Category: Uncategorized

LaMP Flights: Improving Central Americans’ Access to Job Opportunities within the Cruise Industry 

Posted on October 27, 2022 by - Uncategorized

FAVORITE MESSAGE:

Guatemalan workers have a strong value proposition. Cruise guests want to see more workers that represent the countries they are visiting on their vacation to have a more genuine experience.

MAIN TAKEAWAY:

Creating a pipeline of qualified and trained job seekers from Guatemala can help respond to the labor shortages of the cruise industry and create more job opportunities for workers. The cruise industry operates on a global level and can offer competitive wages, professional growth, and an opportunity for workers to see the world. However, for Guatemala to unlock this opportunity, workers need better access to English language and hospitality skills trainings, including access to funding as well as enough time to invest in these trainings, and a formalized recruitment industry in this sector that can respond quickly to the growing needs of the cruises.

LaMP TEAM REFLECTION:

The LaMP team kicked-off a series of scoping trips to dive deeper into opportunities for intra-regional labor mobility in Ibero-America. First, the team traveled to Guatemala to get a better understanding of the worker supply side. We met with stakeholders in Guatemala to better understand the potential impact of increasing job opportunities in the cruise industry for Guatemalan workers. Specifically, we discussed the matter with the government, non-profit organizations, training institutions, and recruiters, who could possibly support building of responsible recruitment industry within the sector, meeting the needs of the cruises while expanding the pool of circular employment opportunities for Guatemalans. During these meetings LaMP discussed concrete concerns and strategies to better prepare jobseekers for the industry, improve institutional collaboration, and reduce the risk of exploitation for workers who wish to work at sea.

The following week, we participated in the Florida Caribbean Cruise Association (FCCA) Annual Conference in the Dominican Republic to get more insights into the employers’ perspective and needs. At the conference, we discussed employment needs in the industry, especially following the halt during the COVID-19 pandemic. During the opening ceremony speakers emphasized that hiring more workers from the Latin American region  is one of the industry’s key priorities. The LaMP team engaged with cruise executives and delegates from the region to better understand the cruise lines recruitment challenges and how to harness opportunities specifically in Central America. To successfully increase hiring in Central America for cruises, countries need to create a qualified pool of candidates that is trained, ready to live at sea and speaks English. It is critical to establish a reliable and responsible recruitment market that can respond to the industry’s needs, match workers to jobs and prevent exploitation. Governments need to coordinate closely with cruises to ensure workers are trained according to their needs. And cruises need to coordinate closely with governments to ensure that a responsive recruitment market is set in place.

The LaMP team now takes this knowledge to start designing a pilot, helping incentivize jobseekers to invest in trainings which can ultimately result in a job offer in the cruise industry, while also channeling the cruise lines’ interest to hire from Guatemala and Central America more broadly. The team is now working with cruises, recruiters, training institutions and other stakeholders that expressed interest in continued collaboration.

To stay tuned for more details, don’t forget to sign up for our newsletter here and follow us on twitter!

“Entitled” Podcast S2E26: Global Inequality: How Should Countries Share Their Wealth?

Posted on October 13, 2022 by - Uncategorized

PRESENTERS

Branko Milanović, the world’s leading economists focused on inequality

James Robinson, economics and political science professor at University of Chicago

Rebekah Smith, Executive Director of Labor Mobility Partnerships

ABOUT

While borders have the ability to divide countries both politically and socially, wealth drives an even bigger wedge between us. How do we make sense of the fact that the wealthiest country in the world, the United States, borders one of the poorest countries: Mexico? Despite efforts to mitigate this, global wealth inequality still appears to be growing. According to the World Inequality Report, the poorest half of the global population owns just 2% of the total global wealth.

In this episode of the Entitled podcast explored some of the ways we could fix global wealth inequality.

Economics of International Wage Differentials and Migration

Posted on October 10, 2022 by - Uncategorized

Original publication: Oxford Research Encyclopedia of Economics and Finance

The key question for the economics of international migration is whether observed real wage differentials across countries for workers with identical intrinsic productivity represent an economic inefficiency sustained by legal barriers to labor mobility between geographies. A simple comparison of the real wages of workers with the same level of formal schooling or performing similar occupations across countries shows massive gaps between rich and poorer countries. These gaps persist after adjusting for observed and unobserved human capital characteristics, suggesting a “place premium”—or space- specific wage differentials that are not due to intrinsic worker productivity but rather are due to a misallocation of labor. If wage gaps are not due to intrinsic worker productivity, then the incentive for workers to move to richer countries is high. The idea of a place premium is corroborated by macroeconomic evidence. National accounts data show large cross-country output per worker differences, driven by the divergence of total factor productivity. The lack of convergence in total factor productivity and corresponding spatial productivity differentials create differences in the marginal product of factors, and hence persistent gaps in the wages of equal productivity workers. These differentials can equalize with factor flows; however their persistence and large magnitude in the case of labor, suggest legal barriers to migration restricting labor flows are in fact constraining significant return on human capital, and leaving billions in unrealized gains to the world’s workers and global economy. A relaxation of these barriers would generate worker welfare gains that dwarf gold-standard poverty reduction programs.

LaMP Flights: Attending Berlin and Vienna Conferences to Stress Importance of Quality Labor Mobility in Elderly Care

Posted on October 4, 2022 by - Uncategorized

FAVORITE QUOTE: 

Our seniors deserve the care they need and the many workers around the world deserve the chance to get a good job within aged care through safe, reliable and sustainable labor mobility.

– Rebekah Smith, CEO, Labor Mobility Partnerships (LaMP)

MAIN TAKEAWAY: 

The LaMP team organized a workshop on why and crucially how to expand legal pathways in the elderly care sector as part of the Metropolis conference in Berlin, Germany. The session received a great response and spurred interest of many different audience members as we brought a unique combination of perspectives.

