The case for sending America's unemployed abroad.
- By Charles Kenny<p> Charles Kenny is a senior fellow at the Center for Global Development, a Schwartz fellow at the New America Foundation, and author, most recently, of Getting Better: Why Global Development Is Succeeding and How We Can Improve the World Even More. "The Optimist," his column for Foreign Policy, runs weekly. </p>
Although North America and Europe have finally emerged from the darkness of the global financial crisis, and although the stratospheric growth rates of Brazil, China, and India have come down to Earth, the economies of the West still lag behind those in the rest of the world. That’s particularly the case when it comes to jobs. The unemployment rate in the United States, for example, remains stubbornly around 7 percent. In Chile, Hong Kong, Indonesia, Mexico, and South Korea, however, the official unemployment rate is way lower. Faster growth is key to high employment just as recessions produce dole queues.
So here’s a novel solution to America’s problem: Move the people to where the jobs are.
Exporting the unemployed may sound radical, even cruel, but the quest for jobs has been a driving force behind global migration — and population growth in the New World — for centuries. More than 55 million Europeans, many desperate and poor, migrated to the Americas between 1846 and 1940, for example — often with a "good riddance" from their home governments. And in the past few years, those movements have started up again. When crippling unemployment throttled Spain, some 30,000 Spaniards upped and moved to Argentina between June 2009 and November 2010. The Portuguese, meanwhile, beset by debt and slow growth at home, are heading to Brazil and oil-rich Angola. Between 2008 and 2011 alone, more than 1 percent of the Portuguese population moved to just that one African country. (In terms of relative population, that would be the same as 3 million Americans packing up and shipping off to their country’s ex-colony, the Philippines, in search of a better life.)
But Americans haven’t been searching for a better life somewhere else on nearly the same scale. According to the State Department, only about 6.3 million U.S. citizens live abroad, or around 2 percent of the domestic population. In relative terms, that’s pathetic. About 5.5 million British people live permanently abroad, almost five times the U.S. level in per capita terms. Maybe they’re trying to escape the lousy weather, but it isn’t like Brits have natural advantages over Americans as travelers. British people are almost as bad at speaking other languages as Americans are, and in terms of haughty isolationism and disdain for foreigners, surely Brits are worse. (I’m allowed say this — I’m British.)
So why shouldn’t America send out some huddled masses for once? Of course Americans want a young, employed workforce to help support their aging society as it pays for rising Medicare and Social Security bills, but it would be far better for everyone if they were employed abroad rather than sitting idly at home. And many of the country’s unemployed are demographically well placed for a change of scene precisely because they’re disproportionately young and footloose. The Bureau of Labor Statistics reports that, as of October 2013, the unemployment rate among those ages 16 to 19 was 22 percent; among those 20 to 24, it was 12.5 percent. And the rate among men never married in all age ranges is around 12 percent. Nothing’s tying them down. Go East, young men! (I’m allowed to say this — I’m married.)
Some might wonder, though: Would other countries really want America’s wastrel youth, with their lack of language skills and poor education? It is true that Gallup polls suggest only 14 percent of U.S. citizens claim they can speak Spanish well enough to hold a conversation. Look at any other language and the numbers become truly dire. Around 4 percent can parler in French, and a little less than 3 percent sprechen Deutsch. And though teaching Mandarin to toddlers is now de rigueur in suburban nursery schools from Scarsdale to Santa Monica, fewer than one in 100 Americans can converse in China’s lingua franca. The good news is that English has official or special status in countries that are home to 2 billion people, and one in four of the world’s people speak English to some level of competence.
And though it’s true that jobs are hardest to come by for the least educated Americans, it’s still not a pretty picture for recent grads. The unemployment rate for those ages 20 to 29 who had graduated from college in 2011 was 12.6 percent as of October 2011. But even young Americans who haven’t made it to university have received a quality of education considerably higher than that of most people in emerging economies. The Organization for Economic Cooperation and Development runs internationally comparable tests of student achievement at the high school level. The U.S. average score on the reading tests was 500. That’s behind South Korea (539), but it compares favorably with Brazil (412) and Panama (371). It’s even better than Portugal (489). So buck up, C students: You might still be an attractive addition to Brazilian firms looking for some English-speaking talent. And trust me, Rio de Janeiro isn’t a hardship post.
Why should we be encouraging the young and unemployed to look worldwide for better opportunities? Because the benefits of U.S. emigration extend way beyond ready jobs and a more interesting life for those in search of adventures abroad. Research by economists Gabriel Felbermayr and Benjamin Jung suggest that as little as a 1 percent increase in migration between two countries raises bilateral trade. There’s also evidence from development economists Maurice Kugler and Hillel Rapoport that migrating to another country brings greater foreign investment back home. Their research suggests that if you double the number of Americans living in another country, you’ll see foreign direct investment from that country to the United States increase by about a fifth. Simply put, there’s a profound benefit to the economy in sending your kids overseas, not to mention the benefit of getting them out of the house for a while. (I’m allowed to say this — I have children.)
As Congress debates immigration reform, it’s worth remembering that the United States benefits from both sides of the migration equation. Immigrants coming to the United States do wonders for the local economy: They’re associated with higher wages and employment for Americans, according to research by economists Gianmarco Ottaviano, Giovanni Peri, and Greg Wright. And they’re responsible for a huge amount of innovation and entrepreneurship in places like Silicon Valley: Research by Duke University’s Vivek Wadhwa suggests that more than half of new start-ups out there are founded by immigrants. Perhaps Washington could boost this employment exchange by offering a few more places for immigrants from countries that open the doors to U.S. emigrants.
So let’s help show young Americans the door by allowing the Peace Corps to offer short-term voluntary assignments and by expanding programs like the Fulbright that support academic study overseas. And let’s keep them abroad by abandoning the system that makes them pay taxes to the United States on top of the taxes they pay to their host countries. And why not encourage the portability of benefits from Medicare to Social Security? Or, thinking bigger, why not use the U.S.-EU trade talks to set up a transatlantic visa-free zone? The free movement of labor has done wonders for Europe. It’s time Americans get on board. A more globalized U.S. workforce would be good for the unemployed, good for the country — and good for the world.
Clyde Prestowitz is the founder and president of the Economic Strategy Institute (ESI), where he has become one of the world's leading writers and strategists on globalization and competitiveness, and an influential advisor to the U.S. and other governments. He has also advised a number of global corporations such as Intel, FormFactor, and Fedex and serves on the advisory board of Indonesia's Center for International and Strategic Studies.| Prestowitz |