we need information, we can go to the church [where CIERTO holds community gatherings and recruitment events] and they can help us get in contact with CIERTO, almost as if they had a physical presence in our community.”   

While the findings above were expected based on the IRÉ Project findings, the H-2A workers LaMP consulted also shared additional information.  

Another important finding for LaMP is that the use of the internet and technology to find or vet recruiters and job opportunities is not widespread among the H-2A workers. As LaMP continues to design solutions to improve responsible recruitment, we want to understand how tools that rely on technology will be received and utilized by workers. For the workers we talked to, not everyone had access to technology resources or the internet, and even for those who did, the internet was not a primary source of information on H-2A opportunities. In the case of Facebook, it is accessible and somewhat used, but also considered not trustworthy. This means that workers in this community might be less susceptible to internet extortion but also less likely to adopt a technology-based tool for finding responsible recruiters or legitimate H-2A jobs. Overall, we found that most recommendations and opinions on job opportunities that help a prospective worker make decisions come from personal networks. 

While a free of charge recruitment process was not mentioned as a priority for workers, many of the interviewees talked about the need for some form of loan in order to cover the costs associated with receiving the H-2A visa. While willing and able to obtain funding, workers explained that large loans can have long-term consequences, not just for them, but also for their employers. One visa applicant in Guatemala said, “collaboration and solidarity among workers are important for the success of the [H2A] program.” However, “the higher the debt a worker takes on to migrate, the more likely they are to abscond.” While abscondment is a concern for recruiters and employers alike, it also results in greater worker vulnerability. Reducing costs by eliminating unexpected costs or exploitative fees for workers can help reduce abscondment, which ultimately affects both workers and employers.  

Lastly, the small group of indigenous women that the LaMP team met with in Guatemala added a whole another level of complexity to the issue of responsible recruitment, bringing the perspective of migrant women working in agriculture. For them, discrimination or equal access to opportunities is the biggest problem. One aspiring female H-2A applicant said, “what we are looking for is a legal and equal opportunity for work.” Women are heavily underrepresented in the H-2A program, and for them access and fair labor conditions, adequate housing and protection against harassment are key priorities.    

Putting workers’ perspectives and lived experiences at the center is not only best practice, but also fundamental for building a “responsible recruitment” ecosystem. Giving workers a safe space to provide recommendations on how to improve the H-2A visa program =is an empowering experience that benefits all stakeholders involved. Overall, understanding workers’ key priorities has been crucial for promotion of a responsible recruitment industry within the H-2A program. 

NPR: Populations around the world are declining. Migration is the solution, says economist

Posted on January 27, 2023 by - Uncategorized

Please direct questions or interest through our contact form. The following content was originally published on NPR January 25, 2023 here. 

ARI SHAPIRO, HOST: There’s an imbalance in global birth rates. China’s population is shrinking for the first time in decades, raising fears that China’s economy could shrink with it. Europe’s population is quickly getting older, too. Meanwhile, parts of the developing world are facing a youth bubble. So could immigration help address both of these problems? Lant Pritchett is a development economist who studies labor markets and migration. Welcome to ALL THINGS CONSIDERED.

LANT PRITCHETT: Thanks for having me.

SHAPIRO: Before we get to the question of immigration, explain why it matters if a country has a slowing birth rate. How does the number of babies born change a country’s economic outlook?

PRITCHETT: Well, the problem isn’t so much that the overall population shrinks. It’s that during the period after the birth rate falls, it’s something we call inverting the demographic pyramid, which instead of there being a lot more young people than old people in it, the relative populations start to shrink and you go from having lots of people in the labor force to support the elderly, to headed towards a quality of people in the labor force and people in the aged population. And that just has never happened in the history of the world. And it’s not clear it’s a sustainable way to sustain the social contract that we have in which the young support the old.

SHAPIRO: Beyond China, how much of the world is facing this problem?

PRITCHETT: It pretty much is endemic across the rich, industrial world. I’ve done calculations from the standard U.N. projections, and, over the next 30 years, there’s going to be 100 million more old people but 143 million less people in the workforced age category. So this is across the rich, industrial world.

SHAPIRO: Meanwhile, parts of the developing world are looking at the opposite problem. The 10 youngest countries in the world are all in sub-Saharan Africa. Could those countries help provide a solution to the countries that are aging?

