Visa restrictions could lead to more offshoring
Yes, macroeconomics can be hard, but the law of unintended consequences does not grade on a curve. From American public media. This is marketplace. In Los Angeles I'm Kai. Tuesday today twenty three June is always to have your long everybody. We begin today with Presidential Proclamation Number One, zero, zero, one four, the official title of which is proclamation suspending entry of aliens who present a risk to the US labor market, following the coronavirus outbreak. In somewhat more plain language president trump has decided to stop hundreds of thousands of foreign workers from getting jobs in this economy, their stricken on work visas are in place through the end of the year, although renewable, and they apply to a whole lot of highly skilled jobs, usually in stem fields, also those seasonal hospitality, workers and students on summer work study programs to stories on this story. Start things off today, the common theme of which is. You know sometimes things. Don't work out the way you think. They're gonNA from the Workplace Culture Desk Marketplace's Megan mcardle. CARINO'S UP I. The cutting off the says is that American companies will hire Americans, but it's often not that simple foreign workers helped the economy says Giovanni petty an economist at the University of California, Davis worker are allowing these companies to grow to improve their productivity day are connected with other jobs. We American are doing. He's found cities that have higher numbers of immigrants working in stem fields on H.. One B. Visas for specialty occupations also have more job and wage growth for. Workers and when companies can't hire workers from abroad, they often simply move jobs instead says. British Glennon a professor of management at University of Pennsylvania's Wharton School, so those jobs aren't necessarily Americans. It just means that those jobs are going to another country. She found restrictions on H.. One B. Visas led firms to move more jobs to China India and Canada during the early two thousands, but allowing companies to. To hire more immigrants doesn't necessarily slow. The exporting of jobs overseas says Ron, here, a professor of political science at Howard, university and author of outsourcing America, so the net effect of H. One bs to speed up offshoring. He says of the top thirty companies that received the most H.. One B. Visas. Half of them are staffing firms that send jobs abroad, so they have the US workers trained. Trained the H. One B. Workers who had a return home as their ultimate aim is to try to shift the work off shores just possible. He advocates reforms to the immigration system to limit such abuses, while still allowing for innovation growth but Warton's British Glennon, says the limits put in place by the trump administration could change the course of business for years or even decades to come if it. It becomes difficult to hire people in your US office. You may shift more than just those immigrant jobs abroad. She says once companies start moving jobs. The innovation that fuels growth goes along with them I. Megan mccurdy, Carino for marketplace, so let's take a slice of the American labor force. Because immigration is right, it's a labor story. Let's take a slice and apply this new trump administration rule to. Of course the rule of unintended consequences. A category of work visa known as H. One B. is Meghan saying among the visas that have been shut off its among the biggest categories of work visas, and it is used by among other industries healthcare, and as marketplace's Jasmine GARS reminds us. We got a pandemic on. Dr Mu Cash Gopala. Krishna is an emergency cardiologists at a retirement community an hour outside of Tucson Arizona ongoing cardiologists who bad luck! Basin the week these days. He sees a lot of covid nineteen patients. He was born in India and is here on H. One B. Visa in America around twenty eight percent of doctors, thirty five percent of home aids and twenty percent of nursing assistance are foreign born for many international medical students. The way to stay in the US after graduation is by serving at risk communities that includes rural areas much like where Dr Gopala Krishna is practicing last year. Rural areas accounted for sixty six percent of the health. Professional Shortage Areas Richard Burke. Burke is with envoy global which prepares visa applications for businesses like hospitals. He says the issue is simply supply and demand you. Citizens of the students are not graduating in the requisite levels with stem degrees to address this shortage, which is only gonNA. Get more profound. The trump administration has said the freeze on work. Visas will protect jobs that could go to American Workers Masa. Come Bobby an attorney with the American immigration. Lawyers Association says that won't happen. You need these H.. One B. Physicians who are willing to go to Alabama or Georgia. Parts of the beltway just don't have enough doctors now. This sends a signal to all of them. Look, we don't care about you. We don't want you to come here and work in the United States and she's worried. The visa freeze will push them to get jobs in other countries. I'm Jasmine garnished for marketplace. This quick item immigration adjacent from the marketplace desk of Yeah I guess turnabout is fair. Play the, new. York Times reports today that as the European Union prepares to reopen its borders, a draft list of countries whose nationals will not be welcome to travel to the European Union because they failed to control the virus. That list includes Russia Brazil. And the United States. There was a little aga in the markets overnight, but all was well once the bell