Immigrants and the economic

recovery: What are the policy

implications?

Naomi Alboim2010 ALLIES Learning Exchange

May 7, 2010

Halifax

2

Purpose

As the economy recovers from the most recent recession, and as data become available, we are starting to see the impact of the recession on Canada’s immigrants.

This presentation:

– Draws conclusions about how immigrants fared during the recession

– Raises public policy implications

– Makes recommendations for consideration by public policy makers

3

Key findings

Immigrants as a group were hurt badly by the recession, but the impact varies depending on sector, geographic location, length of time in Canada, gender and other factors.– Hardest hit: recent immigrants; men; young;

manufacturing

Though hurt by the recession, many are not eligible for the things that would help them to recover (e.g., language training, employment insurance, income assistance).

We need to unpack the data to design targeted interventions that will enable immigrants to contribute to economic growth.

4

Data sources

Looked at Canada, Ontario and Greater Toronto Area to see if the picture changes.

A lot of helpful data from Statistics Canada, in Metropolis presentations.

Intergovernmental Relations Group (IGR) of Toronto Region Immigrant Employment Council (TRIEC) was instrumental in generating additional data and insights for GTA. – municipal welfare data

– focus groups with immigrant-serving agencies

– early warnings from the field and funded organizations

– in-camera monthly meetings to identify gaps and recommendations for action

5

Recession hypothesis

One hypothesis going into the recession was that it would have a disproportionately negative impact on immigrants in Canada.

Preliminary data indicate this hypothesis was correct, but with differential impact among immigrants.

– Main focus of this presentation.

– Caveat: more data and study required

6

Immigration levels

In the 1980s, Canadian immigration levels were reduced in response to recession and subsequent persistent high unemployment rates .

During the recent recession, immigration levels were maintained to meet longer-term population and labour market objectives– This was also the approach adopted by New Zealand and

Sweden. Australia and UK, however, reduced immigration levels in response to recession.

Don’t know the longer term impact on cohort arriving during recession.

Need to know how immigrants have fared and other impacts of the recession on immigrants to determine policy and program interventions.

A. How have immigrants fared in

Canada?

8

Job loss: length of residency

Recent immigrants were hardest hit by recession job loss

Between October 2008 and October 2009, recent immigrants accounted for 22% of all job losses, compared with just 3% of employment.

Consistent with the experience of other OECD countries.

Established immigrants fared relatively well.

Immigrants with 10 years or more residency actually gained jobs, compared with a 2.2% loss in employment among Canadian-born workers.

Immigrants here between 5 and 10 years were comparable to Canadian born.

9

Job loss: length of residency

Job losses and employment by immigrant status-Canada October 2008 – October 2009

Seasonally unadjusted, 3 month moving average

Immigrant status % change in employment

Recent immigrants, 5 years or less -13.4

Immigrants, between 5 and 10 years -2.8

Canadian-born -2.2

Established immigrants, 10 years + +1.4

Source: Statistics Canada labour force survey. From HRSDC presentation at Metropolis conference 2010.

10

Job loss: cities

Recent immigrants accounted for essentially allnet job losses in Canada’s three largest cities (Montreal, Toronto, Vancouver) between October 2008 and October 2009.

– Their employment declined by 17%, compared to virtually no decline for Canadian-born workers.

Recession impacts were less severe for immigrants with 5 to 10 years residency.

Established immigrants with more than 10 years of Canadian residency experienced job gains, faring better than Canadian-born workers.

11

Job loss: cities

Job losses and employment in Montreal, Toronto and Vancouver by immigrant status,

October 2008 - October 2009 Seasonally unadjusted, 3-month moving average

Immigrant status % change in employment

Recent immigrants, 5 years or less -17.2

Immigrants, between 5 and 10 years -5.5

Canadian-born 0.0

Established immigrants, 10 years + +0.8 Source: Statistics Canada labour force survey. From HRSDC presentation at Metropolis conference 2010.

