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Mind the Shift Podcast: The Poverty Fix Nobody Talks About

The international cooperation community has stressed once more the importance of designing policies and implementing programs which can elevate the development potential of international mobility.

As the Global Forum on Migration and Development (GFMD) talks wrap up in Geneva, tune into our Research Director Lant Pritchett and Anders Bolling conversation where you can learn how LaMP aims to achieve this goal by building politically viable and financially sustainable solutions.

 

Migration Is Development – LaMP Works To Solve Two Global Challenges

There is a persistent rhetoric around migration, which ignores the fact that the demand for labor is its main driver. The current mainstream narrative doesn’t fully recognize the development potential of labor mobility for migrants and sending and destination countries alike.

The opportunity for an ambitious global agenda here is clear, and LaMP wants to make it happen. We believe we can solve two major challenges in one fell swoop, all while reducing irregular migration, which fuels the migrant smuggling industry.

  • By 2050, half a billion of the projected working-age population of the world’s low-income countries are expected to have difficulty finding jobs at home. In the absence of sufficiently large mobility pathways, their demand for alternative and irregular journeys increases.
  • The latter number is roughly equivalent to the needs in high-income countries due to the irreversible ageing of their workforce. Many services cannot be done remotely and need skilled workers, from harvesting to elderly care.

What is more, labor mobility is by far the most impactful form of aid – more so than the world’s official and philanthropic development aid. Embracing it in a thoughtful, well-regulated way, building structures to allow demand to meet supply in an orderly manner and with clear conditions, is a very effective solution.

You can read more in this article by Anders Bolling for the Swedish magazine Fokus (behind paywall).

Lant Pritchett on Labor Mobility for Spanish newspaper El País

LaMP Research Director, Lant Pritchett, traveled to Madrid in October to collaborate with the Spanish government on a potential training and labor mobility pilot project involving joint efforts, with Colombia. During this visit Lant had an interview with the newspaper “El País” after taking part in a session of the Rome Dialogues on Employment and Migration organized by the World Bank. 

Lant highlighted the importance of demographic changes as an opportunity for countries to embrace safe and regular labor mobility. He emphasized that the way to change migration narratives in societies and encourage governments to develop more policies in favor labor mobility is the recognition that having the right to work in a territory does not automatically grant citizenship. He stressed the need, for acknowledging labor mobility as a rotational and win-win process. 

Moreover, Lantt emphasized the need to distinguish between migration pathways based on whether they lead to citizenship, they are intended for labor purposes, or they are designed to accommodate individuals out of necessity. 

Read more details of this interview here (in Spanish). 

The Future Perfect 50 by Vox: Lant Pritchett is advocating for immigration reform and thinking big about global development economics

The American news and opinion website Vox has selected LaMP’s Co-Founder and Research Director Lant Pritchett as a member of The 2023 Future Perfect 50 list.

Future Perfect focuses on ideas that can change the world, make it a better place, and seem utopian but are actually doable. Lant was selected for his migration-first approach to development and decision to found Labor Mobility Partnerships (LaMP) with Rebekah Smith.

You can read Lant and the other members’ Future Perfect profiles here.

Rome Dialogue III:The promise of Skills Partnerships for Effective Labor Mobility

 

In this high-level dialogue, the Spanish Minister of Migration, Inclusion, and Social Security Jose Luis Escriva and renowned economist and LaMP’s Research Director Lant Pritchett discussed the role of labor mobility in an era defined by twin demographic crises: rapid aging in high-income countries, and growing youth populations in low-income countries. Lant Pritchett overviewed the enormous economic potential of filling critical labor shortages in high-income countries with workers from low-income countries. Minister Escriva discussed how his government has found politically viable solutions to unlock labor mobility, and where they see potential to go further.

Launched by the Italian Center for International Development and the World Bank’s Rome Jobs and Labor Mobility Center, the Rome Dialogues on Jobs and Migration are a platform for open exchange on practical, evidence-based solutions which improve the job outcomes of cross-border labor mobility. This Rome Dialog was co-sponsored by the Spanish Ministry of Migration, Inclusion, and Social Security.

 

EVENT: How Quality Labor Mobility Helps to Address Worker Shortages in Long-Term Care Sector

 

Severe worker shortages pose an existential threat to the long-term care (LTC) sector in OECD countries, as they have a shrinking workforce at the exact same time that their customer base is rapidly growing. By 2040, employers will need an additional 13.5 million LTC workers to sustain the current care-worker-to-elderly-people ratio. The ongoing demographic shifts have played a major role in this development. While the number of people aged 80 or older in OECD countries is expected to hit 1.2 billion by 2050, their working-age populations are shrinking dramatically. For LTC providers, this demographic trend poses a double challenge: as the populations age, there will not only be more seniors in need of adequate care but also fewer working-age individuals to fill the jobs. The results of the ongoing challenge are already apparent – while some providers have been forced to close their doors, others have to limit their admissions.

