Changing labor market as a potential causal factor in declining immigrant outcomes in Canada Research Paper

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Introduction

A critical analysis of the research on the downward trend of employment success of immigrants in Canada paints a picture that suggests that it is in a relatively elementary shape. A perspective analysis provides a tactical description of the trend across various periods within a restricted amount of time. This analysis shows that the difference arises in the specific criteria adopted in the definition of what is in decline.

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The analysis provides differing accounts of the effect of the resultant decline as well as the implications of such reduction. Among the studies that have been done (Frenette and Morissette, 2003) has claimed its place as a reliable generalization of this situation.

It indicates that the period since the 1970s, even as it is earmarked for the characteristic increases in the levels of educational among immigrants, and taking keen interest in the significant maturity of the account of business-cycle fluctuations that was experienced in the labour demand, the period still had to put up with a decline of up to 20 percent in the minimum general entry-level gains that were received by newly-arriving immigrants, regardless of considerations such as gender.

The trend, therefore, suggests a continuous decline in rates of immigrants hired. This state of affairs prevailed up to the early 1990s when signs of a positive trend were seen in the new arrivals.

Frennete and Morissette (2003), suggest that the problem can be narrowed down to seven statistical irregularities that characterize the labor market processes and form a basis for the construction of a tentative answer to this problem from the perspective of the transition to the knowledge economy :

  1. The characteristically conspicuous reduction in the levels of earnings received by new labor market entrants;
  2. Lack of consistency in the origins of emigrants;
  3. An increased initiative by immigrants in increasing their educational levels
  4. Reduced value of education due to the characteristic increase in educated immigrants
  5. Lack of emigrant access to prestigious high end professional occupations due to the lack of influence.
  6. Low levels of foreign experience among the immigrants
  7. General competition based labor market imbalance

In a strict sense the relevance an influence of these explanatory factors will vary, depending on factors such as the period in consideration. The scope of labor market processes related concerns in the immigrant employment concern is fairly thin, and the extent of relevance of each factor differs in both extent and length.

However, the majority of them point toward the labor market processes an aspect that has very little supporting evidence. A sense of ambiguity exists specifically with regard to statistical reports concerning the market process. For instance, the role of declining marginal returns received by immigrants has generated a diverse list of explanations with each explanation targeting the different circumstance.

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The even more ambiguous aspect here is the market process that specifically influences the underlying trend. This lack of fit cuts across the seven factors in varying extents ad therefore forms the object of our analysis and interrogation in this paper.

The paper seeks to know whether the Canadian labor market processes related to the transition to the knowledge economy have underpinned the decline in immigrant employment success (Worswick, 2004).

Argument analysis. Labor Market Niches

It is common ground that the trend displayed by immigrant employment is one that heads towards specific occupations, enclaves, and work settings. As it were some circumstances have worked to provide an advantage in as far as origin is concerned, for instance, the allocation of engineering jobs towards Chinese.

Even so this presents in its own level a degree of disadvantage, especially when racial and ethnic considerations take the center stage In the distribution and allocation of manual labor, service jobs, or shift work. More often than not these jobs do not fall under the umbrella of unions and therefore, they do not receive the benefits that accrue to unionized employments.

Reitz and Breton (1994), expresses this position in light of the little interest given to these jobs by unions. He acknowledges that Canadian immigrants receive little attention in as far as unionization of their jobs is concerned, despite the fact that over time they have continuously acquired knowledge to allow them to gain access to these jobs.

Consequently any racial concerns have been reduced leaving the employment process to market processes. Even more compelling value-added to the jobs due to unionization is marginally little as compared to those without union representation.

The big question to be asked here is whether labor market concentrations contribute in any extent to disadvantage the place of immigrants.

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It also begs the question as to whether such cycle operates to perpetuate this state of affairs over time, thereby constituting in a strict sense a hypothetical workplace ‘ghetto,’ It also creates a need to understand whether these market-based factors represent opportunities to avoid discrimination as well as motivate economic well-being (Wanner, 1998).

The majority of positive results are attached to individual entrepreneurial engagements that create self-employment. Many immigrants find it more productive to own small businesses, especially within societal groupings that allow for gatherings of groups of people with a common good as well as secure the interests of members of their group.

Research develops a picture of immigrant employment in the light of impact of individual concentration of efforts toward the employment process setting aside the impact of ethnic concentration. The conclusions made vary in great degrees across groups; they propose an impression is that the relevance differs positively in some and negatively in others (Swidinsky & Swidinsky, 2002).

