Published on People Move

Will the economic recovery increase demand for immigrants in the labor market?

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A recent study by PEW Hispanic Center states that immigrants are finding jobs faster during 2010.  According to the report “immigrants in the U.S. have gained 656,000 jobs since the Great Recession ended in June 2009. By comparison, U.S.-born workers lost 1.2 million jobs. The unemployment rate for immigrants fell over the same period to 8.7 percent from 9.3 percent. For American-born workers, the jobless rate rose to 9.7 percent from 9.2 percent.”

Two other labor indicators show a recovery for immigrants workers in the US labor market: 1) an increase in the labor force participation from 68% in the second quarter of 2009 to 68.2% in the second quarter in 2010; 2) an increase in the employment rate from 61.7% to 62.3% during the same period. The study also points out at the greater mobility of immigrants in finding jobs in different states. In a previous podcast we underscored the mobility of hispanic immigrants due to their diaspora connections (see previous post).

However, immigrants have experienced a larger decline in earnings.  The report finds that “from 2009 to 2010, the median weekly earnings of foreign-born workers decreased 4.5%, compared with a loss of less than one percent for native-born workers.”

The situation is different for skilled workers. There are still not signs of recovery in US employment for skilled workers since the H1B visa cap has not been reached yet see here). In Germany, according to a new survey carried out by the German Chambers of Industry and Commerce (DIHK), about 70 percent of German companies have difficulty filling vacancies for skilled jobs. But as the economy starts recovering, it will be difficult to recruit foreign workers since Germany’s immigration laws require proof of high earnings and the country does not accept dual citizenship (See article)

In Europe the application of the blue card is also making difficult to skilled workers from developing countries to compete in the EU labor markets since they need to be offered wages at least 1.5 times more than the average gross annual salary in the country that they will work (see previous post)


Sonia Plaza

Senior Economist, Finance, Competitiveness and Innovation Global Practice, World Bank

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