Foreign workers will be essential to the survival of the sector. Quality labor mobility can partially help OECD countries to address labor shortages in the LTC sector. At the same time, labor mobility has proven to bring a wide range of benefits to the foreign workers, their families as well as the sending countries’ economies.  And yet, less than a handful of countries have appropriate channels to allow adult care workers to move and work in their countries.

This event explored: how labor mobility can help to alleviate worker shortages and strengthen the LTC industry; the sector’s view on how to best address perpetual labor shortages; and finally, how partnerships between the aged care sector, sending countries, and labor mobility service providers can better work together to advocate, implement, and evaluate labor mobility programs now and in the future.

 

Watch the Recording Here

Language without Borders: Designing a financial solution to scale language training for migrant workers

LaMP looks to create new safe and legal mobility pathways to OECD countries, but also to improve the quality and utilization (quantity) of existing pathways. Germany is one of the first OECD countries to create a scaled visa route for mid-skilled workers. To capitalize on this opening, the Indian government in 2022 collaborated with Germany to produce the German-Indian Migration Mobility Agreement. Recruitment agencies in India have reported a significant increase in worker demand for job opportunities in Germany (40-70% Indians desire to work abroad, with Germany as a top-5 destination for migration).  

However, there are challenges that if overcome, can provide a meaningful unlock to increasing the number of workers moving between India and Germany.  Recruiters cite the language certification required to migrate as a worker’s biggest hurdle to obtaining a visa due to cost ($~2k) and time required to achieve the certification (12-18 months).  This is a significant commitment of time and money for workers, with an uncertain reward. The amount needed also excludes many low- to mid-income workers, and puts others in a position of risk, relying on lenders who can charge interest rates ranging from 20-50% (formal/informal). On the flip side, employers hesitate to pay the up-front costs for a worker’s language training, as they are unsure how to assess their RoI and have valid concerns relating to attrition and quality of worker’s language skills.  

Lack of equitable access to capital for language prevents workers who need it the most from safely accessing opportunities to work abroad, missing out on associated wage gains estimated to be up to ~$100k/person (est. average over 5 years of working abroad).  

The broader country context enhances the depth of the impact that could be had if the challenge of language financing is addressed. Youth unemployment in India is over 20%, and 140m of the population lives in poverty (annual PPP-adjusted income of $7.3k is less than half of the global average of $18.7k).  

The current lack of shared-value problem solving among recruiters, language schools, employers, financial institutions, and funders to address this issue will create a glass ceiling above many prospective migrants, and thus block the pathway to labor mobility at scale. 

 

Project Description 

LaMP aims to develop a proven solution to scale that unlocks worker migration from India to Germany by making German language training accessible for prospective Indian migrants regardless of their economic backgrounds. Our solution aims to increase migrant worker wages by at least 10 times what equivalent jobs would pay in India. Beyond these gains, our goal is to create a program that can be replicated across other global corridors. 

We expect to roll out the project in 3 phases over 5 years. The first phase is fully funded, while the second and third phases will require additional sources of capital.  

 

Phase I: Product Development and Advocacy (July 2023-24) 
  • Financial solution (Ia): Develop a financial solution to unlock access to German language training for workers 
  • Advocacy (Ib): Develop and implement an advocacy strategy that seeks to promote a financial solution that shares value and risk across all key stakeholders e.g. workers, employers, etc.  

 

Phase II: Launch of financial solution pilot and Advocacy Campaign (July 2024-December 2025) 
  • Pilot the solution designed in Phase 1 with the support of additional funding partners,  
  • Given the timeframe for language learning and design, we expect 1k workers to be trained by the end of 2025 (target contingent on level of financial commitment secured from partners) 
  • Lead targeted advocacy campaigns aimed at the governments of Germany and India in showcasing the impact of language financing on worker outcomes in securing jobs, and advocating for expansion of model across other mid-scale sectors 
  • Work with employers and recruiters to develop proof points of employer-paid models and/or models where the employer supports in contributing fully or partially to the worker loan 

 

Phase III: Scaled deployment and monitoring 
  • In phase III we will scale the model aiming to reach a total of 5k workers 
  • Monitor worker’s success and retention in their new jobs abroad; and examine the impact of remittances 
  • Publish our findings 

 


For more information, contact:

Prerna Choudhury

pchoudhury@lampforum.org

The Hill – The US is facing a labor shortage — immigration is the solution

The following excerpt was written by LaMP Manager Zuzana Cepla and Schmidt Futures researcher Johannes Lang and originally published by The Hill on August 18, 2023 here.