12

Job lossImmigrants vs. other groups

Nation-wide and in the 3 largest cities, recent immigrants are more affected by job loss than other groups.

– Due, in part, to status as new labour market entrants with relatively low job tenure and Canadian work experience.

– Even though educated, did worse than workers with less than high school.

Youth were also significantly overrepresented among net job losses, but to a lesser degree than recent immigrants.

13

Job lossImmigrants vs. other groups

Job losses and employment among selected groups October 2008 - October 2009

Vulnerable groups % change in employment

Recent immigrants, 5 years or less -13.4 Workers with less than high school -11.1 Youth 15-24 -8.7 Aboriginal peoples -5.1 Workers with high school and/or some PSE -3.0 Older workers 55+ +3.7 Source: Statistics Canada labour force survey. From HRSDC presentation at Metropolis conference 2010.

14

Employment by industry

Immigrants are significantly represented in certain industries, particularly manufacturing.

– The manufacturing sector was hardest hit by the recession and job loss.

– Employment fell by 36% for recent immigrants, compared to 14% for established immigrants and only 8% for Canadian-born workers.

15

Incidence of employment by

industryIncidence of employment by industry for selected groups (25-54), February 2010

0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0%

Agriculture

Forestry, fishing, mining, oil and gas

Utilities

Construction

Manufacturing

Trade

Transportation and warehousing

Finance, insurance, real estate and leasing

Professional, scientific and technical services

Business, building and other support services

Educational services

Health care and social assistance

Information, culture and recreation

Accommodation and food services

Other services

Public administration

Recent immigrants, 5 years or less Established immigrants, 5 years+ Canadian-born

Source: Statistics Canada labour force survey. From HRSDC presentation at

Metropolis conference 2010.

16

% change in employment by

industry% change in employment by selected industries and immigrant status,

seasonally unadjusted, October 2008-October 2009

-31

-8

-27

-36

-13

-5

-16

-9

3

0

-6

5

-3

-7

-1

-7 -6

2

-14

-9-8

-40

-35

-30

-25

-20

-15

-10

-5

0

5

10

Goods-

producing

sector

Services-

producing

sector

Construction Manufacturing Transportation

and

warehousing

Accommodation

and food

services

Professional,

scientific and

technical

services

Recent immigrants, 5 years or less Established immigrants, 5 years + Born in Canada

Source: Statistics Canada labour force survey. From HRSDC presentation to

Metropolis conference 2010.

17

Gender impact

Immigrant men – like Canadian-born men – were much more severely affected than immigrant women by recession-related job loss.

– They experienced a much steeper drop in employment rate and larger rise in unemployment rate than immigrant women.

– As with Canadian-born men, this is largely related to the composition of employment (e.g., male employment in manufacturing and construction).

The gender difference was most pronounced among recent immigrants:

– In this group, men’s employment rate declined by 8.5% points, vs. no decline for women.

18

Gender: changes in employment

ratesChanges in employment rates by immigrant status and gender,

October 2008 and October 2009, seasonally unadjusted

-9

-8

-7

-6

-5

-4

-3

-2

-1

0

1

Men Women Men Women Men Women

Recent immigrant, 5 years or less Established immigrant, 5 years+ Canadian-born

Perc

en

tag

e p

oin

ts

Source: Statistics Canada labour force survey. From HRSDC presentation at Metropolis

conference 2010.

19

Age: job loss and employment

Immigrants in the youngest category - age 15 -24 – are the worst off.

Within the 25-54 group, immigrants – especially recent immigrants – were noticeably more affected by recession job loss than Canadian-born.

Older recent immigrants, like older Canadian-born workers, experienced job gains between October 2008 and October 2009.

