Plenary Presentation, Fifth International Metropolis Conference, Vancouver, November 2000
International Movements of Skilled Workers
David Ley
Department of Geography
University of British Columbia, Canada
and Vancouver Metropolis Centre: RIIM
dley@geog.ubc.ca
The remit of this session, to review the implications of transnational communities for national and local economies, for business, and for labour is a very broad one. My emphasis will be on the top tier of international migrants, professionals, managers, and other skilled workers, who cross international borders in pursuit of employment opportunities. In the first parts of the presentation, I wish to raise several more general questions about the movement of skilled workers. Towards the end I will look at the specific outcomes of a distinctive effort to recruit entrepreneurs endowed with human and financial capital, the business immigration programs operating in Canada, Australia, New Zealand and elsewhere.
We see among the highest level of skilled workers a sense of economic opportunity that makes them often short-term stayers, passing up long-term engagement and citizenship in their receiving countries for short-term objectives. The relevant geometry here is often circulatory rather than the linearity usually implied by migration. They are commonly movers rather than migrants, transnational actors who are rarely contained within the borders of the nation state. The task of the receiving state should be to recognise them for what they are and find policies to optimise their short-term presence, for transnational actors are likely to be subversive of long-term attempts at containment. This is a moot point for the desire of the nation state is of course containment, the reproduction of national citizens.
Today skilled migration is a growing component of the annual migration budget and it is growing by design. The categories of economic migrants are privileged in national policy in many states, occupying a rising share of the total. In Canada, for example, economic migrants have risen from 41% of immigrant and refugee admissions in the first half of the 1990s to 56% in the second half of the decade. The configuration of the points system guarantees that these are skilled entrants. Recently Germany and Britain have declared themselves in the hunt for overseas skilled workers, while the American Senate recently endorsed a bill to provide 600,000 short-term visas for IT workers over a three-year period.
The geography of skilled migration has attracted a good deal of attention (Koser and Salt 1997). One theoretical stream has emphasised the role of global cities as command and control sites of the international economy, attracting the best and the brightest among an international labour force. For example, London has attracted a significant ex-patriate population of skilled workers disproportionately in the banking and finance sector from the US, Europe, Australia and Japan, who help to sustain the high priced rental districts from the West End to Kensington, giving rise to such local names as Kangaroo Valley (White 1998). This workforce is associated with the global reach of multi-national corporations whose regime transcends the borders of the nation state. In this global space of flows of labour, finance and information the containment role of the nation state appears to have been severely eroded. This is an implication one can read into the seminal contributions of global city theorists, and it is symptomatic that cities such as Washington, Brussels or Beijing, which scarcely feature as sites of corporate headquarters, are also understated in terms of global primacy in this literature, despite their indisputable global reach. A criticism of this work from a European perspective more generally has been its devaluation of state power and national policy that does make a difference to economic flows.
An alternative, and I would suggest, complementary view of the geography of skilled migration is one that identifies not just private corporations, but also nations as competitors for an international labour force of skilled workers. This is a point that has been argued by economists and others in their reference to a global immigration market where nation states become, as it were, competing employers for skilled foreign nationals. Business immigration programs, and more latterly tertiary education, are excellent examples of this market at work, as countries like Australia, Canada, and the United States are engaged in competitive recruiting for entrepreneurs and students, particularly in Asia. More newsworthy has been the intense competition for Indian IT professionals, where late arrivals like the UK and Germany are finding that the United States has the market largely sewn up.
Related to this discussion is the vexed issue of brain drains. The typical scenario here is the draining of the developing world, notably Asia and post-1990 Eastern Europe, but more regional flows exist, for example within the European Union, where one example has been the recent movement of young skilled French workers to Greater London, or within North America, where Canadian talent has been drawn to the United States. Interestingly, in both cases, one of the attributed causes of the movement has been the lower tax structure in the countries of the Reagan-Thatcher axis, revealing both the basis for national policy to make a difference, and also the state-centred emphasis of the immigration market perspective compared to the global city problematic.
However, in the brain drain literature, the world is rarely as simple as it seems. The very existence of a significant brain drain has been severely contested in Canada. Sustained work by Don DeVoretz and his students seems to have gained the upper hand showing a recurrence in the past decade of substantial net losses that characterised the 1950s. That earlier brain drain, interestingly, was arrested by the 1965 Immigration Act in the US, while it is deregulation and immigration revisions in the climate of the FTA and NAFTA protocols that have re-opened the borders, again intimating the relevance of the actions of the nation state. While numbers are not large, reaching a net level of some 4,000 managers and professionals in 1996-97, they seriously impact certain strategic fields notably health care and applied science, and are growing. The public finance implications of this skills transfer are laid out: a loss of almost $1 billion a year between 1989 and 1996 in foregone education expenditures (DeVoretz 1999). Immigrant replacement, someone else's brain drain, does not make good this loss, due to lower productivity and settlement costs, so that the overall skill exchange leads to a large deficit of close to $1.7 billion a year over the same period.
