Saturday, April 16, 2011

Canada needs more Skilled Immigrants

The average Canadian in 2004 was 39.7; that makes Canada one of the oldest nations on earth. However bad things are now things promise to get a lot worse. The percentage of Canadians over 65 is set to go from 14.7 now to 27.6 in 2050. If the situation was ever allowed to get this bad, the economy would at best be stagnate, the federal government would surely be in deficit, and virtually every public entitlement program would be under enormous pressure or would have already collapsed. Most notably our health care system would be in serious trouble. Indeed as it stands now "People age 65 and older accounted for 13.2% of the Canadian population but consumed an estimated 44% of provincial and territorial government health care spending in 2005."

The problem is this.

In 2005, per capita health care spending was found to be highest at the beginning and at the end of life but, in general, to increase exponentially with age. While 65- to 74-year- olds consumed $6000 per capita, 75- to 84-year-olds consumed $11 000 per capita, and 85-year-olds (and those older) consumed $21 000 per capita, on average. In comparison, per capita health care spending among those age 1 to 65 was approximately $1700.[While 65- to 74-year- olds consumed $6000 per capita, 75- to 84-year-olds consumed $11 000 per capita, and 85-year-olds (and those older) consumed $21 000 per capita, on average. In comparison, per capita health care spending among those age 1 to 65 was approximately $1700.

This problem is not going to go away. Even if today's 60 is tomorrow's 70, we all die and most deaths are preceded by some kind of serious illness. As a critical mass of people reach whatever is the average life expectancy, they will cost the system more -- a lot more.

The notion that this problem can be addressed by encouraging Canadians to have more kids is unrealistic. Currently Canada has the 144 highest fertility rate and our birth rate is 190th in the world.
What goes for Canada goes for the rest of the Western world. There is not one Western nation with a fertility rate above the replacement rate yet alone one with a fertility rate high enough to withstand the aforementioned increase in the number of seniors as percentage of the total population.

To think that Canada has a chance to nearly double its current fertility rate of 1.6 -- and that is what it would take -- is pie in the sky nonsense. Moreover, far from making things better a massive baby boom would only increase an already mushrooming dependency rate for a good number of years. There is something perverse about wanting Canada to become a country of the very old and very young supported by taxes on a rapidly shrinking working population.

Canada has no option but to continue with a high rate of immigration.

Immigration is allowing us to make some headway. 2001 study found that based on 1996 census if Canada did not allow any immigrants, then the number of seniors as percentage of the population in 2050 would be 29. 8. If on the other hand Canada let in 225,000 annually, then that number would drop to 25.4. Finally, if Canada let in 450,000 annually that number would drop further still to 22.9.

That is the good news. The bad news is that Canada's immigration system badly needs to be reformed and for reform to mean anything Ottawa needs to reestablish that immigration is a federal issue. Indeed, what is the point of reworking the points system, for example, if Gordon Campbell and his ilk are working with big business to set up a rival system in which restaurant hostess is a skilled position?

Family reunification is a great place to start. There is no reason why an immigrant should be able to bring in anyone other than his spouse and dependents. After all, if the main point of a high rate of immigration is to lessen the effects of an aging population, what sense does it make to allow immigrants to sponsor their parents and grandparents?

Family reunification is part of a larger problem, viz., the ratio of skilled principle applicants as percentage of the over number of immigrants to Canada is way too small. Currently less than one in 5 immigrants is a skilled principle applicant. And however much I am loath to admit it, the Mark Steyn's of the world are right about one thing. Allowing someone to immigrant to Canada has a huge potential cost associated with it. This is especially so with regard to any other category of immigrant other the skilled principle applicants. After all, it is only skilled principle applicants that are earning anywhere close to what their Canadian peers are earning and skilled principle applicants are the only category of immigrants that are working in numbers that even approach the Canadian average.

"At 26 weeks after their arrival, 50% of all immigrants aged 25 to 44 were employed. This was 30 percentage points below the employment rate of about 80% among all individuals aged 25 to 44 in the Canadian population. ... At 52 weeks after arrival, the employment rate among prime working-age immigrants was 58%. This narrowed the gap to 23 percentage points. At 104 weeks, or two years after arrival, the employment rate among prime working-age immigrants was 63%, 18 percentage points below the national rate of 81%. ... Immigrants admitted as principal applicants in the skilled worker category had an even better record for employment. At 26 weeks after arrival, the gap in the employment rate between them and the Canadian population was 20 percentage points. By 52 weeks, this had narrowed to 12 points, and by two years, it was down to 8 points."

If you tease out the numbers, 55% of non principal skilled applicants in the 25 to 44 age group are working after 2 years! Canada needs to do a better job of ensuring that immigrants are able to succeed and while some bleeding hearts will no doubt claim that a complete turn around is possible, an approach that is far more likely to bare fruit is eliminating or greatly limiting those categories of immigrants that are not likely to succeed economically. To say that Canada needs immigrants is only half right. We need young well educated immigrants who are proficient in English. Indeed, we need a lot more than what we are allowing in now. We do not, however, need their parents and grandparents. We also do not need refugees. Most of all what Canada does not need is cheap unskilled guest workers.