sounded. We'll have the details when we do the numbers. There was a bit of a set to last night. A been back and forth some cross trade policy wires. I guess you'd say the Guy. who was nominally in charge of this administration's trade policy that it'd be Peter Navarro. The Director of the National Trade Council said on Fox News yesterday that the U. S. China. Trade deal was over. It's over is what he said. Couple three hours later Navarro had said the videotape had quoted him out of context. National Economic, Council Director Larry Cudlow, had said the trade deal is not dead, and their boss had taken to his favorite social media website, and said it is in fact firmly intact that deal. The futures markets had a modified freak out to the whole thing was over, but then this morning the world. Trade Organization said global trade in the second quarter, had dropped eighteen and a half percent compared to a year ago. Marketplace's Kimberly Adams is on the trade desk today for context that big a drop in trade is really bad. Here's WTO director. General Roberto as Vado in a youtube video. It will be the. The steepest on record, but there is an important civil irony here. The falling trade could have been much worse. Earlier. Estimates had trade falling more than thirty percent this year. Now it looks like the hit will be closer to thirteen percent. Trade is about people wanting stuff in one country within parts and labor coming together from other countries to get that thing to them, but that's tough to do in pandemic there's. There's five different countries involved in making a blue widget with white POLKA DOTS. Christine mcdaniel is a senior research fellow at the Mercatus Center. In one of those countries is not operating at full capacity than the rest of the supply chain, either has to slow down or stop or find an alternative earlier in the pandemic. A lot of trade just stopped, but now says Jeffrey Gertz at the Brookings Institution now we're. We're entering this new phase where there seems to be these rolling blackouts of country is turning on and off the economy's going in and out of lockdowns, even as economies in Europe, and the US reopen for now more cases and lockdowns and Brazil India and sub Saharan. Africa create more disruptions doubted. Jawara is with Africa focused investment firm Alta partners. He gives the example of a key port in Kenya ships on. Mamba than room to unfinished materials on being sold and distributed in Kenya. Rwanda Burundi Tanzania all of the kind of inland countries, keeping trade flowing requires countries to keep the virus under control, but that's a big, if so the WTO and other trade groups create a best case scenario, a worst case scenario and crossed their fingers in Washington I'm Kimberly Adams for marketplace? I. I. We're what now three days into the summer of two thousand twenty. And for those, for whom summer jobs are an economic necessity. Well. Sorry last year this time with unemployment at record lows more than half of sixteen to twenty four year. Olds had a summer job not so here in this pandemic economy. Marketplace's Kristen Schwab is on that one. Maybe you've been to camp or your kids. Have you know arts and crafts? Swimming Bug Bites, and of course the camp song raw bre Canfora. Firm together. Stand really. Slaughter has been going to rock camp for girls in North Carolina since she was, Tan. She's twenty two now, and this would have been her fifth summer as a counselor. Would have been because camp is canceled Sarah. T. So route camp thin lar- hearts will stand for loyalty. Slaughter is an English lit major at Auburn University in Alabama and the thirty three hundred dollars. She makes every summer usually helps her pay for books, which doesn't go very far because text books are expensive, but it's not just money. She'll miss out on. Slaughter wants to be a teacher and she says camp helps her build leadership skills. It gives me the opportunity to create bonds with these campers a lot of times. These girls are looking. Looking for role models, this summer is going to be hard on a lot of young people who are counting on being able to get a job especially in travel, tourism and restaurants which hire a lot of seasonal workers. What happens to a seasonal economy when the season doesn't come, that's Betsy Stevenson. A former chief economist with the Labor Department. What will actually see? Is the season not coming, but it coming in such a partial way. That there is a lot of permanent job destruction, and it reaches far beyond young people to workers who take on second jobs in the summer and teachers who use the season to earn extra cash and for a lot of businesses in vacation towns. Summer isn't just these season. It's the only season tour operators, bike, rentals and boardwalk shops typically closed for winter. This year is GonNa be a tough year financially. There's no answer US Mark Nevada manages will cross it resort on Cape Cod. He usually brings in around five hundred employees to work as housekeepers, servers and. And groundskeepers nearly all of them are seasonal and come back year after year. This summer he thinks will have to cut hiring in half because bookings are way down. We're going to onboard as demand grows, but we don't know exactly what that demand will be. A lot of businesses like sports franchises. Don't if there will be any demand at all, Sarah, Alcoa is twenty and we'll be a senior at UC. Santa Cruz in the fall. She was supposed to work for the La Dodgers Foundation this summer, but with the season disrupted. She's out of a job. When working every summer and follow. or really tough situation. She said she looked everywhere for work, but didn't have any luck so instead. It decided to take