We learned about the needs of employers from the European Aging Network, how to design pilot pathways for governments from Australia’s Department of Foreign Affairs and Trade and how to move workers in practice with responsible recruiters from Staffhouse International Resources from the Philippines. Finally, our very own Sophia Wolpers outlined approaches and tools with potential to address worker shortages in the aged care sector.

We were also honored to have Senator Ratna Omidvar of Canada highlight LaMP in her closing plenary session as an example of the way forward in labor mobility.

The LaMP team also attended CARE 4.0 conference in Vienna, Austria, connecting with and learning from service providers from all around Europe about the challenges within the elderly care sector and emphasizing the importance of quality labor mobility in addressing of these issues.

LaMP TEAM REFLECTION: 

Through these unique opportunities, the LaMP team got a chance to engage with many actors within the elderly care, providing technical and strategic guidance on creating mobility pathways for the sector. As a result, we had connected with speakers and audience members alike on how to move our ideas forward in practice.

However, engagement with specifically the individual employers stressed the nuances and uniqueness of this sector, which need to be reflected in any programming focused on elderly care. It is critical that any mobility pathway created to bring foreign workers to help take care of one of the most vulnerable populations – the elderly – includes rigorous skills and language training allowing them to provide high-level services that go beyond the “basic” needs of the residents and patients. At the same time, this training must be done in a way that allows the workers to start at their jobs within a reasonable timeline, providing them with an opportunity to improve their lives while also helping employers to address the growing labor scarcity within the sector.

LaMP has accepted the challenge of solving this delicate and very complex set of issues. We are now turning our attention to plans for the next year, which include new areas of work in the sector to address the individual hurdles and an increased focus on how to build a movement around labor mobility in the elderly care sector as a pathway to prosperity and equality.

Stay tuned for more details!

Peering Into The Earliest Stages Of Recruitment For The U.S. Seasonal Ag Worker Program

Posted on October 4, 2022 by - Uncategorized

The earliest stages of recruitment lay the foundation for seasonal agricultural workers’ experience in the U.S., yet they are also the most opaque, informal, and least regulated. Simple mechanisms that leverage worker voices to infuse transparency in early-stage recruitment practices may be the most promising way to improve oversight. By increasing accountability in recruitment and empowering workers as agents for change, these mechanisms are an important step for improving worker protection from day one. 

The temporary agricultural worker visa program, or H-2A, creates hundreds of thousands of job opportunities for foreign farmworkers and is a critical solution to growing labor shortages in U.S. agriculture. However, it is not uncommon for workers to experience misleading, extortionary, or fraudulent recruitment practices. Too often workers end up paying illegal recruitment fees, or taking jobs without receiving important information, like wage and contract terms. Enforcement efforts have been insufficient to combat these issues, in large part because the recruitment process is fragmented with workers passing through different stages with multiple layers.

At every step of the recruitment process, workers interact with different players. In the most fragmented of cases a worker may have talked to a few community contacts with job information, a recruiter, a visa facilitator, and a consulate officer – all before heading to their worksite. Each holding a small piece of access to the job opportunity.

The earliest stage of recruitment is the most informal and least regulated. “Early-stage recruitment” refers to practices and experiences occurring in the worker’s country of origin before they reach the visa application stage. It includes information-sharing about job opportunities, working conditions, the application process, and the selection of candidates to be considered for jobs. Who workers engage with during the earliest stage of recruitment is completely dependent on who in their community is a gatekeeper for access to jobs. For some it may be finding a Facebook ad. A “guy” coming into their community looking for workers. A family member that just came back from a similar work experience. Some employers may ask a worker they trust to find more workers, thus giving that person full power and responsibility over recruitment. Others might be approached by a formal recruitment agency.

Why does early-stage recruitment matter? Malpractice in the earliest stages of recruitment creates an unfair power imbalance for the workers, making them more vulnerable to abuses at the workplace and harder for them to seek a fair grievance process down the line. The early-stage recruitment process can be totally informal and often begins by word of mouth. The individual recruiting may not be even affiliated in any official way to the employer, making the employer blind to practices occurring before workers reach their farm. These blind spots can expose employers and others in their supply chain to lack of regulatory compliance and legal repercussions. In the worst of cases, traffickers and criminals target prospective workers to exploit them, promising job opportunities in exchange for illegal fees. A study done by the Polaris Project reported that the median amount of recruitment fees reported to their trafficking hotline roughly amounted to a whopping $4,000.

In practice, there is very little oversight of the earliest stage of an H-2A worker’s journey. Many existing efforts focus on ensuring responsible practices on the job or by the employer of record. This is critical and targets some of the most egregious issues seasonal guestworkers encounter. But few existing solutions directly address agents engaged in early-stage recruitment. Traditional methods of top-down enforcement are complicated by the fragmentation and informality that characterizes the recruitment process. A different way to create transparency and oversight is needed.

A bottom-up mechanism for continuous improvement of early-stage recruitment practices could bring greater transparency in recruitment. At LaMP, we are collaborating with CIERTO Global and the Equitable Food Initiative in the design of a low-cost, accessible mechanism to monitor and build capacity for better recruitment practices. The mechanism would utilize worker feedback to shed light on recruiters’ early-stage processes. This information would be complemented with support to recruiters to make strides towards a safer, fairer, and more predictable process for workers.

The mechanism would create greater accountability for recruiters and visa facilitators, transparency for employers and retailers, and empower workers to be part of systems improvement. Direct worker surveys on recruitment practices, anonymously aggregated and analyzed by a third-party organization, represent an independent source of information that gives employers and retailers greater visibility into worker experiences. In turn, these powerful stakeholders can hold recruiters responsible for making improvements.

The mechanism would also provide continuous indicators of quality, which could be linked to tangible benefits for recruiters, such as privileged access to potential clients, business mentorship, and financing solutions. This is critical, because if responsible early-stage practices are to be sustainable in a competitive market, they must be paired with benefits that create a market advantage for responsible recruiters or their clients.

