Hiring Lower-Skilled Workers | Business Roundtable

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The State of ImmigrationHiring Lower-Skilled Workers

A primary factor that propels immigrants to enter America illegally is the opportunity to work in full-year jobs at salaries higher than in their home countries. They enter and work illegally because the U.S. immigration system has no visa category for year-round jobs in hotels, restaurants or construction. Only foreign nationals interested in seasonal positions can work lawfully at lower-skilled jobs. The bureaucratic H-2A seasonal visa for agriculture and the equally bureaucratic and numerically limited H-2B category for nonagricultural work, such as in summer resorts, are the only legal alternatives for foreign nationals to work at lower-skilled jobs in the United States.

A primary factor that propels immigrants to enter America illegally is the opportunity to work in full-year jobs at salaries higher than in their home countries. They enter and work illegally because the U.S. immigration system has no visa category for year-round jobs in hotels, restaurants or construction. Only foreign nationals interested in seasonal positions can work lawfully at lower-skilled jobs. The bureaucratic H-2A seasonal visa for agriculture and the equally bureaucratic and numerically limited H-2B category for nonagricultural work, such as in summer resorts, are the only legal alternatives for foreign nationals to work at lower-skilled jobs in the United States.

Singapore
In place of bureaucratic rules, Singapore has adopted a foreign worker levy as a “pricing mechanism to regulate the number of lower-skilled foreign workers in Singapore.”111 The levy is different for various sectors. For example, if foreign workers represent 25 to 50 percent of a manufacturing company’s workforce, then the company pays a monthly fee of 470 Singapore dollars (about $375) for every unskilled foreign worker it employs.

Restrictions exist on the percentage of foreign lower-skilled workers a company may employ, but the rules still allow employers to hire a significant share of such workers. For example, in construction, 87.5 percent of the workforce can be foreign, while the level is 60 percent in manufacturing and 40 percent in services.112 Still, relatively few citizens of Singapore seek to work in construction, which means the quotas can be an issue for companies. The quotas and levies generally do not affect high-skilled workers. “If an employee is paid more than 3300 [Singapore dollars] a month (about $2,640) and meets education and experience requirements, then they are eligible to apply for an Employment Pass,” which is not subject to quotas.113

Canada
Every province operates an immigration program in Canada, which helps regions with different needs meet demands for labor. For example, while most of Provincial Nominee Programs are geared to high-skilled professionals, lower-skilled workers, such as meat packers admitted to work in Manitoba under the federal Low Skilled (now known as Low Wage) Temporary Foreign Worker Program, have been able to quickly transition to permanent residence under the provincial program. “After six months they can file for permanent residence under the Manitoba Provincial Nominee Program and get it,” according to attorney Peter Rekai. The country also admits agricultural and nonagricultural workers on a seasonal basis subject to standardized and regulated employment contracts.

“While there are some avenues for low-skilled (or semi-skilled) workers to transition toward permanent residence, the process is not quick and by no means easy,” said Audrea Golding, an attorney with Fragomen Worldwide in Canada.120 While concurring with Rekai on the possibility of a foreign national gaining permanent residence in Manitoba, she points out that meeting the government’s qualifications for individual professions and work experience can be problematic. Seasonal workers need to establish 12 months of work experience before becoming eligible for a Provincial Nominee Program. Still, to place this in context, in the United States, seasonal workers on H-2A or H-2B visas are ineligible to transition to permanent residence.

Canada allows full-time caregivers to transition to permanent residence. In contrast, the United States generally does not allow employers to sponsor foreign caregivers on either temporary visas or for permanent residence, whether for the elderly, for children or for health care purposes.

Despite these programs, “new rules in the past 12 months have narrowed the ability of employers in Canada to hire lower-skilled workers,” said Rekai.121 The Canadian government has mandated that by July 1, 2016, no employer can have more than 10 percent of its labor force at any one site be lower-skilled foreign workers on temporary visas. Moreover, employers must now pay a $1,000 fee for each foreign worker and continue to advertise prior to hiring a “low-wage” worker.