PRITCHETT: They definitely could and definitely would. Gallup surveyed people around the world of whether they would be willing to move to another country, and something on the order of a billion people in the world said they’d be happy to move and work in another country. So no question that there’s an ample supply of workers who would be willing to move and take up the jobs that the rich world needs and just don’t have youth to take.

SHAPIRO: And yet, immigration is not just an economic question, it’s a political one. And political sentiment seems to be going in the opposite direction. Anti-immigrant attitudes are growing across Europe and in many parts of the highly developed world.

PRITCHETT: That’s true. But I think, in part, that’s because we’ve traditionally forced two really high tension questions to be the same answer. One question is, who are the future citizens? Who are the future members of what we regard as us – our society, our nation? And the other question, though, is who are we going to allow to be legally present on our territory to do labor services? My feeling is if we allow those questions to be separated and we have a discussion about who are the immigrants that we want to form our future society as a separate per discussion about who are we going to allow to come to our country and work – I think once those questions are separated, we can manage the political and social consequences of migration while still meeting the very dire needs that these economies have to, you know, fill jobs that just won’t otherwise be able to be filled.

SHAPIRO: You’re talking about something like temporary work visas. I was recently in the strawberry fields of southern Spain, which tried that kind of a program. And Spanish officials told me a lot of people skipped out and stuck around when they were supposed to have gone back at the end of harvest season. Is that inevitable?

PRITCHETT: That is, by no means inevitable, but it is a pressure. There is no question that once people are in a country where wages are four or five times their home country, there will be a tendency to stay. But I think the prospects for building a good industry that recruits, prepares, places, protects and ensures compliance, I think we can build a good industry to do this. This is not impossible.

I feel we’re sort of in the position now that America was with Prohibition. We wanted to ban all alcoholic beverages, and it just wasn’t enforceable. And so the path to more control of alcohol was through less control of alcohol, through legalizing these flows. I feel the path to better migration is through more migration. We have to acknowledge that these economies really need these workers. And if we really need these workers, we should set up fair, transparent, legally enforced ways in which they can come and in which we can ensure reliable compliance with return, if that’s part of the legal agreement.

SHAPIRO: Does this serve the developing world, too? Or is it just a brain drain, where talent goes to wealthier countries with an aging population?

PRITCHETT: What I’m talking about is mainly labor mobility to meet the low-skill needs. If you look at the U.S. economy, over the next 10 years, the Labor Department says we’re going to have 5 million jobs that don’t require a college degree. And yet, over that same period, we’re going to have 3 million less workers 20 to 40. So what the rich world needs is not, in fact, high-skill, high-talent, brain drain kind of people, exclusively. They would love to get those people. But what I’m talking about is the people with core work skills. And I think that isn’t a brain drain. That is a wonderful thing for the developing world because people just aren’t going to be able to create the numbers of jobs they need to in the developing world. And hence, it’s super win-win.

SHAPIRO: Lant Pritchett is research director with the think tank Labor Mobility Partnerships. Thank you very much.

PRITCHETT: Thanks, Ari.

 

Copyright © 2023 NPR. All rights reserved. 

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LaMP Flights: Discovering how tech-solutions help indigenous communities’ migration in the coffee sector in Costa Rica

Posted on January 24, 2023 by - Uncategorized

FAVORITE QUOTES: 

 “Coffee business is a family business”- Farm manager in “Hacienda Río Negro” 

 MAIN TAKEAWAY: 

The “Sistema de Trazabilidad Laboral Migratoria” (SITLAM) is a tech-based solution for the agricultural sector in Costa Rica that has allowed regularization, tracing and inclusion of indigenous workers and their families in an innovative and streamlined way. SITLAM started to operate as a system with three components. (1) A web platform for the government to register information at the border and issue an ID card in real time for migrant workers. (2) The SITLAM ID card has a QR code to help them track and access an array of services such as medical, social security and banking (3) Additionally, SITLAM provides an app for employers to register worker’s entries and exits. Most employers and workers have seen systemic improvements and reduced frictions since its implementation in 2020, as a result they have been using it for three consecutive years. However, SITLAM’s success story does not rely entirely on technology development – it is part of a whole ecosystem that facilitates regular and orderly migration for coffee harvests that rely on indigenous workforce from Panama and Nicaragua to maintain their exports. This ecosystem includes a legal instrument, a specific migration category, housing, transportation, and childcare provided by the employer. 