If early-stage recruitment practices are overlooked, we will continue to leave blind spots in our ability to protect seasonal workers. We at LaMP are looking for partners to help us design business benefits for responsible recruiters committed to improving their systems. Please reach out if you want to collaborate or have ideas!

 

The research included in this blog was made possible by the support of the Walmart Foundation. The findings, conclusions, and recommendations presented in this blog are those of Labor Mobility Partnerships (LaMP) alone, and do not necessarily reflect the opinions of the Walmart Foundation.

Spain’s Immigration Reform Could Address Issues Within Seasonal Worker Program

Posted on August 1, 2022 by - Uncategorized

As increasing labor shortages continue to spread across Europe, employers intensify their calls for policies allowing them to fill the vacancies – and with summer in full swing, especially in sectors with seasonal need. This trend is apparent in a number of major European economies, with German, Italian and UK farmers stressing the need for more workers and the Portuguese worker shortage in the tourism sector threatening the country’s economic recovery.

In the midst of these labor shortages, Spain has approved a reform to streamline and improve its seasonal worker scheme  – a move that may offer an example to other European governments facing similar issues.

Spain’s 4-year Multi-Entry Visas are Key to the Reforms

At the end of July, Spain approved the overarching package of reforms in an effort to reduce bureaucratic red tape, increase flexibility, predictability and transparency in visa conditions, improve regularization procedures for migrant workers, and incorporate greater responsiveness to labor market trends.

The reforms include promising changes to Spain’s GECCO[1] program, the country’s main seasonal worker scheme. Instead of short-term work authorization periods that are valid only for the duration of seasonal contracts, the reform introduces a four-year multiple-entry work authorization that allows workers to stay and work in Spain for up to nine months each year. If workers comply with the rules, they can renew their work authorization for another four years or switch to a two-year residency and work permit.

In most countries, seasonal worker visas are structured as short-term work authorizations of up to 9 months. Workers have to then apply for a new visa for each year, which can create great uncertainty and elevated costs. Frequent renewals are also cumbersome for employers and complicate efforts to rehire the same workers they previously trained.

The longer authorization horizon included in Spain’s reform could have many positive impacts. Workers should benefit from reduced bureaucracy and costs, a more stable and predictable legal status, and a path to a more open-ended visa option. Employers should benefit from productivity gains as workers build skills and experience across multiple seasons. And the government should have fewer visa renewals to process each year, implying important cost savings to the public budget.

On top of that, the promise of future visas tied to returning home has shown to reduce overstay in other contexts.[2] Such a system creates incentives to “play by the rules” by providing a predictable path to additional or more flexible work permits to workers abiding by the circularity rules.

Further Changes To Consider

While the reforms represent a leap forward, the government should implement further improvements to the GECCO program that will align employer incentives with good worker outcomes and strengthen worker agency. These improvements would help ensure that the positive intent and potential of the reform are met in practice. Specifically, without building additional flexibilities into the scheme, the multi-annual visas may inadvertently worsen power dynamics between employers and migrant workers.

The following are policies and practices that the government should consider during implementation of the reform to create a win-win-win situation for employers, the involved government, as well as all workers.

  • Occupation- or sector-specific visas. Untying workers visas from specific employers, allowing them to change jobs as long as they stay in the same sector or occupation, could reduce workers’ vulnerabilities, strengthen their wages, and improve working conditions. Evidence shows lower levels of reported abuse and higher wages when migrant workers can change employers.[3] In other words, allowing migrant workers to switch employers motivates businesses to improve their treatment of workers to be able to keep the workers they trained, and in whom they invested. This then leads to improved working conditions and wages for all workers.[4]
  • Educating workers on labor rights. To make positive use of these reforms, government agencies should institutionalize partnerships with non-profit organizations on the ground who can provide migrant workers with a thorough practical understanding of the GECCO program and their rights. This greater knowledge can strengthen workers’ agency and ability improve working conditions overall.
  • Capacity building for sending countries’ employment & training agencies. Employers currently using the GECCO program are often concerned about the quality of job matching, as they need to ensure the arriving workers are well-vetted and suited to the job. At the same time, countries of origin seek to develop a better trained workforce for their own economies. The Spanish government could have a role to play in addressing both of these issues. Spain’s government should support the capacity and functions of sending-side public employment agencies so as to facilitate proper recruitment, skills matching, and hiring practices. It should also consider programs like Global Skills Partnerships that, if designed well, may bolster the pool of qualified workers in essential sectors in both Spain and countries of origin. These investments would represent an important step towards ensuring that the development gains of migration are felt by all.

Conclusion

In times of growing labor scarcity, Spain’s reform serves as a promising example for other European countries considering adjustments to their seasonal worker programs. If implemented as a holistic system, the changes have potential to strengthen productivity and economic growth in Spain, and lead to better outcomes for national and migrant workers alike.

In this blog we suggested a few additional policies and practices that should accompany the reform to bring further flexibility and innovation – thus make the GECCO program work better for employers while also safeguarding workers’ rights.

 

[1] In Spanish “Gestión Colectiva de las Contratacions en Origen”, GECCO.

[2] The New Zealand Recognised Seasonal Employer Scheme (a gold standard among temporary mobility programs) had overstay rates of less than 1 percent for its first six years. (Clemens et al 2018). The program allows workers from Pacific Island states to work for specific employers on a seasonal basis, no longer than 7 months within the 11-month seasonal period. While a migrant worker’s stay in one season is limited, it is possible for that worker to return in subsequent years to work for the same or a different employer. This sense of job security gives workers an incentive not to overstay their visas, while also creating relative consistency and predictability within the circular design.

In contrast, the UK’s Seasonal Workers Agricultural Scheme (as it existed between 1945-2013, it has now been reintroduced and fully redesigned) had overstay rates as high as 10 percent (Clemens et al. 2018). A significant contributor to the high overstay rates was the fact that the program was available only for full-time students, the workers had no prospects for returning to the UK following graduation and were thus prone to overstay once they completed school.