Canada attempts to recoup these losses by robbing other states of their best and brightest, and both the absolute and relative losses may be much more serious in the budgets of the developing world. There is a moral and political question here for as DeVoretz (1999) notes "in essence Canada is asking the peasant taxpayers in these two poor countries [India and China] to reimburse the Canadian taxpayers for their lost human capital, which has flowed to the United States". It is reported, for example, that India needs over 2 million IT workers of its own this decade (Harding, 2000), but with movement overseas this target will be elusive. As one ex-patriate IT manager from India put it: "in areas like IT, the profession is beginning to command a higher loyalty than one's nationality" (Bowers, 2000). Here the edacious appetite of the US economy is a major force, indicated in the recent (October) Senate decision, secured by a scarcely precedented 96-1 majority, to allow up to 600,000 short-term visas for foreign workers in high tech fields over the next 3 years.
The point here is not to deny the existence of brain drains but to muddy the category, emphasising the diversity of actual flows of skilled workers. Flows are also circulatory, short-term, and among the leading core economies. Bolstering globalisation theorists, for example, Americans and Japanese hold 45% of long-term work permits in the UK, with their numbers concentrated in Greater London (Findlay 1995). The notion of a brain exchange is borne out by British immigration estimates from the International Passenger Survey. Over the 1989-1998 period, professionals and managers represented the largest single occupational group to enter the United Kingdom, averaging some 84,000 a year. But net outflow of the same cohort virtually removed the gain, leaving a net increment of only around 9,000 workers each year. Reports of return migration of Indian IT workers from the United States to India, or at least the opening of new or satellite operations there, also move the brain drain discussion into new terrain.
A good deal of this labour movement is short-term, introducing temporality to what has so far been a geographical discussion of movement. To some extent of course, these visas will be transferred into long-term settlement, but in other cases they will end as short term stays, and encourage a model of skilled circulation between fixed-term contracts in origin and destination states. The transnational circulation implied here challenges the one-way dynamic inherent to brain drain discussions. Some authors indeed describe this labour cohort as 'skilled transients' (Findlay 1995) in light of their frequent movement.
Skilled migrants are sought because they are perceived to bring relevant human capital and rapid economic integration to their nations of adoption. But this depends in part on the level of skills concerned. The discussion so far has largely covered highly skilled workers, but typical economic migration reaches much deeper into the skills spectrum. While Australia and Canada have had immigration streams closely aligned to employment needs, an important question is not the selection criteria, which seem rigorous enough, but rather the pass mark, the points needed to qualify for entry. Jeffrey Reitz (1998) in a detailed analysis of the 1970s immigrant cohort has observed that the low threshold for entry in both countries meant that for many years selection introduced only a weak filter on quality. The low pass mark meant that while the candidates with the least human capital were excluded, high skills were not guaranteed. Ironically, the United States, with its greater emphasis on family reunification, secured consistently higher skilled workers because the smaller labour-based immigration streams did require more demanding levels of human capital. Entry through the skilled worker category in Canada and Australia in the 1970s did not then ensure very high job skills.
However, this historic analysis seems much less true today. The pass mark for entry for skilled workers to Canada was raised in the mid 1980s, and a unique current data base suggests that the higher threshold has achieved its objective of securing immigrants who make an almost immediate contribution to the Canadian economy, with minimal signs of dependency upon the state. The Government of Canada has developed an immigration data base (IMDB), consisting of a linkage of immigrant landing cards with subsequent tax-filer returns over a time series that began in 1980. This large and unique source does enable the economic success of immigrant cohorts to be charted over time. The returns of course are highly aggregated to ensure confidentiality but at the same time aggregation is possible by immigrant streams, including gender, country of origin, destination province, and immigration program. So it is possible for example to trace the success of skilled workers who entered Canada in successive years, or to follow one annual cohort through a series of years. The results offer a significant endorsement of selection criteria and the threshold chosen for entry. The employment earnings of skilled workers showed a rapid elevation, and in the 1994 tax year every annual cohort except the most recent showed earnings above the national average of $25,000 (CIC 1997). Indeed within 10 years earnings were close to double the national average. Herein is the confirmation of the desirability of skilled migrants and their contribution to the state's economic objectives.
