Tuesday 30 June 2009

OECD Sees Slowdown In Migrant Workers Steepening In 2009

OECD Sees Slowdown In Migrant Workers Steepening In 2009

LONDON -(Dow Jones)- The number of people moving from one country to another in order to work has begun to fall in a number of leading economies, a decline that is likely to steepen this year, the Organization for Economic Cooperation and Development said Tuesday.

But in its annual report on labor migration, the Paris-based think tank said developed countries will once again need overseas workers when their economies recover, and governments should continue to improve their systems for handling migrants.

The OECD said there were already indications in 2008 of a slowdown in immigration in a number of developed economies.

In the U.S., the number of H-1B temporary visas granted in the 2008 fiscal year was down 15% from the previous year, while in Spain, new entries under a scheme driven by employer nominations fell to 137,000 in 2008 from 200,000 in 2007.

In the U.K., worker registrations in the fourth quarter of 2008 were down 45% on the same period in 2007, while in Australia, employer applications were down 11% in the 12 months ending February 2009.

However, the OECD said the fall in the number of migrant workers entering developed countries is likely to be larger this year.

"In most countries, the time it takes for the economic shock to affect the labor market and the lag between application and authorization of entry mean that the drop in labor demand will result in declines in entries only with some delay, probably in the course of 2009," the OECD said.

The increased movement of workers between countries has been one of the hallmarks of the globalization of the world economy over the past two decades, along with increased cross-border investment and bank lending, and increasing trade.

According to the OECD, of the two million additional jobs created in the U.K. between 1997 and 2007, 1.5 million were filled by people born outside the country. And 58% of the 15 million jobs created in the U.S. over the same period were filled by immigrants.

Like labor migration, those flows have declined sharply since the intensification of the global financial crisis in September 2008.

Earlier this month, the United Nations Conference on Trade and Development said global flows of foreign direct investment halved during the first three months of 2009, while according to the Bank for International Settlements, banks cut their overseas lending by $1.8 trillion in the fourth quarter, the largest drop since records began in 1977.

And according to the Netherlands Bureau for Economic Policy Analysis, world trade volumes fell by 0.6% in April. In the three months to April, trade volumes were down 6% from the three months to January.

The increased movement of workers was the most controversial of the flows associated with increased globalization, fueling concerns about employment opportunities and pay levels among adults in developed countries with and without jobs.

In recent elections to the European Parliament, the anti-immigration British National Party won its first seats since polling began in 1979, while the anti-immigration Dutch Freedom Party won the second largest share of the vote in the Netherlands.

Across the developed world, governments are limiting the number of immigrants.

"Numerical limits and lists of occupations in shortage have been reduced and employment tests are being applied more strictly," said Angel Gurria, the OECD's secretary general. "Programs to encourage immigrants to return to their home countries have been introduced and measures to combat irregular migration reinforced."

But the OECD said the flows served to address shortages of particular skills and the expected decline in working-age populations. When developed economies emerge from the recession, the OECD expects those drivers to return.

"With the onset of recovery, which may take some time, the pressures in the labor market will reassert themselves and international migration flows are likely to rebound as part of the solution to addressing these," Gurria said.

The OECD said migrant workers are suffering disproportionately from the rise in unemployment, which the OECD expects will exceed 10% in a number of developed economies by the end of 2010.

"Employers are often more reluctant to hire immigrants and more ready to fire them," Gurria said. "As a result, unemployment rates among immigrants have risen more than among native-born workers."

-Paul Hannon, Dow Jones Newswires, +44 20 7842 9491, paul.hannon@dowjones.com

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(END) Dow Jones Newswires

June 30, 2009 03:30 ET (07:30 GMT)

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