[3] In the U.S., occupational mobility led to fewer federal claims for wage and hour deception, discrimination, and trafficking, and higher wages.

[4] Employer-tied visas associated with inefficiencies totaling 6.6 percent of total costs and 11 percent of profits on average in the UAE

The Crucial Role of Implementation Strategies on Final Outcomes of Labor Mobility Policies

Posted on June 29, 2022 by - Uncategorized

Key Points

  • Sending and receiving countries lay out their interests when negotiating their domestic- as well as international-level policies. Despite best intents, many migration systems fail to achieve these goals in practice.
  • Migration policies and international agreements are crucial tools through which countries establish the terms of migration, but to be successfully implemented in practice, they must be underpinned by an effective and efficient implementing infrastructure.
  • Where policy change is not sufficient, we can improve outcomes in migration systems by strengthening the technical design of these structural elements.

Introduction

For those seeking to improve migration systems, the focus often falls primarily on policymakers and the changes they can bring to migration policies and regulations. This is often a steep uphill battle since the policy environment is in many cases strongly resistant to change.

However, changing policies is not the only way to strengthen migration systems. In fact, focusing solely on policy change underestimates the importance of implementing infrastructure and employment services behind these policies in determining the impacts of migration systems. This suggests that where policy change is far off, we can improve outcomes in migration systems by strengthening the technical design of these structural elements.

In this policy note, we argue that how legal frameworks interact with the other core pillars of a migration system is key to the effectiveness of migration policies. In other words, while migration policies and international agreements are crucial tools through which countries establish the terms of migration, they must be underpinned by an effective and efficient implementing infrastructure and a quality mobility industry delivering employment and support services to ensure the policy is fully implemented in practice.

Framework

Migration systems consist of three key elements: (1) the legal framework establishing the rights and conditions under which a worker from one country may be employed in another; (2) infrastructure implementing this framework; and (3) services through which workers find and secure jobs and are supported throughout the migration cycle.[1] Underpinning these three elements are monitoring and risk mitigations to ensure transparency and adequate protections for workers, and sustainable financing mechanisms to align the incentives of all actors. In this policy note, we use this as a descriptive framework to identify the fundamental core of migration systems; that is, these are the elements necessary for basic functioning of existing systems allowing workers to move into jobs in a well-managed way. Other functions (skill certifications, remittance transfers, etc.) may be added to significantly improve the functions of a system; however, for purposes of this policy note we focus exclusively the core elements required to function.

Figure 1: The Elements of a Labor Mobility System

Source: Rebekah Smith & Farah Hani, Labor Mobility Partnerships: Expanding Opportunity with a Globally Mobile Workforce, Center for Global Development (June 26, 2020), https://www.cgdev.org/publication/labor-mobility-partnerships-expanding-opportunity-globally-mobile-workforce

While sending and receiving countries are motivated by different interests when negotiating their policies – domestically and at international level – their objectives generally fall within three categories: (1) economic interests, in addressing labor market shortages in receiving countries and surplus labor in sending countries; (2) political interests, primarily in reinforcing cooperation to stem irregular migration; and (3) development objectives, seeking to maximize the development potential of labor flows from developing countries or to mitigate risks of migration.[2]

Despite best intents, many migration systems have not achieved these goals in practice. For example, administrative data from the Philippines (“one of the world’s most prolific promoters of labor migration and signers of bilateral labor agreements”) found no evidence that signing bilateral labor agreements (BLAs) resulted in increased out-migration of Filipinos through these corridors or remittance inflows to the Philippines.[3] Existing memoranda of understanding (MoUs) were not found to be successful in meeting objectives of improving recruitment systems (in the case of GCC countries and Malaysia) or reducing irregular migration (in the case of Thailand’s MoUs with Cambodia, Lao PDR, and Myanmar).[4] However, signing BLAs is associated with an increase in the stock of migrants in host countries, but it is not clear that the BLAs are responsible for this increase.[5]

For the purpose of this policy note, we define an effective system as one in which (1) workers regularly and predictably move through the channel and (2) workers’ rights are protected through clearly defined and fully implemented terms of migration. In order to regularly move workers through the channel, a system must be (1) flexible and demand-driven, focusing primarily on opening labor market access to address labor shortages and meet employers’ demand in select sectors;[6] 2) accessible to a broad range of employers and workers and cost-effective, reducing the total cost of migration to the extent reasonable. To ensure migrant rights are protected through clearly defined and fully implemented terms of migration, the system needs to be (3) transparent, so all involved actors understand their rights, responsibilities, and processes, and (4) integrated across borders through partnerships among parties on both sending and receiving side rather than a single overseeing authority.

The overall effectiveness of a labor mobility program is influenced by the structural elements both of legal frameworks and of the implementing infrastructure and employment services supporting it. Structural elements tied to these objectives include costs of migration and distribution of costs, processes for selecting workers and terms of employment, mechanisms for arbitration of disputes, and regulations for seeing to the protection of workers. This suggests that the effectiveness of mobility systems can be improved by strengthening the technical design of these structural elements.

In the following section, we explore how disconnects between the legal framework and the other core elements undermine their effectiveness.