20

Age: changes in employment

ratesChanges in employment rates by immigrant status and age,

October 2008-October 2009, seasonally unadjusted

-7

-6

-5

-4

-3

-2

-1

0

1

15-24 25-54 55 Years + 15-24 25-54 55 Years + 15-24 25-54 55 Years +

Recent immigrants (<=5yrs) Established immigrants (5 yrs+) Born in Canada

Perc

en

tag

e p

oin

ts

Source: Statistics Canada labour force survey. From HRSDC presentation to

Metropolis conference 2010.

B. Regional differences?

22

Regional differences

Preliminary findings show the recession has had a disproportionate impact on immigrants as a group in Canada.

What about regional differences?

Looked at Ontario and Greater Toronto Area to show how the picture can change.

23

Ontario snapshot

30% of Ontario’s labour force is immigrants

55% of Canada’s immigrant labour force is in Ontario.

40% of Canada’s immigrant labour force is in the Toronto Census Metropolitan Area.

Ontario has 39% of Canada’s population and 55% of the job loss.

– Decline in manufacturing, construction and service sectors key factor because that is where immigrants are significantly represented in Ontario.

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Regional differences in labour

force

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

CA NF PE NS NB QC ON MN SK AB BC

Pe

rce

nt o

f Lab

ou

r Fo

rce

Very Recent (< 5 yrs) Recent (5 - 10 yrs) Established (> 10 yrs)

Ontario - 30%

Canada - 21%

Source: Statistics Canada Labour Force Survey. From Ontario Ministry of

Citizenship and Immigration presentation at Metropolis 2010.

Immigrants in the Labour Force

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Ontario: unemployment

Once in Canada 10 years or more, the unemployment rate is not much different than Canadian born.

Major concern: for very recent immigrants (less than 5 years), the rate is still going up.

Also concerned about recent immigrants (5-10 years).

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Ontario: unemployment

16.1

12.6

8.7

8.1

0

2

4

6

8

10

12

14

16

18

20

Jun

-08

Jul-

08

Au

g-0

8

Sep-

08

Oct

-08

No

v-0

8

Dec

-08

Jan

-09

Feb

-09

Ma

r-0

9

Ap

r-0

9

May

-09

Jun

-09

Jul-

09

Au

g-0

9

Sep-

09

Oct

-09

No

v-0

9

Dec

-09

Jan

-10

Un

em

plo

ym

en

t R

ate

(%)

Ontario Unemployment Rate by Immigrant Period of Arrival (Jun 08 to Jan 10)

Very recent immigrants (< 5

yrs in Canada)

Recent immigrants (5 - 10 yrs in Canada)

Established immigrants (> 10 yrs in Canada)

Canadian-born

Source: Statistics Canada Labour Force Survey. From Ontario Ministry of

Citizenship and Immigration presentation at Metropolis 2010.

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Ontario: education and

unemploymentUnemployment rate for university graduates, Ontario

13.9

9.7

10.9

12.011.5

4.25.0 5.0

3.1 3.1

12.5

14.6 14.5

4.5

2.8 2.9

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

January 2009 February

2009

March 2009 April 2009

Very recent immigrants, 5

years or less

Recent immigrants, 5 to 10

years

Established immigrants, 10+

years

Born in Canada

Source: Toronto Immigrant Employment Initiative, York University.

28

Greater Toronto Area:

unemployment

Unemployment rate Toronto CMA Labour Force Survey

July 08 Aug 09 Dec 09 Less than 5 years in Canada 12.6 16.5 14.8 5-10 years in Canada 9.9 17.7 12.5 10+ years in Canada 8.0 10.9 8.4 Born in Canada 6.2 9.1 7.6

Much of the recent employment growth is in part time work.

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GTA: need for services

Immigrant service agencies, community service providers and municipal governments report significant increase in recently unemployed immigrants who:

– Have been in country more than three years

– Entered manufacturing because unable to find jobs suitable to their education and experience

– Did not upgrade language skills or pursue licensure upon arrival

– Now unemployed and seeking federal services and language training to make use of their skills and education

Source: Focus groups with immigrant service agencies through Intergovernmental

Relations Group of the Toronto Region Immigrant Employment Council

C. What are the policy

implications?

