Brits Have a New, Sophisticated Way to Determine Skills Shortages

By David North on December 13, 2010

There is a strong argument to be made that there is no such thing as a skills shortage, only a wages-and-training shortage, but it is highly unlikely that employers' desires for low-cost skilled workers from overseas can be thwarted with that sensible line of reasoning.

But one way to cope with the challenge is to perfect tough new, evidence-based standards for defining an immigration-creating skills shortage, and the British have done just that.

The new system is managed by an independent unit of the Home Office, the Migration Advisory Committee (MAC), and it was shown off at a conference last week in Washington, sponsored by the Economic Policy Institute (EPI). Two Home Office staffers and a British Embassy official described the new system in an all-day conference of immigration policy specialists. The conference agenda is here.

Among the American commentators were Ray Marshall, the former Secretary of Labor, Doris Meissner, former INS Commissioner, and Professor Philip Martin of UC-Davis.

The MAC system had been started a couple of years ago by the Labour Government of Gordon Brown, and has been retained by the new Coalition Government led by the Tories' David Cameron, as Michael Teitlebaum of the Alfred P. Sloan Foundation pointed out to the group.

The MAC shortage-identification process is keyed to three words: "skilled," "shortage," and "sensible." The position to be filled must require a high level of readily definable skills, and filling it through immigration must be sensible, given other national priorities, like assuring jobs for residents. That the Brits ask the question "Should we fill these jobs through immigration?" is a large step ahead of the U.S. practice which, in my eyes, more or less assumes that filling a job via immigration is appropriate without much further thought.

The ways "shortages" are judged are far more sophisticated than anything used in the United States. The Home Office, which is equivalent to our Department of Homeland Security, uses both "top-down" (national labor statistics) data and "bottom-up" (employer-based) data in deciding if a shortage actually exists; we rely all too heavily on what the employer has to say.

Within that framework, the Brits ask logical questions like: 1) How extensive is unemployment within the occupation in question? 2) What has happened to wages for these jobs in the last year? and 3) How much overtime is worked in the occupation currently? The British collect data on all of those variables.

If the answers are, respectively: 1) substantial, 2) nothing, and 3) not much – then the likelihood of an immigration-creating vacancy is not very good.

The MAC system has a battery of 12 such questions, and there apparently needs to be a majority of these measures pointing to a real shortage before the Government will rule that there is one.

At least one of the American commentators expressed envy at the much greater supply of pertinent data available on these matters on the other side of the Atlantic, and the greater rationality of the UK's new system.

For a complete, and lengthy, description of the new system, see here.

Earlier in the conference there had been a discussion of using expert commissions to help make national immigration policy, a subject I discussed with some alarm in a CIS Backgrounder entitled "Beware of Indirect Immigration Policy Making" in August. My sense is that while expertise is useful, giving too much power to immigration policy commissions is sure to lead to victories by the open-borders people, who, with their well-funded allies, tend to dominate such bodies. This is particularly true if the commission is given the power to suggest policy, and then that policy goes into effect automatically unless Congress vetoes it.

Happily the MAC does not have those powers. The British Government asks the MAC clearly defined questions and then the Government either accepts, rejects, or does something else with the answers – and it has done all three.

While, as a general rule, I think industry should be forced to raise wages and train residents to meet skill shortages, there have to be some exceptions to that rule.

If a genuine university wants, for instance, to hire a trilingual professor (English, Kazakh, and Russian) to teach the sociology of the "-stans," and it cannot recruit one within the U.S., it should be allowed a labor certification, providing the newly hired professor is paid as much as his or her peers. It would take a decade to train such a person, and even sharply lifting the salary would be unlikely to unearth suitable candidates among residents of the U.S.

Unfortunately, the current American system, though it would accommodate the employment of the "-stans" expert, also gives a virtual carte blanche to employers wanting to hire aliens with nothing more exotic than a bachelor's degree in science or engineering, and makes special, even-easier rules for those with a master's degree in one those subjects, via the H-1B program.

The EPI conference also included a harsh critique of the L-1 visa program, which transfers overseas professionals employed by multinational companies to jobs in the U.S. That will be the subject of a subsequent blog.