Australia
Australia fills many of its lower-skilled work needs through Working Holiday visas. The country issued 258,250 such visas in 2012.122 These visas allow many young people from different countries to enter Australia for 6 to 12 months and work at jobs in restaurants, hotels and elsewhere. Jobs not considered highly skilled may require a labor market test to use a 457 visa in Australia.

Germany, France, the U.K. and Switzerland
In comparing policies on lower-skilled workers, one must start with the fact that Germany, France, the U.K. and Switzerland permit any citizen of the EU to enter these countries and work at lower-skilled jobs without going through any immigration process at all. The 2014 referendum in Switzerland may change aspects of the policy in that country, but the extent of the change remains unclear, and there are efforts to overturn the referendum or at least limit its impact. No provisions exist in Swiss law to grant work permit approvals to newly arriving non-EU nationals to work at lower-skilled jobs in Switzerland.

Since EU nationals do not require a work permit to be employed in Germany, many potential workers come to the country to seek lower-skilled positions, including short-term work. Access to the entire EU for labor means temporary visas for lower-skilled labor outside the EU generally are not necessary, according to Lucy Jacobs of Palladium Mobility Group. Bulgarians, for example, come to Germany to pick cherries on a seasonal basis, the type of jobs most Germans are not interested in filling. In addition, seasonal visas are available for up to six months in agriculture, catering and the hotel industry with the approval of the German labor office.

In the U.K. there is no visa category for lower-skilled jobs. While a Tier 3 category exists for seasonal labor, such as picking crops, it has never been implemented. The sentiment in the U.K. has been that since nearly anyone within the EU could enter the U.K. and work, there should be sufficient labor to meet the demand. Attorney Rose Carey believes access to the EU workforce has been sufficient to meet lower-skilled labor needs in the U.K.123

As an EU member, France’s labor market is also open to the approximately 500 million EU citizens who can enter the country to work without any immigration filings. As with Germany and the U.K., this helps fill some of the demand for lower-skilled workers. Still, attorneys believe a majority of individuals who work in France as nannies and some other jobs are in the country unlawfully and do not come from EU member states. One reason for this is that it is considered “almost impossible” to gain approval for a “low-skill” full-year worker, such as a hotel worker, crane operator or even construction foreman, due to the labor market testing required for such jobs. However, employers in France can gain approval to hire seasonal workers in agriculture and tourist resorts. The work permits for seasonal workers allow entry for multiple years and are considered to serve their purpose well.124

Hong Kong
Hiring lower-skilled foreign nationals to work in Hong Kong is possible but not simple. “There is a lot of red tape,” according to Magdalene Tennant with Fragomen Worldwide in Hong Kong. “It is nowhere near as easy to hire low-skilled workers as high-skilled workers.”125 Under the Imported Workers’ Scheme, the process to hire and bring construction workers or mechanics into Hong Kong is time consuming and involves filings with the Labor Department and local advertising, followed by applying for the visa. “It is difficult,” said Hong Kong attorney Christopher Hooley.126

Despite these challenges, a Foreign Domestic Helpers Scheme and a Training Scheme allows persons who qualify to work legally in Hong Kong. The Working Holiday Scheme allows young people ages 18–30 from certain countries to work for up to a year in Hong Kong, helping to fill some labor market niches. Moreover, in response to concerns from the business community and the aging population in Hong Kong, China Daily reported: “To alleviate the labor pressure, the administration said it will permit those elderly service centers which participated in the ‘Enhanced Brought Place Scheme’ to recruit imported labor through the SLS (Supplementary Labor Scheme). The government has not permitted the above elderly care centers to hire imported labor in the past.”127

Japan
Japan does not possess a category for lower-skilled workers, even for seasonal agricultural work. An employer can hire someone only on a “trainee” visa and allow the foreign national to work at lower-skilled jobs under the premise that the foreign national is being trained to work in agriculture, construction, etc. Individual employers typically use only one or two such visas a year. Japanese Prime Minister Shinzo Abe has announced the government will make it easier to bring in foreign construction workers to help with the rebuilding that continues in parts of Japan following the devastating tsunami. This may also be helpful for construction work connected to Tokyo hosting the Summer Olympics in 2020.