Disconnects Between Elements of Labor Mobility Systems Undermining Effectiveness: Regular Movement through the Corridor
When the legal framework is not paired with robust implementing infrastructure and employment services, it is unlikely to facilitate regular movement through the corridor. The labor market access created by open migration channels may not be used in practice if there are not systems to connect employers with vacancies in the destination to jobseekers in the origin. The absence of active employment services may explain why visa access offered by a visa channel or a bilateral agreement alone has not been found to be effective in meeting the goals of facilitating migration flows.[7] For example, the governments of Afghanistan and Qatar signed an MoU in 2008 which was expected to allow 25,000 Afghan workers to move into jobs in Qatar; however, as of 2018 only a handful of workers ever found employment in Qatar via this agreement, due to the weak capacity of Afghan recruitment systems.[8] Similarly Japan has struggled to recruit workers at sufficient scale through the new Specified Skills Visa, though there is little information on specific barriers to its implementation.[9] [10] [11]

Additionally, when the legal framework is not paired with an effective and efficient implementing infrastructure, workers are less likely to move through it regularly. Ineffective infrastructure results in higher time and cost burdens for prospective migrants; if this time and cost burden significantly exceeds that associated with irregular migration, irregular migration can become the more attractive option. In implementing the MoU on regularizing migrants between Cambodia and Thailand. Workers present irregularly in Thailand were provided an identity card and a work permit for a total of 5500 baht, high relative to an average monthly wage of 1500 baht. The efficacy of the MOU has been very limited (with roughly 30% take up), as the cost of regular migration is much higher than the cost of irregular migration in this corridor.[12] Similarly, the insufficient implementing infrastructure in Ethiopia has resulted in a lengthy and redundant migration process – the process migration is long and complex with a number of redundancies and unnecessary steps.[13] each with delays of up to 2-3 months.

The lengthy process places a very real time and cost burden on the worker, incentivizing them to pay an agent to take on this burden or even to migrate irregularly to avoid the process altogether. In the Ethiopian context, members of the poorest families often opt for irregular migration as it is perceived as cheaper than going through regular channels.[14] Significant documentation requirements and the lengthy deployment process can also lead migrants to seek out recruitment agencies that can expedite deployment by falsifying documents; a 2007 study of labor migrants in three Indonesian provinces found that more than 40% of documents were falsified.[15] Redundancies in Myanmar’s labor sending system, with many manual stages processed and approved by multiple agencies, are shown to contribute to the prevalence of irregular migration while not meaningfully improving the quality of the migration experience for workers or employers.[16]

Case Study: Korea’s Employment Permit System
In 2004 South Korea introduced the Employment Permit System (EPS), in an effort to prevent irregular migration and answer labor scarcity in small and medium industries engaged in construction, manufacturing and services.[17] The EPS is managed entirely on a government-to-government (G2G) basis, underpinned by MoUs between Korea and the Ministry of Labor in each country of origin.[18] This means that the entire process, including worker recruitment and intermediation services, are handled directly by government agencies on both sides rather than any private sector actors, distinguishing the EPS from many other migration systems.[19] As of 2018, 16 origin countries[20] had partnered with Korea through the EPS, and more than 540,000 workers had moved into temporary jobs through the program since its inception.

The current G2G approach taken under the EPS is a response to problems under its predecessor, the Industrial Trainee System (ITS). The first challenge was high migration costs due to unregulated private recruitment activities, which in turn causes workers to overstay their visas to recoup the high migration costs. The second challenge was rights issues and exploitation as workers under the ITS did not have protection under Korea’s labor regulations.[21] It is worth noting that these are two of the three key problems identified in the previous section as resulting from a disconnect between the legal framework and implementing infrastructures. Under the G2G approach, the entire process is managed by the Korean government in co-ordination with the sending countries’ governments. These responsibilities include delivering a mandatory Korean language test during the pre-decision stage, workers’ identification and recruitment, provision of job-matching services and worker protection and counseling, and assistance with returns and settlement.[22]

The Indonesia-Korea MoU can provide an example of how this works in practice. The Director General of Placement and Development of Indonesian Overseas Workers (PDIOW) is identified in the MoU as responsible for recruiting, selecting and sending the workers, with the language test administered by the Korean Ministry of Labor. PDIOW is to prepare a roster of eligible jobseekers, who are then selected by employers in Korea. The Department of Manpower and Transmigration in India oversees delivery of predeparture orientation by a public agency. Public entities on both sides cooperate for the repatriation of migrants who are staying illegally in Korea, and if the percentage of Indonesian migrants staying irregularly in Korea will exceeds a certain percentage the visa allocation for Indonesia workers will subsequently be reduced. The MOU includes an annex which goes into more details on the hiring procedures.[23]

The EPS’s approach to BLA implementation has been a success by many metrics. By publicizing detailed costs of participating in the EPS and thus discouraging intermediaries from overcharging, the EPS was able to reduce costs paid by workers from USD 3,700 in its predecessor to less than USD 1,000, making it one of the lowest-cost destinations for workers in the world.[24] By reducing the upfront costs to the workers as well as strengthening bilateral cooperation between Korea and participating sending countries, the EPS has also managed to reduce the total number of migrant workers who overstayed their mandated time decreased from about 50% under the ITS period to less than 10% in 2014 under the EPS.[25] The EPS has also improved efficiency though robust interoperable ICT systems between ministries, and strengthened worker protections by including migrant workers in Korean labor laws and providing support services.

However, this approach to implementation also has its share of challenges and may not be appropriate for some contexts. This model depends heavily on the capacity of government institutions on both sides of the corridor. The EPS was built on the foundation of the Ministry of Employment and Labor’s infrastructure for intermediation and job matching as well as worker counseling, which allowed the Government of Korea to tap into economies of scale by expanding existing services to migrant workers, and further depends on the robust ICT infrastructure mentioned above. This model would struggle in the absence of an existing strong public employment service (PES), as is the case in many sending and receiving countries. Even with a strong PES, the success rates of the job matching process in the EPS are low. A large share of jobs posted through the EPS are not successfully matched with migrant workers and a significant share of those workers who are successfully matched with employers change jobs within a year.[26] The number of EPS workers entering Korea in the past few years was below the overall quota, only about 50% of the posted vacancies for EPS workers were successfully filled and over 60% of workers change jobs.