But there is another point to be made from this analysis, and with it I want to move to the final part of my commentary, to business immigration as a subset of skilled migration, requiring, to qualify for entry, either significant investment in venture capital schemes and/or the establishment of a business. Recruitment of these wealthy immigrants has been a priority not least because of competitive programs in other countries, notably Australia and New Zealand. But IMDB data indicate that this program is in fact running well below the attainments of the skilled worker category. It takes business immigrants almost ten years to reach the national income standard, and they scarcely move beyond it. More detailed information for British Columbia, essentially Vancouver, which has been the most popular destination of business immigrants, makes the same point (Ley, 1999, 2000). There are surprisingly low levels of achievement, with modest earnings, and low levels of employment. In no year did more than half the population report employment earnings, and attainment for the self-employed was even lower. Interviews with business immigrants support these data (Ley 2000). There is a very low level of economic activity in Canada, and rather than manufacturing, preferred by policy-makers, the most common niches are retailing, restaurants, and the import-export business in the over-crowded enclave economy. On the basis of our interviews it would seem that there has been an overly romanticised view of the ethnic enclave economy in the academic literature. What we are finding are high levels of family self-exploitation with long hours of work, for very low returns, with high numbers of business failures.
The difficulties of running a successful business in Canada are attributed to a different economic milieu from that of Hong Kong or Taiwan where most business immigrants have scored their successes. High levels of taxation, and an economic culture that includes strict labour and environmental legislation are daunting, particularly to immigrants for whom speaking English is a significant challenge. These difficulties are widely known, even in advance of landing in Canada, so that most business immigrants avoid active economic activity in Canada. Some engage in passive real estate or stock exchange investment, and take early retirement. Others hunker down and put in their three years of residency without engaging in entrepreneurial activity - immigration gaol as some call it - before qualifying for citizenship. They then become strong candidates for return migration. Indeed it has been a conceptual - and policy error - to regard them simply as migrants, for like other highly skilled workers many have been movers not migrants, committed only to the short-term stay, not a long-term commitment. While accurate data do not exist of numbers of return migrants, estimates have been steadily rising. In the early 1990s it was guestimated that around 15,000 people were living in Hong Kong with Canadian passports. Around 1997 that figure had risen to 150,000, and this autumn one estimate as high as 500,000 has been reported in the media. My own analysis notes a gap of some 100,000 up to 1995 between numbers of business immigrants recorded at landing and numbers identifiable through IMDB tax-filer records (Ley 2000). Like the French flocking to London, or Canadians to the US, more clement tax regimes comprise part of the international gradient along which these skilled workers are moving.
Another family strategy of business immigrants is the model of the astronaut household, fragmented on the opposite shores of the Pacific, with dependents located in North America or Australia, while the household head is employed in East Asia. This is much to say about this model of transnationalism - and much more will be said in the workshops - but it clearly subverts the intent of the business immigration programs.
While these remarks have been derived from Canadian research, I should add that there is evidence of generally similar outcomes for business immigration programs in Australia and New Zealand (Ip et al. 1998, Ho and Bedford 1998).
Conclusion
I want to conclude these remarks by placing business immigration within the context of the skilled migration literature. First, and conceptually, it does seem that like other workers with high levels of human capital, many of this cohort are movers rather than migrants, planning to engage in short-term and circulatory movement. Their model of transnationalism clearly compromises state policies that are targeted toward containment and long-term residence. Their movement overwhelmingly to the gateway cities plugged into a globalised economy seems to underscore their footloose behaviour across national borders.
Second, this conceptual distinction reaches into policy, for public objectives presuming long-term migrants will likely not fit a reality of short-term movers. One point to note in policy terms is the role of tax regimes. There is evidence that tax legislation does make a difference to the locational choices of some highly skilled workers, whether they be the French in London, Canadians in the US, or return migrants from Canada to East Asia. More easily attainable intervention rests in the process of selection itself. The threshold for entry for business immigrants to Canada is very low indeed. Out of a maximum of 87 points across seven selection criteria, entry is secured by an applicant who scores only 25 points (CIC 1999). This means that entry can be gained even if a candidate has no post-secondary education, and speaks neither English nor French. In recent years (1995-1997) this was indeed the case with half of the admitted candidates lacking at least one of these attributes, compromising their chances of economic achievement. A higher pass-mark for entry, such as occurred earlier with the skilled immigrant program, is a readily manageable policy avenue to improve the modest performance of the business program.
Acknowledgement
I am grateful to Professor Paul White of Sheffield University for his assistance in preparing this paper. Errors and emphases are of course my own.
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