Foreign Workers

The subject of foreign workers is heating up in the U.S. right now, and has been a hot topic in Canada in recent years.  Local workers often see foreign workers as cheap labourers who take away their jobs.  Employers see foreign workers as a way to find scarce skills and cut costs.  As is common in debates, both sides are partially right and partially wrong.

In a simple but flawed view of the world, there is a fixed set of jobs available in a country, and workers compete for these jobs.  With this way of thinking, when a foreign worker gets a job, that’s one less job available for local workers, and when a foreign worker leaves (or any worker retires), there’s one more job available to local workers.

This way of thinking is reasonable for most jobs, but it’s wrong for the most skilled positions.  There are only so many highly skilled people to go around.  These workers help make businesses succeed.  They create more jobs than the one job they occupy.  A single innovation can create many new jobs in building, selling, and maintaining a new product.

When we bring in highly skilled foreign workers, their efforts create new jobs that benefit local workers.  When a highly skilled worker leaves or retires, the opening can’t easily be filled with someone else with comparable skills.  Rather than making one job available to another worker, we end up with less of the innovation that is critical for creating jobs, and eventually the total number of jobs available decreases.

The challenge is to figure out which foreign workers will create new jobs and which are just taking a job away from a local worker.  We can’t trust employers to make these determinations because they want to cut salary costs for all their jobs, regardless of whether the job requires rare skills or not.  We can’t trust local workers to make such determinations either if they don’t understand that some highly skilled foreign workers will create more local jobs.

Ideally, a competent government would be able to make reasonable determinations of when a foreign worker is likely skilled enough to be a net creator of jobs, and when he or she is just taking a job away from local workers.  These determinations don’t have to be perfect, but they require a focus on the correct goals rather than bending to the will of unions, employers, or racists.  I won’t hold my breath.