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1. Learn from past recessions

In 1981, recent immigrant employment rates were close to Canadian-born. Two periods of recession reduced immigrant employment and they never recovered.– 1980s: Recent immigrants’ employment rate did not recover

before the 1990s recession hit. Their unemployment rate never returned to pre-recession level.

– 1990s: Recent immigrants’ employment rate continued to decline and their unemployment rate continued to rise, while labour market outcomes for Canadian-born workers improved.

In previous recessions recent immigrants were more affected by job loss than Canadian-born workers, contributing to a widening of employment rate and unemployment rate gaps.

We need to ensure immigrants can recover this time and that the gap does not widen.

32

Past recessions: employment

ratesEmployment Rates for Recent Immigrants and Canadian-born (15-64),

1981-2006

0

10

20

30

40

50

60

70

80

1981 1986 1991 1996 2001 2006

Em

plo

ym

en

t ra

te (

%)

Canadian-born Recent Immigrants

Source: Census 1981 to 2006. From HRSDC presentation at Metropolis conference

2010.

33

Past recessions: unemployment

ratesUnemployment Rates for Recent Immigrants and

Canadian-born (15-64), 1981-2006

0

2

4

6

8

10

12

14

16

18

20

1981 1986 1991 1996 2001 2006

Pe

rce

nta

ge

(%

)

Canadian-born Recent Immigrants

Source: Census 1981-2006. From HRSDC presentation at Metropolis conference 2010.

34

2. Unpack the data

We require more study of the impact of the recession on immigrants to understand the interventions that are needed.

We need flexible national programs that are responsive to real differences.

– This requires “unpacking the data” to see differences in impact based on region, sector, length of time in Canada, etc.

We need dialogue with immigrants and the agencies that serve them to put a human face to the numbers, charts and graphs.

35

3. Grow the labour force

Current recovery prospects appear fairly positive for Canada.– A return to employment growth was seen in just a few

countries in late 2009, including Canada, Australia, Poland, Israel and the United Kingdom.

As Canada’s economy improves, there will be a huge need for labour.– The immigrant population is a labour force already in Canada.

With some investment, those harmed by the recession can contribute to the economy as it grows.– With language skills, etc. immigrants can contribute to the

growth.

– Without services, they will not fare well and we will not benefit from their potential.

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…grow the labour force

A relatively rapid bounce back to pre-recession employment levels and unemployment rates is anticipated in 3-4 years, in part because slowing labour force growth will support declining unemployment rates.

With slowing growth, Canada will likely return relatively quickly to tight labour markets. We need the skills and abilities of every worker.

We must maximize participation and productivity in an environment where economic growth will face demographic constraints.

Education and skills of recent immigrants must be fully utilized. Canada can not afford to waste this potential.

37

4. Address barriers to labour

market integration

Immigrants and employers most frequently cite the following barriers to labour market:

– Lack of official language skills

– Transferability of foreign credentials

– Lack of Canadian work experience

Employers cite language barriers more frequently – number one issue for them.

38

…barriers

Immigrant and employer views on obstacles to employment

Immigrant job seekers

Managers expecting to hire

% of immigrants reporting problems in finding employment/ % of managers expecting problems hiring foreign-trained workers

70% 72%

Most commonly cited problems

Lack of Canadian work experience 26% 46% Transferability of foreign credentials 24% 52% Lack of official language skills 22% 66%

Source: Presentation by HRSDC at Metropolis conference 2010. Immigrant job seeker data from Statistics Canada Longitudinal Survey of Immigrants to Canada, Catalogue no.89-611-XIE; Managers data from Canadian Labour and Business Centre’s Viewpoints 2002 Survey.

39

Language makes a difference

Research suggests that, if official language abilities are controlled for, returns to education are similar for immigrants and Canadian-born.

Source: Ana Ferrer, David A. Green, W. Craig Riddell, 2008, Literacy and

the Labour Market: Cognitive Skills and Immigrant Earnings.