 

LaMP TEAM REFLECTION: 

As the last scoping trip of 2022, LaMP team went to Costa Rica to collect information and learn more about SITLAM. Our goal was to understand how this tech-based solution works in practice and what are the conditions for replicability in other industries, countries, and migration corridors as an occupation-based and streamlined model. The coffee sector has been a champion in SITLAM’s implementation and  use of the system. The LaMP team visited two cities in Costa Rica. First, we went to San José to meet with public institutions including the Ministry of Labor and the Ministry of Agriculture; and then we had the opportunity to go to San Vito, in Coto Brus, a canton specialized in coffee production at the border with Panama where we were able to witness in real time the process and talked with local authorities, employers and workers. Learnings from this trip will help us think through replicability and best practice insights.  

Coordinated efforts and activities among different public organizations, the technical assistance from the International Organization for Migration (IOM), the private sector’s influence and the COVID-19 pandemic leverage were the key drivers to design and implement SITLAM. Every year, Costa Rica receives tens of thousands of foreign seasonal workers to support the coffee sector. Most of them come from Panama’s ethnic minority: the Ngobe Bugle. As a result of COVID-19 in 2020, they faced labor supply strain due to the border’s closure and temporary halt for sanitary reasons. SITLAM was the solution that emerged to solve this shortage and address political pressures from the coffee sector through the business association Instituto del Café Costa Rica (ICAFE). The system started as a multi-institutional coordinated effort between the IOM, the Ministry of Labor, the Ministry of Agriculture, and the Migration Office; however, as a migratory status it now officially sits under the Migration Office.  

There are context-specific features to highlight in this initiative, including positive attitudes around migrant workers, perfect circularity, family inclusion within the migration process and direct recruitment. A culture of migration is palpable in San Vito as the city was established by Italian migrants and now relies on indigenous migrants to work for annual coffee harvests. There is a long-standing flow of Ngobe Bugle workers to San Vito which are the preferred workforce for coffee producers. For example, some people have been working for 20 consecutive years in the same coffee farm. Furthermore, the local authorities have established a local labor migration policy that promotes a regularized setting for current and future flows. Another key element from this migration process is that it is perfectly circular: all workers come to work at the beginning of the coffee season and return home at the end of it. Family inclusion is also an important aspect of the coffee sector. Employers allow workers to bring their families, which results in the family earning more income, workers come for a longer time, and this increases the retention in a single workplace. Finally, we learned that the coffee sector recruitment process is based on employer-worker bonds, especially with community leaders that work alongside the rest of the community in the coffee field. There are minimum cases where intermediaries have been part of this process. 

There is a lot of expansion potential and interest for SITLAM, looking beyond the agriculture sector in Costa Rica, thinking about a trinational system or replicability to other migratory corridors. Within the agricultural sector, other product farmers including palm oil, pineapple and banana have started using SITLAM for migrant workers from Nicaragua. One key difference from the coffee sector, as this one has a common investment fund managed by ICAFE to ensure social security for the workers. Other sectors such as transportation, construction, private security, and domestic work have shown interest in using SITLAM.  The government, in coordination with IOM, is exploring the legal feasibility of piloting SITLAM in these sectors. Additionally, IOM is analyzing the feasibility of creating a trinational SITLAM for Costa Rica, Panama, and Nicaragua, as the migration flows are frequent between the three countries. Moreover, other countries in Central America have approached Costa Rica to learn from this initiative. 

Currently LaMP team is assessing different ideas for projects aiming to improve the current system in Costa Rica, ranging from new features in the system to incentives and mechanisms to promote a better use; or to replicate the system in other places and contexts around the region where circular migration schemes are in place. SITLAM has clearly shown that tech-solutions can drive positive impact by reducing frictions for different stakeholders, however a comprehensive evaluation for the three harvests in Costa Rica using SITLAM is needed to learn how this solution has changed the behavior of workers, employers and government and has helped in different productivity and social outcomes.   

Interested in this work? Feel free to contact us! Stay tuned for more details about this project as well as other LaMP’s work by signing up for our newsletter and following us on twitter!   

2022 at LaMP: A Year in Review

Posted on December 19, 2022 by - Uncategorized

For years now, we have described labor mobility as an idea ahead of its time. What 2022 showed us clearly is that the time has come.