For over 35 years, the American political system has been unable to make any significant change to U.S. immigration policy. In June 2023, a bipartisan coalition of representatives introduced the Dignity Act, a comprehensive immigration reform bill. This followed a poll showing that four out of five Americans support bipartisan cooperation on immigration that would address labor shortages and inflation.

While U.S. politics may continue to prevent an immigration grand bargain, there are many commonsense reforms the government could take to fill gaps in our current workforce. American policymakers need to wake up to a new reality: The country is running out of workers, and immigration must be part of the solution.

Facing food price inflation as high as 12 percent last year, Americans have begun to acutely feel the impact of labor shortages in the agricultural sector on their wallets. With an aging population and a labor force participation that has declined since the 1990s, it is clear that these shortages will only get worse over time — not only in agriculture, but also in many other sectors of the economy. Labor migration will become essential to sustaining long-term economic growth.

In 2022, the U.S. had almost twice as many job openings as unemployed workers. These trends are unlikely to change any time soon. Between 2011 and 2021, the total number of job openings increased, at an average of 12 percent per year, while the total working-age population rose only by around 3 percent per year. The COVID pandemic seems to have only worsened these trends, pushing many older Americans out of the labor force.

But there is a simple solution.

If there is an insufficient number of native-born workers to fill existing jobs, immigration from abroad is the best way to ensure the U.S. economy continues to grow. Employers make the demand for legal avenues for labor mobility clear: The number of workers on the H-2A temporary agricultural worker program has tripled between 2013 and 2021. Demand for H-2B visas, the program’s equivalent for non-agricultural sectors, is soaring as well.

These existing visa programs are targeted only at employers with seasonal needs. But many of the most critical long-term labor shortages will be in non-seasonal occupations. Immigrants already make up 38 percent of home health aides around the country. By 2060, a quarter of the U.S. population will be over 65, requiring an additional 75 percent of home health care workers. As the baby boomer generation reaches retirement age and life expectancy will increase, the U.S. will need to make it easier for foreign eldercare workers to come into the country.

Construction poses a similar bottleneck. Estimates show the industry will need more than a half a million additional workers in 2023 after setting record-high shortages with an average of over 390,000 job openings per month in 2022. And following enactment of the CHIPS Act, the semiconductor industry has been stricken by shortages affecting a wide range of occupations.

Opening new and improving existing labor mobility channels could also significantly reduce the burden of irregular migration. If legal avenues are blocked or poorly designed, more U.S. employers may be likely to consider hiring undocumented workers.

Consider the evidence: As the allocation of H-2A visas for workers from Mexico increased over the past decade, irregular border crossings fell in tandem.

Congress and the Department of Labor should specify more comprehensively a list of occupations with critical worker shortages and ensure that labor mobility pathways allow levels of migration sufficient to address the employers’ needs. Canada, for example, last year introduced changes to its shortage list that allow more workers in occupations such as long-term care aides, hospital attendants, and teachers.

The U.S. should follow suit. Updating Schedule A could be a key change that would make hiring from abroad easier for employers. This list of occupations facing dire shortages exempts employers from certain costly and time-consuming steps of the process. However, this list has remained the same since 1991 despite the ongoing demographic and labor market changes.

There are other actions the executive can take while Congress remains inactive. Adjusting the definition of “seasonality” could make a big difference by opening the current worker programs to employers in, for example, dairy and mushroom picking. These sectors are not eligible for the H-2A and H-2B programs as their work is year-round rather than seasonal. Similarly, allowing workers to change employers could help address some workers’ concerns. Raising the H-2B cap would help a number of employers, many of whom have been increasingly vocal about the need to modernize the current immigration system.

If our politicians fail to act on immigration, we will all continue to face the consequences of a shrinking labor force. Other countries are moving ahead: Canada has already begun a special program, recruiting high-skilled workers with H-1B visas in the U.S. Now more than ever, America’s economic success relies on welcoming new immigrants, creating growth and prosperity through hard work and perseverance.

 

Photo: A hiring sign is seen in Downers Grove, Ill., Wednesday, April 12, 2023. On Thursday, the Labor Department reports on the number of people who applied for unemployment benefits last week. (AP Photo/Nam Y. Huh)