111. Ministry of Manpower, Singapore government.
112. S Passes are subject to separate (lower) subquotas in different sectors. Work permits and S Passes are subject to quotas.
113. Interview with Christina Karl.
120. Interview with Audrea Golding.
121. Interview with Peter Rekai.
122. Organisation for Economic Co-operation and Development (2014), International Migration Outlook 2014.
123. Interview with Rose Carey.
124. Interviews with Karl Waheed and Raphael Apelbaum.
125. Interview with Magdalene Tennant.
126. Interview with Christopher Hooley.
127. Oswald Chan (January 10, 2014), “Take This Job and Shove It,” China Daily.

Score Breakdown by Country on Hiring Lower-Skilled Workers

Germany
Germany 3.5

Germany’s membership in the EU provides access to 500 million people who can work without any immigration processing and provides much of its lower-skilled labor needs. Seasonal visas are also available for up to six months in agriculture, catering and the hotel industry. There are no year-round visas for non-EU lower-skilled workers.

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Australia
Australia 3.5

Working Holiday visas for young adults and 457 visas allow Australian employers to fill gaps in the labor market. However, 457 visas for lower-skilled workers are subject to labor market testing.

View Australia Profile
Singapore
Singapore 4.0

Singapore makes it possible for foreign nationals to hold a variety of lower-skilled jobs. In place of bureaucratic rules, the government has established a “foreign worker levy” as a “pricing mechanism to regulate the number of foreign workers in Singapore” and also maintains quotas, which are fairly generous, on the number of lower-skilled foreign workers companies can employ.

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United Kingdom
United Kingdom 3.5

The U.K.’s membership in the EU provides access to 500 million people who can work without any immigration processing and provides much of its lower-skilled labor needs. In practice, there are no temporary visas for non-EU lower-skilled workers, although Tier 5 allows access to interns.

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France
France 3.5

France’s membership in the EU provides access to 500 million people who can work without any immigration processing and provides much of its lower-skilled labor needs. No year-round visas are available for non-EU lower-skilled workers, but seasonal visas are available.

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Hong Kong
Hong Kong 3.0

Hiring lower-skilled foreign workers is possible in Hong Kong but is more difficult than hiring high-skilled workers due to additional bureaucratic requirements, including local advertising. In the past year, the government has opened the door to allow elder care centers to bring in foreign workers to care for Hong Kong’s aging population.

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Switzerland
Switzerland 3.5

Switzerland’s agreement with the EU provides access to 500 million people who can work without any immigration processing and provides much of its lower-skilled labor needs. In practice, no work permits are granted for lower-skilled work by non-EU nationals entering the country.

View Switzerland Profile
Canada
Canada 3.0

Canada has retreated from its more employer-friendly policies on lower-skilled workers, adding large fees and limits (10 percent) on the number of foreign “low-wage” workers per company worksite. Even with the new restrictions, Canada remains far more open to lower-skilled workers than the United States, including by giving caregivers the chance to gain temporary and permanent status. The Provincial Nominee Program, which allows provinces with different needs to sponsor lower-skilled workers (today in more limited numbers), is a model the United States might examine. 

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United States
United States 1.5

No temporary visa category exists for full-year jobs for lower-skilled workers. The seasonal work visa for agriculture (H-2A) is considered bureaucratic, and the seasonal visa for nonagricultural work (H-2B) is considered bureaucratic and carries a low annual quota.

View United States Profile

About the Report

Business Roundtable selected the evaluated countries based on five criteria:

1. Worldwide university rankings;
2. Per-capita income;
3. Gross domestic product growth rate;
4. Net migration rate; and
5. Research and development investment.

After comparing each advanced economy relative to the five criteria, the top 10 countries (including the United States) were selected for the study: Australia, Canada, France, Germany, Hong Kong, Japan, Singapore, Switzerland and the United Kingdom (U.K.). Not coincidentally, these are the countries with which the United States competes most for foreign talent, particularly in science and technology fields.

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