Given Jason Kenney's stated desire to avoid “the kind of ethnic enclaves or parallel communities that exist in some European countries” and Mark Steyn's rantings about second generation Islamic exterminism in Europe you would think that Kenney and Steyn would reel back before the subject of guest workers like vampires before garlic. Instead, Steyn's musings reduce to an infantile and bigoted ethnic essentialism and Kenney seems hell bent on allowing more guest works than Germany did in the 1960s and 1970s.

Indeed, whereas the typical guest worker was once an American transferred to a branch office in Canada, the fastest growing category of guest worker is now the unskilled type with poor language skills. Under the Conservatives, Canada has allowed in some two hundred thousand plus unskilled workers a year. In other words, the average Canadian tax payer now pays through the noise to have cheap labour sent in from other countries for the sole purpose of cutting his wages. Forget Conservative talk about such provincial programs bringing in much needed skilled workers, this was the kind of positions Alberta was hoping to fill through its guest worker programs this past summer: Front desk clerk, short order cook, baker, maid, assembly line worker, server, buser, bellhop, valet, and cafeteria worker, laundry attendant, pet groomer, general labourer, and hair dresser. All that is required of such would be immigrants is that they score 4 or 24 on the language assessment. In other words, they can be functionally illiterate and still get it in.

Pace Mark Steyn, Integrating immigrants is really quite simple. If you bring in young well educated immigrants that are fluent in English, they will integrate. It will not matter a lick what their background, religion or skin colour is. On the other hand, if you bring in non English speaking uneducated immigrants to clean toilets and serve donuts at Tim Hortons, you have recipe for what happened in Europe, viz, poor race relations, xenophobia and illegal immigration. It is really that clear cut and Kenney should know this. Every expert on immigration does.

It takes a great deal of chutzpah to Kenney to talk about wanting to avoid “the kind of ethnic enclaves or parallel communities that exist in some European countries” and then go about encouraging the very thing that led to the creation of these communities in Europe, viz., importing gobs of unskilled guest labour who are socially, economically and legally marginalized.

In addition to letting in more skilled immigrants and less of everyone else, Canada needs to refine what it means to be skilled applicant.

The point system is a mess. It is weighted, accidentally I am sure, in such a way as to favour older applicants over younger ones. A premium is placed on experience, being married is advantageous and age is not penalized much at all. For example, a 49 year old is given the same number of points for age as a 21 year old! Not only is all this is completely at odds with the stated aim of using immigration to mediate some of the stresses of having a low birth rate, a shrinking supply of labour and a graying population, the very kind of skilled worker most likely to fail, viz., older workers is the one most likely to qualify.

Indeed, while everyone agrees that Canada needs to be a better job of recognizing foreign credentials and that most experts say Canada should start giving immigrants points for getting their credentials recognzied ahead of time like Australia does, what has gotten less attention is just how hard it is establish oneself in a particular field without any contacts in that field and work contacts are what many new immigrants lack. As various studies have shown, for immigrants outside of the Western world, work experience counts for virtually nothing as at all. For this reason alone, Canada needs to redo its point system such that it looks to attract younger skilled workers who are not at such a disadvantage contact wise as their peers.

Above all else though Canada need put more of an emphasis on language proficiency. After all, although Jason Kenney may let in hundreds of thousands of unskilled guest workers with little or no English, he is right to say that language proficiency is best predictor of economic success.

It should be noted that by language proficiency I mean ones ability to converse in either French or English. Currently, moderate proficiency across the board in both English and French is amounts to the same thing high proficiency in one! This is akin to thinking an average switch hitter is the equal to all star who bats only right handed.

All that being said, in order to get at appreciation for some of the short comings of the current points system consider this. Under the current formula, a single 26 year old who has just completed a PHD in Canada, and who speaks perfect English, but who lacks relevant work experience and is not proficient in French would likely not qualify. Indeed, assuming no family ties and no relevant work experience, they would score 56 out of 100. In other words, if they were not able to quickly secure a job in one of the relevant fields, they would be heading back to their country of origin in short order. Even, if that same applicant spoke perfect French and English they would still not qualify. They would score 64 out of 100.

By contrast a 49 year old who has never set foot in the country and speaks no French but has a BA, 3 years experience, moderate English skills a spouse with a 1 year diploma, and a cousin in distant Canadian city would score 67! This is absurd.


Wakefield Tolbert said...

More immigrants?

No, hombre.

You need to start sqeezing out more bambinos of your own. Just like we Yanks do. You can't continue to import labor for the jobs you won't do, because in part of the children you never had. Ditto for us here in the States.

Anonymous said...

Wasn't the war on smoking supposed to save big money in health care costs? We would all be healthier and live longer. Seems that "live longer" thing may cost us more in health care than smoking ever did. Guess what folks! We all die! Whether from smoking related cancer or emphysema at age 50, after a year or two of taxpayer funded health care. Or from “old age” at 90, after decades of taxpayer funded heath care.

bcferrei said...

The claim that if you just import immigrants who speak good English, and have a high skill level, they will integrate, is quite frankly crap. Most Islamic home-grown terrorists have decent English (many are excellent and very skilled communicators, clearly) and are often highly educated in technical degrees.

Second, don't you think it is a form of mercantilist colonialism to plunder the developing world of its doctors and engineers, so that fat, rich, white Canadians can continue to enjoy their lavish Trudeau-era lifestyles on the backs of that imported skilled labour?