Disconnects Between Elements of Labor Mobility Systems Undermining Effectiveness: Integrated, Transparent Processes
Perhaps the most common impacts of a disconnect between the legal framework and implementing infrastructure are those relating to the terms of migration, particularly as relates to the cost of migration, rights, and employment conditions. Migration policies frequently include stipulations around each of these issues; however, without addressing the underlying dynamics causing them related to incentive structures in employment services and gaps in implementing systems, they are unlikely to deliver on the terms of the policies in practice. Here again, we focus on technical aspects of the design of mobility systems, though systemic power imbalances cannot be ignored are a core driver of these outcomes.

An example of this is extortionately high costs and fraud associated with recruitment and employment services. Labor mobility flows are frequently characterized by costs amounting to as much as nine months’ to more than a year’s salary abroad.A report by Verité, a US-based NGO, found that workers from Latin America and Asia paid intermediaries between USD 3,000 and 27,000 to secure visas to the US,[27] while the World Bank reports that South Asian workers regularly pay USD 3,000 to 4,000 for jobs in GCC countries.[28] These payments are made upfront, forcing workers to either sell off assets or take on debt with extremely high interest rates. Worse still, workers often arrive in the receiving country to find that the job is not as expected, or the pay not what they were promised. Verité reported that 43% of the Nepali workers they interviewed signed a different contract upon arrival in the receiving country with different terms to those they agreed to before migrating, and 36% never signed any contract. A 2019 GFEMS study, mentioned above, found that 61% of Bangladeshi male migrants surveyed never saw a contract, 44% reported deception by middlemen, and 24% reported deception by employers.[29] In the worst cases, migrant workers arrive to find there is no job.[30]

These bad outcomes of migration systems are driven by mis-aligned incentives and a lack of transparency and accountability throughout the process. First, the system of upfront payments creates no incentive for recruitment agencies to find quality employment for workers. Recruitment agencies receive payment either way, while sourcing and vetting quality vacancies requires greater effort (and expenditure) on their part. Second, there is a lack of transparency and accountability throughout the migration process. These are inherently cross-border operations, with different actors and different regulations on each side of the border, and no single entity responsible for ensuring the quality of the process from start to finish. BLAs are intended to address this by creating a consistent regulation across borders and aligning enforcement efforts; however, in practice this has been difficult to achieve without cross-border partnerships on implementation infrastructure and oversight.

Migration systems face similar challenges with enforcing stipulations around employment conditions. This has been particularly evident during the COVID-19 pandemic. For example, millions of workers were repatriated during the pandemic without being paid the wages they were due.[31] These workers have no avenue for redress as the issue falls within the jurisdiction of the host country, which they cannot access having been repatriated to their home country, leading to calls from civil society organizations for a cross-border mechanism to evaluate and assess claims of non-payment.[32]

Conclusion
The effectiveness of migration systems towards their goals of facilitating and increasing share of regular movement and enforcing quality standards through integrated, transparent processes hinges on how they interact with support implementing infrastructure and employment services. As the examples in this policy note showed, disconnects between the legal framework and the other core elements undermine the effectiveness of policies and international agreements and result in many of the problems we see in mobility systems today. In some cases, the absence of implementing infrastructure and employment services has prevented movement of workers though the corridor, and in others the existence of a low-quality mobility industry has undermined enforcement of the terms of migration particularly relating to employment fees, labor standards, etc.). This suggests that where policy change is far off, we can improve outcomes in migration systems by strengthening the technical design of these structural elements.

Guidance on Fair Recruitment Practices for Temporary Migrant Workers (U.S. Department of Homeland Security)

Posted on June 16, 2022 by - Uncategorized

Labor Mobility Partnerships (LaMP) applauds the Biden administration’s guidance on fair recruitment practices for temporary workers coming to the United States. At LaMP, we believe that when the H-2 seasonal worker visa programs work well, they can help U.S. employers fill persistent labor shortages and provide migrant workers and their communities with life-changing job opportunities. We echo the administration’s emphasis on the importance of building a responsible recruitment environment for the successful expansion of access to the H-2 visa programs. This guidance is an important step in shaping an environment which encourages responsible practices in the marketplace, and thus promotes the protection of migrant’s rights and dignity.

The guidance outlines a clear process for fair recruitment infrastructure, protection of fundamental rights for workers, and ensuring transparency and access to redress for workers and job applicants. Importantly, it translates international principles into tangible indicators and recommendations relevant to governments, recruiters, retailers, and other supply chain actors. It highlights and promotes best practices such as:

  • Clear and transparent recruitment process, and compliance of this enforced by governments
  • The design of systems and measures that license or certify legitimate recruiters
  • Taking appropriate measures against abusive and fraudulent recruitment
  • Trained and resourced labor inspectorates to monitor all labor recruiters

To complement this important step in the right direction, LaMP recommends concrete actions to further operationalize these guidelines with recruiters and suppliers. For example, a simple mechanism that verifies responsible practices at the “first-mile” (early stages) of labor recruitment would bring transparency and oversight to one of the least regulated stages of the recruitment process. Preventing poor practices at the “first-mile” (such as soliciting money in return for employment contracts) can help ensure both workers and employers have a safe and successful H-2 experience. Put simply, a robust responsible recruitment ecosystem is necessary for a well-functioning H-2 program, and a well-functioning H-2 program keeps food on American tables, helps our farmers thrive, and provides job opportunities to migrant workers that can bring enormous benefit to their families and communities.

LaMP is pleased to support this guidance document and continues to collaborate with the administration and industry stakeholders on concrete solutions that help governments, employers, and recruiters further translate these concepts into practice.

Escriva’s Immigration Reform: The Bad, the Good and the Best (in Spanish)

Posted on June 9, 2022 by - Uncategorized

 

PANELISTS

  • Gonzalo Fanjul, Fundación por Causa
  • Santiago Sánchez, VOICE(ES)
  • Kimberly Geronimo, Labor Mobility Partnerships (LaMP)

 

ABOUT THE EVENT

The purpose of this event was to create a space for an informed conversation and debate on the risks and opportunities of the 2022 Spanish reform of labor mobility regulations. The conversation included an analysis of the positive aspects of the reform as well as areas for improvement. LaMP highlighted sensible changes to Spain’s circular labor mobility pathway (GECCO) which increase predictability for employers and workers, and recommended future improvements to the program such as occupation-based visas.

