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'By preventing the entry of new immigrants, Trump would penalize the American economy'

  Jennifer Hunt, an employment and immigration specialist  working for the US Treasury, is worried about the consequences the crisis will leave on the job markets.

The crisis linked to the pandemic risks further widening the wage gap between highly qualified and low-skilled workers, warns Jennifer Hunt, professor of economics at Rutgers University (United States), speaking at the "Aix en Seine ”, which were held from July 3 to 5 in Paris.

Former head of the US Department of Labor 
(2013–2015) who passed through the US Treasury, this immigration specialist also believes that by partially closing its doors to foreign workers, the US economy would be permanently weakened.

What consequences will this crisis leave in the long term on the labor markets?

It depends on the country and it is still too early to say. But one thing is certain: the scars will probably be more marked in those who, by the time the pandemic hit, had not yet returned to their production level before the 2008 recession, like Italy.

Short-time working protected millions of jobs during the confinement in Europe. Its extension over the next few months could also help maintain jobs that would have disappeared without the crisis. Is it a problem ?

These mechanisms have been effective in allowing companies to retain their employees, avoiding having to part with them in an attempt to re-hire 
them later.

If, due to a rebound in the pandemic, these schemes extend beyond a year, there is a small risk: that of seeing the State subsidize old ways of working, of maintaining jobs that are poorly matched in the look at the evolutions of the technical organization. However, this risk remains largely secondary and limited in relation to the costs that mass unemployment would generate.

Will rising unemployment in advanced economies translate into a further increase in inequality?

In terms of wages, the gap is likely to widen further between highly qualified and low-skilled workers. The latter are more severely penalized during recessions because they hold more fragile jobs. In addition, remote work has often been impossible for them during confinement.

We should add that the current recession is different from the previous one in many ways. That of 2008 had first hit men, overrepresented in the industrial and construction sectors. This time, women, more numerous in tourism, hotel and catering and retail, are the first affected - at least so far.

Are the relocations that many states are calling for likely to create jobs?

No. A relocation of the manufacturing industry would create few jobs. Deprived of cheap labor, employers would automate and hire only a few highly skilled workers to program and maintain robots and other machines. So better let the market determine the location of the job. If we consider the gains for the host countries and the lower costs for consumers, the net impact is positive for the whole world.

But it is certain that offshoring also causes local losers, in the countries from which the factories leave. Some workers cannot find comparable jobs: it is essential to concentrate aid on them, while helping young people to train to integrate the sectors of the future. Of course, these are difficult to identify with certainty, but it can be said without much error that health is one of them.

The crisis has nevertheless shown the need to bring production closer to certain strategic sectors…

It is rather disappointing to note that since the beginning of the pandemic, a number of countries have played the card of each for themselves on the subject, including within the European Union - even if we can hope that this will change in the next month. The pandemic and the problems of disruption have indeed highlighted that certain production chains depend too much on a single country for their supply. The conclusion to be drawn from this is that we must diversify these sources rather than trying to relocate everything.

Especially since if talking about the repatriation of many industries can make sense for a large country like Germany, that does not make any sense for a small state like Switzerland, for example: for them, it is simply inconceivable. This makes me not very optimistic for the future.

Donald Trump has tightened his migration policy, the pandemic may limit the movement of workers for a while ... What consequences for the American economy?

In the short term, the consequences will be limited, since immigration is always reduced during recessions. Donald Trump has suspended the issuance of green cards and certain work visas until the end of 2020. If by chance the pandemic is brought under control before that, these restrictions would be harmful to growth.

A panel of experts from the National Academy of Sciences showed, in 2017, that immigration to the United States has no impact on the employment of native American workers, and little impact on their wages . The main cost for public finances concerns the education of their children in the public. By preventing the entry of new immigrants, Trump would therefore penalize the American economy by depriving it of an additional stimulus, linked to the increase in consumption that they represent.

And in the medium term?

Too often the debate centers on the integration of immigrants and the question of their supposed cost to public finances. I am especially interested in their impact on native workers in the host country. However, it appears that the immigration of low-skilled workers also contributes to the American economy, because they offer services that are sometimes poorly provided by local workers (home jobs, childcare, etc.), thus contributing to a diversification of skills and better specialization of the local workforce.

Our studies also show - and they are specific to the American case - that highly qualified immigrants arriving in the United States, very present in computer science, also contribute to growth and innovation. On average, they file twice as many patents as native workers.
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