Labor scarcity has entered the public consciousness in a way we have never seen before – as of summer 2022, the world’s largest 30 economies had a record number of job openings. While the temptation of policymakers is typically to open doors only to highly educated migrants, the fastest growing openings by far are for workers in trade and service sectors. We have all felt the pain of these shortages in the last year – think of all the long waits at the airport, the breakdown of supply chains driving inflation because there are not enough truck drivers and port workers.

This pain goes beyond airport lines and supply chains – according to a report recently launched by friends at the Boston Consulting Group (BCG), these labor shortages are costing us all $1.3 trillion per year or $3-5 billion every day. This is just the tip of the iceberg as demographic decline truly sets in; without creating opportunities for new workers to come, these daily losses will get much larger over the coming years of our lives.

For us at LaMP, in the words of da Vinci, we have spent 2022 “impressed with the urgency of doing.” We expanded our operations and our team to cover all continents, working with many of you to reach new geographies and explore new barriers to mobility. We launched several portfolios of work focusing on solutions to these barriers, with the support of new partners from the Howard Buffet Foundation, Schmidt Futures, and Australia’s Department of Foreign Affairs and Trade. You can learn more about this work on this new website we launched in December, which offers more information on our current programming. Following on commitments we made last year, we also worked to expand the perspectives and skill sets of our team and Board, recognizing the importance of understanding and reflecting the views of a wide range of stakeholders in our work.

Here are the top takeaways from a momentous year of growth:

  1. The tide is turning. 2022 made labor scarcity a ‘household name,’ and we are already seeing policy and dialogue shift accordingly. In November, Canada set its highest immigration target in its history (1.45 million immigrants by 2025), and announced changes allowing workers in trade and service sectors to more easily come. Germany is exploring changes to reduce barriers for workers in these sectors, having already expanded its migration system to include all mid-skilled occupations and a number of lower-skilled occupations, and the US plans to issue the highest number of H-2B visas in history while the Secretary of Labor warned that not letting in immigrants would lead to economic ‘catastrophe.’ We’re also seeing broader recognition from the public that we need migration into a wide range of sectors – the British public, which only so recently voted to pull out of the EU due to fears over higher immigration, now favors increased recruitment of migrants with the largest positive shifts in attitudes being on low-paid sectors struggling with shortages, such as catering and construction.
  1. LaMP picked up huge momentum, especially in forming the right relationships and opening opportunities. In last year’s reflections our CEO Rebekah Smith asked two questions: could we be a global organization while being embedded in local contexts, and could we become a trusted advisor to all of the different types of actors we need with their very different interests? The answer this year has been a resounding (and reassuring) yes. LaMP became a known name and trusted advisor in some of the highest levels of decision-making. We have formed strong relationships with key actors we couldn’t have dreamed of a year ago, from governments to industry to donors. The sector-based approach we committed to at the end of 2021 has worked  – our team has been deliberate in meeting employers where they are at, embedding ourselves in industry convenings for the care, cruise ship, and trucking sectors. We’ve found that the best way to get the trust and buy in of all stakeholders is simply to take their own interests seriously, as seriously as if they were your own, and to find a design that meets all of their goals (we call this the ‘applesauce principle’ among ourselves, but you’ll have to reach out to find out why!)
  1. We still struggle to turn this momentum and relationships into actual programs. If labor mobility’s time has come, what may be missing is the doing. The da Vinci quote continues: “Knowing is not enough; we must apply. Being willing is not enough; we must do.” This year we have seen dramatically increased recognition of the need for labor mobility, but solutions lag far behind. For our part, in 2022 LaMP has generated significant interest in new solutions and expanded pathways, but so far this has only resulted in one operational program aimed at improving worker experiences – far from what is needed. 2023 will be a key moment in seeing whether we can translate interest into actual programs – we have several pilots that would create new migration opportunities in the pipeline, and a goal of moving 50,000 workers by 2025.
  1. We need to act quickly. LaMP’s mission is to create better job opportunities for half a billion workers from low-income countries by 2050, which would fill only half of the need from demographic decline. That’s less than 30 years to triple the number of migrant workers in the world, which leads me to two conclusions for our work moving forward:
  • While we are currently taking an incrementalist approach, which is a necessary starting point, we need to be looking for big unlocks that lead to exponentially scaling migration. We are currently working on incubating new solutions – like innovative financing approaches – that would allow us to scale existing migration systems in a sustainable way. But if we are to meet this goal, we need solutions that transform the way migration works and is viewed.
  • It’s time to pair technical solutions with a movement of powerful voices calling for large-scale change. Technical solutions can only ever lead to incremental change; to achieve transformative change, we need to fundamentally shift the understanding of the role of migration in our society. We have exciting plans to begin building this movement over the coming year, including an inaugural convening of powerful advocates and thought leaders to amplify the voices of workers from the Global South and are creating partnerships working towards concrete commitments for mobility pathways and solutions within the aged care sector by the G20 governments to be announced at next year’s G20 summit.