LaMP Flights: The Need for More Concrete Practical Solutions as a Result of the UN’s International Migration Review Forum

Posted on June 6, 2022 by - Uncategorized

FAVORITE MESSAGE: 

Predictability is an essential element for the private sector to engage in sustaining safe and legal pathways for migrant workers. This seemingly simple idea has, however, proven to be challenging to accomplish in practice.

It is crucial to bring “doers” and “practitioners” on board to help develop actual practical solutions to address this as well as other labor mobility issues.

MAIN TAKEAWAY:

Predictability is an essential element for the private sector to engage in sustaining safe and legal pathways for migrant workers. This seemingly simple idea has, however, proven to be challenging to accomplish in practice.

It is crucial to bring “doers” and “practitioners” on board to help develop actual practical solutions to address this as well as other labor mobility issues.

The first ever International Migration Review Forum (IMRF) took stock of the progress made in the implementation of the Global Compact for Migration (GCM). However, the conversations stayed primarily at the “high” level with the majority of participants generally agreeing on broad areas where further improvements are necessary, but just a few conversations around concrete practical steps allowing for actual progress towards the GCM goals .

In order to understand the ‘nuts and bolts’ of good labor mobility pathways and practices, we need more room for the “doers” in the labor mobility sector to share knowledge and understanding of “HOW” to achieve the GCM goals. LaMP strives to bring the practitioners’ perspective to the international conversations and to partner with actors responsible for implementing quality mobility programs on the ground.

 

LaMP TEAM REFLECTION: 

It was a pleasure to participate in the first ever IMRF held at the United Nations headquarters in New York city. The LaMP team got a chance to finally reconnect in person with long-standing allies and meet new potential partners, ranging from state ambassadors and government representatives to private sector bodies and civil society organizations. While we are excited about all the possible opportunities stemming from these connections, the main official debates seemed to remain at quite ”high” level, simply reviewing and analyzing the broad areas where further improvements are needed. As such, they did not bring many concrete solutions, which could lead us closer to accomplishment of the GCM goals.

More specifically, we heard from the private sector about the need to create more predictable labor mobility pathways that would allow employers to make sound decisions, since the complexity and constant changes within the existing corridors often act as disincentives to hire from abroad. However, the IMRF led to just a very few practical steps towards conceiving such pathways. Similarly, while the participants quite unanimously agreed on the need for more responsible recruitment practices, the debate basically stayed within the realm of regulations.

At LaMP, we use a distinctive “practice first” approach: rather than focus on designing perfect policies and assuming they will translate into practice, LaMP emphasizes solving problems on the ground to demonstrate good labor mobility practices that pave the way for better policy. In designing new models to work in practice from the outset, we take a multi-stakeholder approach, developing pragmatic solutions that address the interests of all actors. An example of this is our work on responsible recruitment in the US H-2A program, where we aim to help responsible recruiters build a competitive advantage over bad actors in the industry by strengthening their service offerings to employers and addressing capacity constraints.

For our field to move forward, we need practical solutions and concrete partnerships aimed addressing “nuts and bolts” problems in the implementation of quality mobility programs. LaMP is digging in here, and we hope you will join us!

LaMP Flights: Opening More Opportunities for Workers from Guatemala

Posted on April 27, 2022 by - Uncategorized

MAIN TAKEAWAY:

Guatemala has a lot of potential to utilize the U.S. H2A agricultural seasonal worker program successfully (in terms of scale and quality). There is unprecedented political will and industry interest to ensure it grows exponentially and that workers are recruited responsibly. Guatemala has an abundance of hard-working people waiting for an opportunity to migrate for work. It is also home to several established conscientious recruiters serving seasonal worker schemes in Canada that could support the expansion of the H2A program in Guatemala.

LaMP TEAM NEXT STEPS:

The LaMP team met with various stakeholders, including government, local CSOs, migrant workers, recruiters, international NGOs, and grass-roots organizations, in order to better understand the impact potential of the growing the interest in the H2A program in Guatemala, as well as the recruitment process, constraints and opportunities of U.S. seasonal worker schemes.

During these meetings LaMP discussed concrete concerns and strategies to increase employer demand, improve institutional collaboration, and reduce the risk of exploitation for workers who wish to participate in the programs.

 

 

The LaMP team is now preparing a diagnostic of responsible recruitment market potential in Guatemala and  follow-up consultations with recruiters, who expressed interest in continued collaboration. To stay tuned for more details, don’t forget to sign up for our newsletter here and follow us on twitter! 

We need better solutions to the capital constraints faced by responsible recruitment agencies

Posted on April 6, 2022 by - Uncategorized

Responsible recruitment has a cash flow problem. In this blog, we present the problem and some ideas about solutions that tie access to finance to responsible practices. Rewarding ethical recruitment by solving cash flow constraints may tip the scales in favor of responsible firms, who have historically struggled to scale. 

Imagine you own a small staffing agency that recruits workers from your home state in Mexico and places them in seasonal harvesting jobs in the U.S. each year. You want to serve the workers you recruit well, without charging them unnecessary or illegal fees, and help them get good jobs abroad with good pay (sometimes as much as 20x more than local salaries). The workers you serve are low-income, so fees of a few hundred dollars may force them into debt just to access a job.

Your clients, U.S. farms who employ these workers, don’t pay you for your services until several weeks after the workers arrive on site. But to get the workers to the jobsite, you have all sorts of upfront costs, including staff time, visa fees, and travel and lodging for the workers as they make the trip from their homes. Because your business is small with limited physical assets, you can’t get a loan from a bank to cover those upfront costs. You essentially have two options to get the cash you need to deliver on a staffing contract: (1) ask your clients – the farms – to pay upfront, or (2) charge the workers fees.

