The Equation of Immigration and Productivity

The Economists are arguing on the issue of “falling productivity” of the nation. Parallel to this the “immigration policy” needs to be looked into. There is a direct correlation between the two as immigrants coming to the nation throw a great impact on the job markets and various peripheries of the economic sector.

A report published by Organisation for Economic Cooperation and development (OECD) suggest that there is no dependence of country’s productivity on immigrants.

Some other report suggests that the gap between U.S-Canada productivity has increased basically due to immigration.

In the decades of 70s the gap between the earnings of a Canadian native and immigrant was quite low. Now, even if the immigrants are moderately educated the gap has widened up. In fact a repost shows that almost 50% of the immigrants coming to Canada are overqualified and are not able to get a suitable job.

According to Benjamin Tal, Deputy Chief Economist at Canadian Imperial Bank of Commerce the gap between the employment and wages earned by these immigrants cost the Canadian economy almost $20 billion in the last few years. He also reports that more almost 20% of the working males leave the country within a year of them coming to the nation.

The question of the hour is the contribution of aging population to the country. As population grows older their productivity reduces due to their losing capacity of work. Hence, it is important to consider the productivity of immigrants coming here.

To solve this problem with a “short term approach” would not be the right thing. Temporary jobs and unskilled workers would be more of loss productivity than any gain, in the long run. These unskilled workers cannot change with the requirement of the job market. They remain stagnant with a few skills they learn.

Incidentally, the FSW program identifies 29 occupations. A major part of it is based on construction industry. It would be a tough time for the workers when the nation goes through a slow housing phase, as it would leave them redundant.

Job market should have opportunities to sustain the labors and workers coming from outside. This would lead to a growing productivity of the nation and the immigrants both. It is high time when the masters of job market shed off short term approach and opt for long term sustenance.