As we at LaMP think back on our work in 2022, we are reminded of a quote from Angela Davis: “You have to act as if it were possible to radically transform the world. And you have to do it all the time.” This year, the LaMP team has gotten to work every day believing that it is possible to radically transform the world, and dedicated each day to striving for that transformation. This field requires hard and arduous work, but we believe that we are beginning to see the fruits of that work, and that the next few years will bring critical leaps forward in the role mobility plays in our societies.

We are grateful to all our partners, stakeholders and supporters for all the ways they strive with us, and look forward to working on further developing these as well as new partnerships in the coming year for a more just and prosperous world where more people have the opportunity to move!

 

Wanted: New Partner Countries for Germany’s Labor Migration Policy 

Posted on December 5, 2022 by - Uncategorized

The German economy is in dire need of immigrant labor. A study by the  German Federal Employment Agency (BA) estimates that Germany will need to attract 400,000 net immigrants to its labor market by 2050 to sustain its current growth levels. The problem is that Germany’s traditional source countries for immigrant labor in southern and eastern Europe face the same demographic shifts as Germany, meaning their populations have also been aging.

Most countries with booming demographics are developing countries, for which labor migration bears potential for development. Studies estimate that only 60% of people in developing countries are likely to find jobs above the poverty threshold. For these countries, emigration alleviates the pressure on their ailing job markets. This is accomplished with the new skills and knowledge brought by returned workers as well as remittances that often make up large shares of the developing countries’ national GDPs.

Germany has already laid most of the groundwork needed to attract missing workforce: a broadened legal framework, strong political commitment, technical expertise, and public awareness. But how can it move up the next gear? How can we scale up a decade of piloting? Where do responsibilities lie between government actors and the private sector? And where will the immigrants of tomorrow come from?

This blog seeks to address at least some of these questions. Parts of the answers lie with the need for Germany to strengthen cooperation with new and future source countries through labor migration partnerships.

Roadblocks ahead

In Germany, two main roadblocks stand in the way of prospective migrant workers.

First, learning German poses a significant challenge. German is not widely taught in schools due to its limited perceived global practicality. Language training is costly and takes on average 12-18 months of full-time training to reach the desired B2 level to be attractive to German employers. Most employers currently pay for the language cost at the match-making stage before the worker embarks on the language training journey, which creates a lot of “investment” risk. Finding sustainable solutions to bridge this payment/timing gap will increase attractiveness and make hiring of foreign workers easier.

Second, the uncertainty of visa procedures may discourage potential candidates. Visa policy is often a sensitive topic, but there are ways to increase the predictability and visibility of visa applications and processes for candidates and employers. For example, it can be accomplished through facilitated schemes for specific skills levels, occupations, or nationalities, such as the Australian Pacific Labor Migration (PALM) scheme and innovations in the US H2A scheme with Mexico and Guatemala. Another option is to change the visa design. Recent Spanish reforms have proposed a 4-year circular visa program to increase predictability and security for employers and migrant workers. The issue particularly with circular schemes, however, is the power they give to recruiting agencies in origin and employers in destination countries, creating a potential for exploitative behaviors. To address these power imbalances between stakeholders, ethical circular schemes should come with proper vetting of employers, responsible recruitment agencies, and the ability for migrants to change employers within their sector or occupation. The systems should also provide proper feedback channels for the workers to evaluate employers.