Suppose you want to do the right thing and not charge the workers. This may not just be ethical but also makes good business sense because it increases worker loyalty to you and the farm and may be a selling point for farms concerned about their own social impact. You could ask your clients if they will cover at least 75% of your total costs upfront. But most other staffing agencies charge workers fees and therefore appear to offer your clients a better (financial) deal, undercutting you and taking market share. Now what do you do? How can you grow your business? How can you be price competitive as a morally responsible recruiter with limited or no cash-in-hand and reserves?

Limited working capital is a challenge faced by responsible labor recruiters operating in cross-border markets across the world. Responsible recruiters are “double bottom-line” agencies committed to respecting workers’ rights while serving employer clients. They commit to a series of ethical practices and have mechanisms in place to avoid fraud and extortion of workers seeking employment abroad. And as a rule, responsible recruitment agencies do not charge workers illegal or unfair fees.

Because responsible agencies don’t charge workers fees, they are at a competitive disadvantage. Unscrupulous recruiters that charge workers unfair or illegal fees can use this revenue as working capital. In effect, worker fees “solve” the liquidity problem for recruiters, absorbing the risk and debt burden from the firms.This in turn allows these agencies to offer more favorable terms to their clients (the employers), undercutting responsible agencies in the market.

These disadvantages limit the growth of responsible recruitment and have real human costs. Illegal and unfair fees can force workers into severe debt and forced labor situations. Sadly, worker fees, fraud, and exploitation are widespread, and horrific cases all too often make headlines. The problem is only growing more urgent as demand for temporary foreign labor explodes (see Figure 1 for an example from U.S. agriculture) – fueling the expansion of recruitment markets and the number of people at risk of exploitative practices.

Figure 1: The US H-2A program for agriculture, like many other temporary visa programs, is growing rapidly, along with its corresponding recruitment industry

Source: Rural migration news, UC Davis 

If we want responsible recruitment to scale, we need to solve the challenges facing responsible firms. This includes shifting the financing ecosystem within which responsible agents operate so that they can get the working capital they need to serve workers and employers at scale. Solving this challenge will require new ways of financing and incentivizing international recruitment that encourage capital to flow to responsible agents.

Here are three preliminary approaches that might help move the needle:

1. Blended outcomes-based debt financing could provide responsible recruiters with low-cost loans to cover their working capital needs. Eligibility could be tied to certain quality standards that recruiters must meet. These standards would initially include the demonstration of systems and processes that ensure responsible practices. For repeat borrowers, future loan eligibility could incorporate independent measures of positive worker outcomes from past contracts. This option would most likely attract smaller recruiters or new entrants who have no access to traditional sources of financing and who would benefit from increased market exposure tied to their participation. This approach would require significant philanthropic or patient capital to de-risk or subsidize the loans made to responsible agencies.

2. Supply chain finance models involve commitment of up-front capital by larger, downstream actors (think large retail brands) conditional upon adherence with quality standards and continuity of vendor supply. Assuming the quality standards address unethical labor recruitment, this approach could solve cash-flow problems for recruiters while also reducing the risk of supply chain disruption for the downstream corporations. This model would also transform recruiters into ‘partners’ rather than ‘agents’ of their clients, allowing both parties to plan around and invest in a longer-term relationship defined not only by quantity but also quality. In theory, cheap loans sponsored by supply chain leaders would be attractive to any labor provider or employer.  Yet slim profit margins and fierce competition in the industry may limit the pool of brands and retailers who would be willing or able to finance this sort of investment. As a result, this approach may work best in premium markets with clear product differentiation where retailers are more willing to invest in ensuring the supply of specific products (for example, certified organic foods), and in markets where sole-sourcing agreements are common.

3. Increased venture investment would target specific recruiters and invest in those which look especially promising in terms of growth and good practice. Whereas the first two ideas are lighter-touch and open to any recruiter that meets eligibility requirements (either for outcomes-based loans, or for supply chain finance), this third option is a more intensive engagement and ‘eligibility’ would be assessed on a case-by-case basis. This idea would be most likely to work for recruiters who already demonstrate a clear track-record of responsible practices and good potential for growth.

Of course, working capital constraints are just one challenge responsible recruiters face in the market. They may also absorb other risks that ‘standard’ recruiters shift onto the shoulders of workers or employers, such as the risk of failed visa applications, poor job matching, and abscondment. Given the complexity of these challenges, no single solution is a silver bullet. Nevertheless, access to working capital can give responsible recruiters some breathing room, and provide them with the liquidity they need to undertake proper vetting, training, and protection of workers. Quality, alongside quantity, will help ensure that employers, workers, and responsible recruiters alike reap the benefits of efficient and fair mobility pathways.

Getting responsible recruitment right at scale is critical.

Aging populations mean that employers must increasingly look abroad to find the labor they need. At LaMP, we think these trends can be harnessed as a force for good. Workers who move from poorer countries to richer countries can dramatically increase their earnings. For instance, young people who move from Kenya to study and work in Germany may increase their annual income by a staggering 1,563%. This can be life changing. If workers return home, they invest this money in their families and communities. If they can stay, and choose to do so, they still likely send money home as remittances (an important contributor to GDP in poorer countries). And there is evidence that outmigration for work opportunities contributes to a “brain gain” effect in the sending country rather than the feared “brain drain.” In short, the upside of doing international recruitment well is enormous, and the number of lives touched by labor recruitment is only set to increase.

But all these potential benefits are only realized if recruitment systems work for both employers and workers. We’re looking for partners to help us redesign the playing field, so that responsible recruiters have the edge they deserve. If you have thoughts, reactions, or ideas on any of this, please reach out – we’d love to collaborate with you.

The research included in this blog was made possible in part through funding by the Walmart Foundation. The findings, conclusions, and recommendations presented in this blog are those of Labor Mobility Partnerships along, and do not necessarily reflect the opinions of the Walmart Foundation.