Proponents of this view suggested that although there is a case of high earning self-employed immigrants when their net earnings were finally weighed and compared to that immigrants in self-employment are compared with17their counterparts in paid employment who are matched on relevant human capital characteristics, those who relied entirely on self-employment were tentatively found to receive a lesser income as compared to their employed counterparts

They go on to present an inference that points out that, to some extent, it has been the case that the evaluation of self-employment is quite subjective. As it were the levels of fulfillment and job satisfaction were found to be much higher the researchers conceive the idea on an environment which frowns at self-employment since it fosters a sense of isolation under the tagging of minorities (Sweetman, 2004).

The accumulation of a great number of immigrant and minority poverty who live within certain restricted neighborhoods creates a possible avenue for the motivation of negative effect of such as enclaves on employment opportunities with a specific interest in the lives of the working individuals who rise from such neighborhoods.

Regardless of the whether this affects the immigrants themselves in an outreached context, their children. This perpetrates the long-standing interest that was generated by the United States with regard to the role played by the racial divide in the market cycle.

Market scientists who have taken interest in this negative aspect show that its consequences are vividly present among Canadian cities. Some specific interest was generated towards the exception of some negative effects on which were seen to have minimal effect on young Blacks in Toronto and Montreal.

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The approach established that the general market has pushed the labor selection of skilled immigrants towards a human capital-based criteria that gives prominence to factors such as education, work experience, as well as proficiency in at least one of the official languages.

As it is the criteria is based on the presumption that justifies its self on the premise that this will increase employability (Stoffman, 2002). There exists strong proof of the effectiveness of this approach as is indicated by these research initiatives. The emphasis here is on the labor market value of proficiency in the knowledge in an official language.

Further analysis of the markets valuation of the immigrants credentials disclose that it seems to value those of Canadian born prospective employees more highly in contrast to those of immigrants.this approach has been reinforced by researches in other labor markets such as the US. Subsequently the proceeds of labor are less for immigrants.

In this context, proceeds are meant to refer to the payment available in the labor market the immigrant with additional credentials (Schaafsma & Sweetman, 2001). This imbalance affects returns due from both educational qualifications as well as work experience.

The specific interest given to higher educational qualifications among immigrants in sharp contrast to their qualifications remain highly disinterested as compared to the head start given to native-born prospective employees.

Education among immigrant’s, especially those who have gone through foreign schooling presents a statistical concern since up to two-thirds of them have a similar value amount of education as that of the native-born.

The market cycle analysis in consideration of the shift towards a knowledge economy has generated several theories to explain this situation. The first theory takes an independent approach claiming that the general quality of a foreign-acquired education is much lower than a Canadian based education.

In effect it is not entirely possible to transfer this foreign knowledge to the Canadian market situation. Further, evidence supports this proposition on the basis that the quantification of the general quality of education of the subject immigrant source country is closely and influentially associated with lower returns as compared to an education acquired in Canada.

The approach suggests that the junior status of the economies that provide this education affects the quality of such education a factor supported by migration in the first place.

Even so the market has accommodated immigrants by positively selecting them based on education with no specific regard to the economic status of their country of origin. Strictly speaking, academic excellence in the harsh academic environment shows a potential for further excellence in better conditions such as those presented by the Canadian market.

Therefore an approach that stems from the home country’s quality of education does not expressly explain the labor markets indifference responding to the immigrants reduced employment status even in the verge of the movement towards a knowledge economy. This brings in the second theory. It takes a rather subjective stand by suggesting that indeed the labor market does acknowledge the foreign credentials.

The problem lies however with Canadian employers and regulatory organizations that regulate and control the issuance of licenses to professions and entrepreneurs. There exists historical evidence supporting this claim. Over a decade ago an Ontario Task Force on Access to Trades and Professions conducted a research on this approach.

Their efforts were reinforced in a more recent attempt made by the Ontario Ministry of Training, Colleges and Universities. These analyses provided evidence for the presupposition that immigrants continued to embrace numerous daily difficulties that stem from these bureaucratical barriers (Ruddick, 2003).

Technically speaking, the existence of such barriers among these groups of people as well as among visible minorities, presents serious discriminatory concerns. In fact, the quality of foreign qualifications happens to be poorer among employers who show other evidence racial or other prejudice.

The impression made by this aspect has serious economic implications. The available evidence suggests that the actual economic loss value presented by these barriers in the labor market in Canada goes to the tune of up to $2 billion annually.