The next set of challenges await immigrants upon arrival. Integration is often complicated, especially for those who have yet to master the German language. Skills recognition is another issue given that requirements for the same professions vary by states. Sectors with difficult working conditions and unattractive remuneration, such as health and aged care, also struggle to retain migrant workers who turn to less burdensome professions. Additionally, employers are not always prepared to welcome international workers and manage multi-cultural and multi-language teams, especially in smaller cities and rural areas. Discrimination and racism are a reality that pushes some migrant workers to cut short their stay in Germany and move onward to another destination. While the issue of integration of migrant workforce is at the core of Germany’s minister for integration, it should also be addressed in unison with the private sector and employers across job sectors.

On top of that, many introduced pilot programs have been set up in a way that is difficult to scale and finance in a sustainable way. Over the past 10 years, Germany has piloted several projects through skills and labor mobility partnerships. These pilot projects have been key to push forward innovative models and identify challenges and bottlenecks. But pilots score poorly when it comes to the actual numbers of migrant workers they have channeled into Germany. As comprehensive as they are, these schemes tend to be very costly if not properly scaled. This raises the question of a fair sharing of costs between private and public actors. Employers, who already bear the risk of hiring candidates unfit for the job, are understandably wary of taking on additional financial expenses. At the same time, the government alone cannot subsidize labor migration but should act as an intermediary for private employers that are often not experienced with hiring foreign workers. Results-based financing (RBF) models, in which payments are connected to pre-agreed and verified measurable performance targets, may provide a solution to this issue, helping the government, employers and ultimately the workers to ease off the burden.

Cooperation outside; coordination within

It is clear that labor migration partnerships rely on strong cooperation with sending countries at the technical as well as political level. At technical level, the cooperation should achieve some degree of coherence on training requirements and skill recognition. At the political level, partnerships are sustained by their perceived added value – a determinant that may change over time and with successive governments.

As many of the traditional sending countries age, it is time to build new and strengthen existing partnerships with the emerging source countries. As an example, although most skilled workers come to Germany from India, Germany’s visibility and attractiveness as a destination country pales in India in comparison to other global competitors.

To gain visibility abroad, Germany needs to increase the coordination across responsible ministries and build a coherent messaging – from the Foreign Office to Development and International Cooperation, Home Office, Labor and Social Affairs, Health, and the Chancellery. Ultimately, effective labor migration will require strong cross-sectorial partnerships among a variety of stakeholders – from relevant ministries to states and communities, private employers, and host communities – asking for enhanced communication, coordination, and coherence.

Lots of new developments are currently taking place in Germany when it comes to improving the processes and attractiveness of Germany as a destination country. But Germany needs to do more to overcome the hurdles of language and attractiveness, focusing on its ‘unique selling points’, for instance by communicating about the non-monetary benefits it offers and that are too often not spelled out to migrant workers: health and retirement benefits, family reunification, speedy access to citizenship, and others. Within the EU, Germany is leading a solitary race for labor migration. This alone should give Germany an edge to attract more labor migrants.

This blog is based on outcomes of a discussion among representatives from German ministries, development organizations and the private sector hosted by the German Council on Foreign Relations (DGAP) and Labor Mobility Partnerships (LaMP) in October 2022.

LaMP Flights: Understanding needs and challenges of Mexico’s transportation industry

Posted on December 2, 2022 by - Uncategorized

FAVORITE QUOTES: 

“I want to become a driver because I want a better future for my family” 

“I want to become a driver because it has the privilege of combining responsibility with sunsets and unimaginable landscapes” 

– Students at training centers

MAIN TAKEAWAY: 

Labor mobility can help address the current labor shortage in the Mexico’s trucking industry, particularly for heavy freight transportation. Coordinated and scalable efforts to professionalize the country’s long-haul truck drivers may be one of the first steps towards such endeavor. The industry demonstrates several important ingredients necessary to build a bigger and stronger labor-force, such as organizational capacity, motivated and talented leaders and teams, well-developed processes and procedures, willingness to invest from the private sector, and competitive salaries. However, underlying conditions such as crime and insecurity, supply chain industry configuration, informal practices, insufficient control and monitoring and health concerns present important challenges as the industry works to attract new workers.   

 

LaMP TEAM REFLECTION: 

After trips to Guatemala and the Dominican Republic, the LaMP team traveled to another target destination of our Ibero-America scoping project – Mexico. This trip allowed us to assess Mexico’s potential and appetite for circular labor mobility within its heavy freight transportation industry. Our focus on Mexico stems from its position of representing both – a receiving country of workers from Guatemala, El Salvador and Honduras, also known as the Northern Triangle, as well as a sending country of trained workers to the United States and Canada, which face similar labor shortages in the sector.  