classes while I didn't really have a choice. Then, she got an internship with an education nonprofit show work fewer hours and won't make as much as she would have with the dodgers, but the internship could help her when she applies to Grad School in the fall. I'm kristen trump, for marketplace. Coming up twenty twenty is probably going to be the most challenging year. Chinese companies ever. Oh It's a challenging year everywhere gang but I. WanNa. Let's do the numbers. Industrial is up one hundred and thirty one points today, a half, percent, twenty, six, thousand, one, five, six, the Nasdaq up seventy four points, three quarters of one percent at ten, thousand, one, hundred, thirty, one, and the Nasdaq the S. and P. Five hundred up thirteen about four tenths percent, thirty, one and thirty one their meat, alternative producer beyond meat lost more than four percent today, starbucks travel impossible foods maker, the impossible Burger for its summer menu meatless breakfast sandwich say that ten times fast beyond meat recall when public in May of last year impossible foods is private starbucks up a tenth of one percent today and you're listening to marketplace. This is marketplace. I'm Kai Ryssdal. Megan Jasmine were laying out earlier in the program. What president trump's new limits on work? Visas might mean for this economy because to repeat myself. Immigration is a labor force story. We are going to turn now. Though to some immigration history how we used to let people come to America, and how that relates to some of what is happening today. Jilin Yang's new book about her family and the changes we've made immigration laws through the years is called one mighty and irresistible tied welcome to the program. Thanks for having me told me first of all, would you? How your parents came to the United States? They came as students really so they grew up in Taiwan, and in their twenties they came to the US for graduate education, my dad and economics, my mom and science, and they then decided to stay and build a life here, and for me I never really knew the story of why they were allowed to stay sort of took that part for granted, but the story of coming for their education than settling in being married having me, that was always the story. The back story of course is the immigration law of nineteen sixty five. Yeah, how did they? How did that benefit them I guess the question. So, our entire family is here. My my mom's siblings are here. They have kids of their own, and essentially the story of why everyone is here is traced back to this law. And I think that's the case for many Americans, especially asian-americans. This law was really important, because it basically said we're not going to be picking immigrants based on their ethnicity anymore. In the past, the government had prioritized people. People from northern. Western Europe to deter people from countries that they thought were undesirable, and so in sixty five they eliminated that form of discrimination and instead said you know if you already have someone coming here. This is what the trump administration calls chain migration, their sibling, their parents. Their child gets priority to get a visa, and it really is why the demographics of this country are changing so rapidly. Has To be pointed out that this law comes amid the Civil Rights Act of the mid nineteen sixties in the protests, and yet somehow gets subsumed right. It does kind of get lost. You say in your introduction. It's kind of a little known law. From this time it relatively little known I think it's increasingly recognized as an important one. I think probably because the people who wrote it didn't realize how significant it would be, either you know for them. It was this capstone achievement to rectify discrimination against. In particular, Jewish and Italian Americans, but no one thought that through the way that this law would reshape our immigration system that America's racial demographics would be changed forever. That was not on people's minds. There is. Certainly now, and I'll leave it to you to explain how might have existed in the past, but attention between. the family reunification. For American immigration policy and the desire of getting skilled emigrants to this country. Does that play in this law and in the decades since? It's a really critical piece of the history. The thing to remember is that for a long time we essentially had open borders, but over time starting in the fifties, we began to sort of these requirements and ways of thinking about you know. Do we want people who are highly skilled and in sixty five and there was this huge debate over okay. You're not going to do ethnic quotas. How are we going to pick? WHO's GONNA come into this country and they arrived at family. Interestingly as a way of keeping the country more white, in fact, at first, they wanted to prioritize skills, but they switched it and said let's actually prioritize families because that'll protect the white ethnic identity of this country, and ever, since then most of the green cards that are issued are based on family ties, and now the trump White House of course is really trying to change that you know they keep claiming that this is because of the pandemic. It's because of the economic fallout, and so they constantly talk about chain migration. Migration and our laws, I think they realize are exactly why this country's demographics have changed so much in ways that I think we haven't really fully grappled with. We just sort of assume that we've always been a nation of immigrants, but I think when you look at the history, you begin to see the ways in which were constantly choosing who can come in who cannot who has the right