Further evidence, as was presented by Conference Board of Canada reinforces this point by suggesting a somewhat larger estimate. According to them the economic value of the opportunity loss associated to unrecognized learning in the labor market stands between $4.1 and $5.9 billion. They further suggest that among those affected more than two-thirds are estimated to be immigrants constitute.

These figures are sharply contrasted to the generally marginalized value attached to immigrant education. With specific regard to the reduced value of the amount of schooling as well as the effect of possessing specific credentials the impression on immigrants is much higher than among native-born the implication here is an offset of the notion attached to the devaluation of immigrant skills.

In equal measure the value of immigrant education in the market is substantially considered to be lower among immigrants as compared to that of Canadian born employees. In essence the employer is more receptive to the Canadian system of education than to the foreign education. Despite the fact that schooling is generally not recognized there are specific formal credentials that attract special relevance.

Like all other labor markets the Canadian labor market is ready to reward more for higher credential. The approach suggests that if the immigrants are given an opportunity to demonstrate the relevance of their skill they often succeed in proving applicability of their credentials into the labor market.

In the face of the shift of the labor market into the modern-day knowledge economy the methods used in the evaluation of the employee have an important bearing on the level of success of such an employee.

To understand the process it is important to have a background on the actual underlying question that goes to the question of the motivation behind educational relevance in the workforce and the connection of such education to the modern knowledge economy demands.

The most relevant approach would be one that takes the capital stand. This approach emphasizes the importance of educational qualification in the productivity and value of a worker. It justifies this view by claiming that this is the sole basis in which employers base the premium payable to such worker.

An empirical approach insists that education is merely a screening tool used by the employer in the identification of the most skilled among prospective employees. The approach takes an objective view that the most important consideration is not the occupation-related skill that is associated to in particular educational credential. More consideration is given to the general magnitude of different prospective employees.

Another hypothetical approach gives prominence to the status or prestige that is attached to educated workers the approach proposes that employers hire based on the level of education to fill management positions in a manner that ensures that position will command a considerable degree of respect from lower positions justified by the high qualifications that are required to acquire it.

The extent of relevance and applicability of the three hypotheses differs in degree to the roles played by labor market cycles in the knowledge economy in the success of immigrants in employment. From a human capital stand employers evaluate the skill level of a prospective immigrant employee as well as a native-born using a similar method.

It, therefore, suggests an equal platform for the access of employment opportunities for both in-born and immigrant applicants.

The screening hypothesis suggests a hierarchical approach that involves ranking applicants in a particular order, which gives the most qualified an added advantage at getting the employment despite the fact that they all meet the fundamental employment credentials this, however, has the effect of creating a disadvantage on the immigrant by giving the employer a justification to sideline those immigrants who meet the prerequisite skill requirements of a job.

However the levels of skill requirements and the modalities of recruitment differ substantially in as far as knowledge content of a field is concerned. The level of prominence given to credential assessment in different organizational employment practices differ from one field to another.

Therefore as importance is increased in knowledge within occupations the institutional mechanisms for the evaluation of qualifications change, the levels of information and education among immigrants is expected to change. Professional occupations have curved into an intrinsic bureaucracy of procedures that must be undertaken in the evaluation of credentials.

The inadvertent increase of the influence that relates to these occupations, especially in the Canadian labor market, has gradually increased. For instance, the levels of professional requirement in managerial positions are very high and as a consequence they attract an equally large premium.

In an equal measure the levels of education have experienced an upward trend with such increase being highest in science-based professions such as engineering health sciences education and social science fields. These have managed to create their own knowledge class that has to be met by every prospective employee.

The presumption that can be constructed therefore, is that there is a strong connection between the educational credentials and the levels of performance in these jobs. Professional, institutional setups that are used in the procurement of a skilled workforce have been adjusted to accommodate a refined mode of evaluating applicants to select the most suitable skilled professional.

The general trend in the science professions has been to codify the recruitment procedure a move that is sharply contrasted to that of social science-based professions such as social work and education. The professional bodies in the various professions also play a serious role in influencing the mode of relation with the customers.

The influence of the social dimension therefore operates to disadvantage the immigrant population since they possess an inadvertently strong social influence that makes it quite difficult to acknowledge the universality of the knowledge economy. They present very few chances for the immigrants to prove their relevance and ability to operate in the local environment alongside their academic qualifications.

The general turn towards discounting the immigrants credentials in the very professions within which the prevalent local criteria may be more likely to have substantial influence on the general objective professional standard. The knowledge economy has significant variations in levels of education that operate within the labor market, such as bachelor’s degree as well as higher post-graduate qualification.