Immigrants who went into manufacturing did not require language upgrading so did not access services. Now many are citizens and no longer eligible for federally funded language training.

40

Other factors make a difference

Other interventions can help but are not widely available.

– Canadian top-ups (internships, bridge training) reverse discounting and lead to success.

– Social capital : social and professional networks (e.g. mentoring) enhance labour market integration.

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5. Invest in programs &

services

Time to invest in language training, upgrading and other programmatic interventions to:

– prevent recession “scarring” and deskilling of immigrants

– ensure skilled labour force is ready for the recovery

However serious barriers prevent immigrants harmed by the recession from gaining access to programs and services.

42

EI benefits

Because of changes in EI (more stringent labour attachment requirements), it is more difficult for unemployed people and particularly immigrants to qualify for benefits.

– Part time, seasonal, non-standard work = less labour market attachment.

Women are less likely to qualify than men.

– More part time work and maternity leaves.

Yet access to most training dollars and programs dependent on EI eligibility

43

EI benefits

Source: Keith Banting, Queen’s University, 2010.

44

EI in Ontario

The Employment Insurance legislation has been adjusted in a way that creates geographic disparities.

– Unemployed persons in Ontario are less likely to get benefits than other parts of the country.

45

EI across Canada

Source: Keith Banting, Queen’s University, 2010.

46

Social assistance & unemployment

In 2009, unemployment went up in Ontario but social assistance stayed down.

Source: Keith Banting, Queen’s University, 2010.

47

GTA social assistance

Although numbers, rate of circulation and length of time in receipt of welfare are up modestly, GTA municipalities report no disproportionate increase in welfare rates for immigrants vs. non-immigrants.

In Toronto, immigrants here three years+ make up the same portion of new cases as Canadian born; immigrants less than 3 years in Canada comprise only half the proportion of new Canadian born cases.

Reasons could include:

– Stigma

– Sponsorship agreements

– Lack of awareness

– Restrictive provisions regarding assets

Source: Greater Toronto Area municipalities.

48

Lack of eligibility for existing

programs

If unemployed but no significant labour force attachment, ineligible for EI or EI supported training (disproportionate impact on Ontario).

If on EI, cannot continue to receive benefits while in full time language training.

LMA training funds in Ontario not directed to immigrants as target group: definition of underemployment is quantitative, not qualitative

If citizen (3 years+), ineligible for federal programs and services, including LINC.

49

…Lack of eligibility

LINC provides no income support, so many take survival jobs to support their families and have no time to take language training.

Welfare workers can approve training (including language) but applicants need to strip all assets to be eligible for social assistance.

Other training programs provide no income support, child care or transportation allowances, so difficult to access.

New loan program in Ontario for bridge training covers tuition and supplies only.

D. Recommendations

51

RecommendationsData

1. Conduct more in-depth analysis on the impact of the recession on immigrants.

2. Analyse data by province, city, sector, length of time in Canada, gender, and education level in order to target programs to needs.

3. Do investigations on the ground with immigrant agencies to see real-life impact of recession on immigrants.

52

RecommendationsAccess to programs & services

4. Determine eligibility for federal settlement and language programs by need, not citizenship status.

5. Expand the definition of “underemployment” for program eligibility to include the mismatch between qualifications and employment.

6. Expand bridge training programs, internship and mentoring programs with employer supports.

53

RecommendationsIncome and supports

7. Provide income support/training allowances to immigrants for language training, bridge training, and other training opportunities.

8. Provide child care and transportation support/allowances to immigrants participating in language training, bridge training, and other training opportunities.

9. Continue EI and social assistance benefits while immigrants are participating in language training, bridge training, and other training opportunities.

10.Expand loan program for immigrants to access training.

54

CONCLUSION

We need to focus on strategic investments in people.

Investing in skilled immigrants’ human capital, social capital, and access to services now will prevent long term scarring and yield positive results for the recovery and beyond.