The LaMP team met with a broad variety of stakeholders including government actors at different administrative levels, private sector, and labor organizations, collecting various perspectives and getting familiar with the existing initiatives. Although many of them shared experience with Mexican truck drivers eventually leaving to work for US employers and expressed concerns about this issue, just a few stakeholders have considered binational coordinated circular labor mobility schemes as a solution helping to meet labor demand of employers in both countries. Still, most stakeholders agree that more cross-border collaboration, such as joint efforts with the United States to align incentives for the two nations’ employers, is necessary to address the workforce gap. And yet, while most of the stakeholders we encountered during this trip expressed positive attitudes towards foreign workers, they have been more focused on attracting and training Mexican workers, including young people and women, as a first straightforward response to the industry’s needs.   

The workforce gap for the long-haul freight transportation sector is a complex challenge, but the industry is highly motivated to address the issue. The LaMP team will build on this energy to explore possible labor mobility solutions tailored to the sector’s needs. We are currently assessing the feasibility of different labor mobility initiatives, including financing mechanisms, to unlock current barriers to job training, and cross-border coalition building. Specifically, we are analyzing Central America’s long-haul transportation workforce needs and starting to explore bilateral or multilateral collaboration opportunities in the US side.  

Interested in this work? Feel free to contact us!

Stay tuned for more details about this project as well as other LaMP’s work by signing up for our newsletter and following us on twitter!  

 

Applying innovative finance solutions to sticky challenges 

Posted on December 1, 2022 by - Uncategorized

Significant attention is paid to how policies drive outcomes in migration systems; however, there is little attention paid to how the financing models behind them influence behaviors of key actors.  

Policies and regulations are important tools, but in the context of migration which by definition crosses legal boundaries, there are limitations to the effectiveness of enforcement. Where regulation is limited to what can be enforced, financing systems can be designed in creative and complex ways which reinforce policy goals by connecting payments to the desired outcomes.  

In results-based financing (RBF), payments are connected to pre-agreed and verified measurable performance targets. Ideally, these targets map directly to the desired outcomes, such as well-prepared workers moving into good jobs.  

RBF is a critical part of LaMP’s toolkit to improve labor mobility systems. As a tool, RBF has potential to quickly grow while helping workers, employers, governments and other labor mobility actors. RBF can: 

  • Reduce the burden on government systems as it increases accountability and embeds transparency without the need for increased regulation or enforcement 
  • Increase focus on results instead of activities and learn what actually works, encourage innovation at an individualized, localized approach to the needs of workers and employers. 
  • Optimize the use of commercial as well as public resources since payments are only made for successful programs.  

LaMP has a large portfolio applying RBF to different challenges and contexts within labor mobility. 

 

For more information, contact:

Sophia Wolpers

swolpers@lampforum.org

 

 

Kim Geronimo

kgeronimo@lampforum.org

Innovative language training solutions helping migrant workers and employers alike 

Posted on December 1, 2022 by - Uncategorized

Language requirements are part of most mid-skill labor visas and play an integral role in how well a migrant worker can exercise their job, advance and integrate in the destination country. Therefore, it is not surprising that governments around the world are hesitant to lower this entry requirement. At the same time learning a language while working, as often required, is time and cost-intensive for potential migrant workers and often not affordable without financial support.  

At the same time, employers willing to hire migrant workers due to ongoing labor scarcity do not want to pay months and years in advance for a worker who may or may not arrive.  

This timing and risk challenge can be solved through a mixture of well-integrated technology and results-based financing innovations if partners across education, tech, financing and recruitment come together.  

Throughout 2023, LaMP will be coordinating and working with a range of partners to cultivate and design a new multi-step language training model. This model will couple low-cost application-driven language learning with innovative funding solutions further increasing its quality. The goal is to equip the most dedicated workers with the skills required to enter and succeed in labor markets abroad, while reducing costs and risks.  

Lowering the structural hurdles to language skill acquisition for workers in low-income countries will expand the opportunities for workers to find the best possible jobs abroad to maximize their income and support their families, communities and economies.  

 

For more information, contact:

Sophia Wolpers

swolpers@lampforum.org