These are said to influence the competitive potential of immigrants since market trends tend to favor the higher qualification. Even so it becomes quite complicated trying to predict the relative salience that come alongside the benefits that accrue to careful and calculated strategies in contrast to the disadvantages that come alongside an arbitrary bureaucratic procedure of recruitment (Pendakur & Pendakur, 1998).

Particular managerial occupations, especially those in knowledge-intensive industries are fundamentally categorized under the knowledge class due to the pertinent characteristic of the complexity in management effectiveness that is demanded in these fields.

Management positions that lucratively stand out as the highest levels within majority of knowledge-intensive industries such as the enterprise of manufacture, entrepreneurship and business services as well as finance, government, and the all too common health and educational sectors.

This is sharply held in contradistinction to the service industry in fields such as retail or wholesale trade as well as the personalized services industries (Preston et al., 2003).

The knowledge economy has pushed the knowledge-intensive industry from the primitive apprenticeship mode of training and acquiring employees to a sophisticated professional and education level based approach in managerial occupations.

Therefore it is quite obvious that the extent that recruitment in knowledge-based managerial positions runs parallel to that of the professional based positions. The impression, therefore, is that the knowledge economy offers equal opportunity across the divide in regard to all these positions.

This is however, not the case since managerial occupation recruitment procedures are more skewed towards non-educational qualifications such as, responsibility, leadership, and perspective. It is evident that educational training cannot assist the job seeker achieve these credentials. The level of education, therefore, has little influence on the chances of success of the immigrant.

The specific interest in management is generated by the fact that the field requires more skill than education in the sense that it is more of an art than a science. As it were the management skills among managers are less codified this makes the selection process much less bureaucratized if it is contrasted to other professions. In sectors such as health and education (Picot & Sweetman, 2005).

The recruitment of managers is more often than not based on the ranks that are created in the related professions, promotion is therefore basically on a perception of the individuals managerial ability is not quantified on terms that present exclusivity and this forms the sole even though nor the primary basis of professional advancement.

The authoritative approach that requires managers to exercise supervision over other workers may lead to the employment of individualized social criteria not necessarily related to managerial experience and or education.

This, therefore, means that the perceptions of the chances of success of immigrant prospective for managerial positions is greatly affected and influenced by social characteristics that may to a great extent be presumed to affect their credibility as authority figures.

Particular interest is generated by the minority immigrants who happen to fall within the smaller racial segmentations may be inadvertently presumed to fail in the establishment of a sense of command and managerial authority in the workplace. As a result, the market creates a ‘glass ceiling,’ similar to that associated by feminist concerns.

The employment and regard of these professional/managerial differences to the tune of factors such as skill assessment as well as skill discounting for immigrants presents a more than proportionate platform for the less prominent in as far as professional occupations are concerned in comparison to the ground that the more prominent in managerial occupations holds.

Generally speaking the employment of these considerations to a great extent suggests that outside the ‘knowledge class’ the influence of skill discounting forms a serious consideration in as far as immigrant employee success is concerned.

The educational criteria have been applied across the occupational divide. This has been done with little attention towards a detailed focus on credential assessment as has been the case within the majority of knowledge occupations. There have been vast attempts by market scientists to evaluate the connection between the immigrants experience and the levels of employment success in the Canadian labor market.

They have all come to a tentative conclusion that there is little or no connection between these factors and in fact the trend indicates a sense of irrelevance of such experience in the Canadian market (Reitz, 1990). The trend has often been criticized as discriminatory.

The motivation of this state of affairs has been greatly associated with the fact that it is quite difficult to evaluate the relevance of foreign training in the Canadian market. This in effect raises the all too common question of mobility of foreign expertise into the Canadian market. This can however only be generalized as being a variable factor just as is the case for the education acquired by the immigrant in their country of origin.

Conclusion

The above statistical analysis presents an argument analysis for the constituent factors that characterize the shift towards a knowledge economy in relation to the levels of success of the immigrant population. The existing research on the topic has gone into deep lengths of establishing the influence that underlies the various statistical patterns in the labor market as it responds to the change towards a knowledge economy.

The existing statistics give specified attention on the workplace-related aspect of the labor market and use this approach to construct an explanation of the pertinent concerns that face the modern-day labor market.

The role played by other non work-related factors of the labor market such as self-employment public policy as well as social capital assist in the construction of a vivid generalization of the actual market situation and status. Public policy and social programs, for instance, give specific interest and credit to program evaluation in the search for tentative answers.