papers who doesn't each of these decisions are very political fight and we're just in the middle of that all over again now. Jilin Yang is a deputy national editor at The New York Times. Her book is called one mighty and irresistible time. Thanks for coming in. Thanks for having me so much. Jackson's book is out now. We've got an excerpt at marketplace dot org about why the practical effects of that law were so much different than anybody had been guessing. You know I've been saying since this pandemic started that it's exposing some of the troubling underlying realities of this economy, some of them big like inequality and racism, some of them a little bit less big supply chain problems in the like. Same thing is happening elsewhere in the world in China for sure shops and businesses, most of them anyway are open, and the talk is turning to practicalities like getting paid and as marketplace's Jennifer pack reports from Shanghai. That is not a new problem over there. Was it. At a starbucks in Shanghai. Jiao gend is on the phone. He runs a company that supplies pumps and pipes to float and pharmaceutical factories since the coronavirus outbreak. He chases clients to pay overdue bills once a week. Or seventy by. About a third of my clients don't pay on time. That was true even before the pandemic it some won't transfer the money unless I remind them. So far. He says he's only had one client default on payment. He took the firm to court and won, but still hasn't seen the money he's owed for him. It's all about what Chinese call one sheet, personal trust and connections. Go just as one you. How's your shampoo to? Do Business, in China, we operate on mutual trust, contracts are useless. Courts can do much for us either. He says he can't be too picky about clients. Business hasn't been as good in the downturn of the past few years. There's too much competition and less easy credit. John Wall owns a fabric trading company in eastern Gijon province. You know so about in twenty fourteen payments would arrive one month after we delivered coming became forty five days than three months now payments take six months or longer, and that's risky for businesses. If a client delays payment for more than six months, there's an eighty percent chance he won't pay. Says Asia. Economists Carlos Cazenove with the credit insurance firm. Firm Co fast when you already have accumulated a payment delay, and this accounts for large portion of your annual turnover ten percent, then you are in a situation where if there's an exogenous shock like over Nineteen, you might stumble into Castro difficulties out of some one thousand companies. He served in China last year. Sixty six percent said their clients delayed payments. He expects the situation will be worse this year. Twenty is probably going to be the most challenging year for Chinese companies ever. With growth expected to drop according to our forecasts to one percent in two thousand twenty. That is quite unprecedented cove in nineteen, crisis has wiped out overseas orders for fabric, traitor junk wall, but he says he has some domestic orders that should keep him afloat. He admits though he has a lot more time to go fishing these days. Back at starbucks factory equipment supplier walks out in says he's more proactive about chasing debt nowadays, but he doesn't push to heart. You got your challenge. Chinese people care a lot about relationships. Chase, my clients to aggressively it might hurt their self-esteem. They'll say. I never said I won't pay you. He says find an excuse. A good time to chase debts in China is the end of the lunar year. When businesses need to close their books, the practice is so common that before the Lunar New Year back in January and days before the pandemic shutdown. Much of China's economy, you could hear on public transport people, chasing death, or like this businessman being asked to pay up. August yeah Algebra. You need to send me an invoice. You only sent me a picture of your bank. How do I know how much money I owe you? Humor can help to businessmen. Junkin who sells lights posted a video on the Chinese version of TIKTOK. Clients will mean money he points. The camera to a bowl of rice topped with Lao Gunma Chili Sauce Magen CNN. One can look at this without money. I can only afford logon macchia. SASA, my rice, please. He says. Send your payment to me as soon as you can. In Shanghai, I'm Jennifer Pack. For marketplace. Will. ooh! This final note on the way out today. I'm going to go to the Transportation Security Administration well one more time as you know, it's one of my key indicators in this whole thing, TSA passenger throughput for yesterday and a year ago yesterday we are over six hundred thousand people who are feeling good enough about what's going on to fly six, hundred, seven, thousand, actually the. The first time north of six hundred cases March. Yes, YOU'RE AGO! Yesterday was two point seven million, but you know progress not for nothing, but molly would, and I were talking to a doctor about this pandemic on our podcast this morning. Make me smart. It's called the podcast. Check it out anyway. He said this doctor. Did you know all precautions? Being taken, he would fly. Are we are Outta here, but not without a moment of economic context. We got numbers on May home sales this week. New Home Sales this morning to be specific up almost thirteen percent in May from a year ago and in closely related news mortgage rates about as low as they have ever been. Our digital and on demand team includes carry Barber Samantha, Fields Ben Heck Code Sarah. Menendez Allies Mills Janet Win Zarni have is is their executive director of on demand, and I'm Kai Ryssdal we will see Mar, but. This is APN.