The market reaction has come in the form of proposed policy programs that are directed at improving the employment chances of immigrants. These programs include the use of a central credential assessment service as well as bridging facilities that help in fine-tuning the existing knowledge of the immigrants.

The current contemporary trend of the labor market that has made a great impression on the status of immigrants in the general labour market. The trend toward reduced opportunities available to the general labor population alongside the overall inequality in the greater income has characteristically been motivated and influenced by the trend toward the knowledge economy.

Essentially the associated trends within the workplace environment that direct the market towards progressive factors such as workplace innovation, new human resources and management practices have taken the center stage in the immigrant debate.

The trend that has been shown by the Canadian labor market in response to the gradual shift towards a knowledge economy presents an appropriate case study for the global trend of the labor market. For instance the immigrant situation in the United States who with specific interest in those who originate from Canada present an equal statistical disclosure.

The general impression that has been created over time suggests that immigrants to the US become much more relevant to American labor market demands as compared to the alternative situation even with the great difference in educational standards.

This is the tentative bearing of the Canadian labor market as we know it today. The big question that motivates the need for further research on this topic arises in the fact that Canadian trends can be understood by making constructive comparisons of the market demands of this market to those of other groups such as the United States today.

The primary concern here is to provide the most complete and representative elucidation for continued negative shift of the immigrant employment trends within a limited time frame.

The explanation must at all costs explain with utmost clarity the role of changes played by the composition of immigrants with specific interest and regard to changes in the labor market processes in response to the change towards a knowledge economy. This paper forms one of such attempts (Frenette & Morisette, 2003).

References

Frenette, M. and Morisette, R. (2003). “Will they ever converge? Earnings of immigrant and Canadian-born workers over the last two decades.” Analytical Studies Branch Research Paper Series. Ottawa: Statistics Canada, catalogue no. 11F0019MIE – No. 215.

Pendakur, K. & Pendakur, R. (1998). “The Colour of Money: Earnings Differentials among Ethnic Groups in Canada,” Canadian Journal of Economics 31, 3: 518-48.

Picot, G. & Sweetman, A. (2005). “The Deteriorating Economic Welfare of Immigrants and Possible Causes: Update 2005.” Analytical Studies Branch research paper series. Ottawa: Statistics Canada, Business and Labor Market Analysis Division, catalogue no.11F0019MIE – No. 262

Preston, V., Lucia, L and Wang, S. (2003). “Immigrants’ Economic Status in Toronto: Stories of Triumph and Disappointment.” Pp. 192-262 in The World in a City, edited by Paul Anisef and Michael Lanphier, Toronto: University of Toronto Press.

Reitz, G and Breton, R. (1994). The Illusion of Difference: Realities of Ethnicity in Canada and the United States. Toronto: C.D. Howe Institute.

Reitz, J. (1990). “Ethnic concentrations in labour markets and their implications for ethnic inequality.” Pp. 135-95 in Ethnic Identity and Equality: Varieties of Experience in a Canadian City, edited by R. Breton, W.W. Isajiw, W.E. Kalbach, and J.G. Reitz. Toronto: University of Toronto Press.

Ruddick, E. (2003). “Immigrant Economic Performance: A New Paradigm in a Changing Labour Market,” Canadian Issues, Association for Canadian Studies, Canada: nd

Schaafsma, J. & Sweetman, A. (2001). “Immigrant earnings: age at immigration matters,” Canadian Journal of Economics 34, 4: 1066-1099. Statistics Canada. 2003. “Earnings of Canadians: Making a Living in the New Economy.” 2001 Census Analysis Series. Ottawa: Statistics Canada, catalogue no. 96F0030XIE2001013.

Stoffman, D. (2002). Who gets in: What’s wrong with Canada’s Immigration Program – and how to fix it. Toronto: Macfarlane Walter and Ross.

Sweetman, A. (2004). “Immigrant Source Country School Quality and Canadian Labour Market Outcomes.” Analytical Studies Research Paper Series. Ottawa: Statistics Canada, catalogue no. 11F0019MIE — No. 234.

Swidinsky, R., and Swidinsky, M. (2002). “The Relative Earnings of Visible Minorities in Canada: New Evidence from the 1996 Census.” Industrial Relations 57, 630-59.

Wanner, R. A. (1998). “Prejudice, Profit, or Productivity: Explaining Returns to Human Capital among Male Immigrants to Canada,” Canadian Ethnic Studies 30, 3: 24-55.

Worswick, C. (2004). “Immigrants’ Declining Earnings: Reasons and Remedies.” C.D. Howe Backgrounder series 81. Toronto: C.D. Howe Institute.

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