Information and stories on Labor category

grape industrySouth Africa, a country located at the southern tip of Africa and bordered by the Atlantic Ocean and the Indian Ocean, is home to a vast number of grape plantations. Many of the grapes that come from these plantations are used to make wines first-world consumers enjoy. Popular brands include Capensis Chardonnay, Porseleinberg Syrah, and Ernie Els Signature Blend. But as delicious and luxurious as these wines may be, the grape industry they come from are using unfair labor tactics.

Unethical Conditions

A 2017 study done by Vinmonopolet, an alcoholic beverage retailer in Norway, exposed numerous grape plantations in South Africa where farmers were working under unethical conditions. These conditions include the following:

  • Facilities that lacking regular health and safety checks
  • Employees experiencing verbal harassment and physical harassment
  • Facilities not issuing employees with employment contracts
  • Employees being paid below minimum wage
  • Employers prohibiting employees from joining trade unions
  • Exposing workers to dangerous pesticides
  • Scheduling workers for 12-hour days with no overtime payment

While it is common for reporters to label these unfair labor tactics in the grape industry as “modern-day slavery,” many people do not ask why these exploitative practices from the past still exist. Seeking to start that conversation, the District Six Museum was founded.

Changing the Grape Industry

Built in 2017 in the South African city Cape Town, the District Six Museum’s goals are threefold:

  1. In order to understand how exploitation in the wine industry perpetuates itself, one must have knowledge of what came before.
  2. The first step to challenging the unfair labor tactics in the grape industry is to have conversations about the intergenerational trauma ingrained within this ongoing exploitation.
  3. Colonial-era methods and mentalities continue to influence current labor practices.

As tourism expands in South Africa, so does the wine industry. It is common for tourists to take advantage of the delicious wines during their stay. However, as the District Six Museum notes, the majority of tourists are clueless when it comes to both contemporary and historical unfair labor tactics in the grape industry. Through advocacy and bringing about awareness, the District Six Museum is working to change that.

Being fully aware of what the District Six Museum exposes, Fairtrade Africa, a nonprofit organization that represents all Fairtrade-certified products in Africa, is working to end the unfair labor tactics in the grape industry. Established in 2005, this nonprofit fights for the rights of all African harvesters — whether they be in the grape industry or not.

Through advocacy and various projects, Fairtrade Africa had many successes in their effort to combat the unfair labor tactics in the grape industry. For example, Fransmanskraal, a farm on the South African Western Cape province that supplies grapes to Place in the Sun Wines, was able to use the premiums they received from Fairtrade Africa to improve the quality of their educational and recreational facilities. These premiums, which are not aid but are generated from business transactions, gave school-aged children the opportunity to attend school in their hometown, to participate in local sports matches and to improve nutrition by building vegetable gardens. The premium even helped one woman named Alvercia Juries attend and graduate from the University of Western Cape, making her the first college graduate in the Fransmanskraal community.

Another project Fairtrade Africa took on in the grape industry was reducing the use of coal to generate electricity in the Stellar Organics wine cellars. Western Cape, where Stellar Organics is located, can get very hot during the summer months. That is not good because wine needs to be kept at a certain temperature in order to be made just right. This is why Fairtrade Africa helped improve the insulation of Stellar Organics’ wine cellars, so they wouldn’t have to use so much coal to keep their wines at the right temperature. Ultimately, this allowed them to save electrical costs, be more environmentally sustainable and enhance the quality of their fair-trade products.

Fairtrade Africa encourages advocacy aimed at ending unfair labor tactics in the grape industry and is always accepting donations.

– Emily Turner
Photo: Wikimedia Commons

Labor
From 2010 to 2016, Vietnam’s poverty headcount ratio fell considerably from 20.7 to 9.8 percent of its population. Another significant amount of growth is reflected in Vietnam’s GDP, which increased from approximately $6.3 billion in 1989 to an estimated $205.3 billion in 2016. This extensive growth is linked to Vietnam’s reform in economic policy in the mid-1980’s, which in turn prompted labor reform in Vietnam.

Đổi Mới Economic Policy

In 1986, the Vietnam government initiated the Đổi Mới, a series of economic policy reforms that affected the country’s rapid recovery and furthered development.

The reform marked Vietnam’s transition from a centralized economy to an open-market one, otherwise known as an open door policy. The open door policy was intended “to promote a multi-sector economic system, emphasizing the state sector, while encouraging the private sector.”

According to the Social Watch, this change increased the gap between the rich and poor, which threatened the progress of poverty reduction.

Amid these economic policy changes and growing disparities between socioeconomic classes, labor rights came to the forefront in Vietnam’s policy agenda. Below are several examples of the reformed labor rights.

Formation of Labor Unions

The Human Rights Watch reported the formation of “independent trade unions” as a result of activist efforts in October 2006. These unions aimed to “protect the rights of workers” and “disseminate information about worker’s rights and exploitive and abusive labor conditions.”

For example, the United Worker-Farmers Organization of Vietnam and the Independent Worker’s Union of Vietnam supported farmers whose lands were taken. It is important to note that these “independent trade unions” are not officially acknowledged by Vietnam law.

Recorded Improvements

According to the World Bank, the gender gap is lessening. As of 2015, households led by women were “less likely to be poor than male-headed households” while the enrollment rates for girls and boys in primary and junior secondary school were almost equal.

In addition, the World Bank noted that women’s participation in the labour force “is within 10 percent of that of men”, a gap which is smaller than in most countries worldwide.

Labour Reform in Vietnam and Problems Today

Despite advances in labor reform in Vietnam, the move toward independent labor unions was halted when the U.S. left the Trans-Pacific Partnership (TPP). In July 2017, The Diplomat noted that trade unions in Vietnam strongly relied on the financial support and management from the state. Furthermore, Vietnamese laws require contributions to a trade union fund from employers, effectively making trade unions financially dependent on employers.

This is especially concerning in the wake of the U.S. leaving the TPP, as it halted Vietnam’s labor rights reform. The Diplomat emphasized that “many people argued that the need for labor rights reform is gone because there is no more demand for reform from the United States.”

However, there is a solution to the current state of limited labor rights and corrupt workplaces.

Addressing Corruption with a Potential “Đổi Mới II”

Vietnam can counter corruption through reform, coined as “Đổi Mới II,” which focuses on fighting corruption and enhancing institutional legitimacy through increased democratization. By applying the rule of law more rigorously, governance can be improved.

Labor reform in Vietnam, while not occuring rapidly, is experiencing activism, protests, and potential uncertainty. Despite these factors, however, improvements are possible, especially with the “Đổi Mới II” reform policy and initiatives like introducing independent labor unions, which curtail corruption and advocate on behalf of Vietnam’s laborers.

Christine Leung

Photo: Flickr

Women in the Indian Workplace
India is the world’s second largest populated country with over 1.3 billion people living within its borders. Of these 1.3 billion, 60 percent live in poverty. Indian poverty is further exacerbated by a growing income inequality. According to the British charity, Oxfam, only the top 10 percent of people in India own the majority of the country’s wealth (80 percent). This has real-world consequences; three out of every four Indians still live in small rural villages, and seven out of twenty are illiterate. These statistics present serious challenges for India’s development.

If the majority of India’s population is too poor to buy consumer goods, the economy will not be able to grow as quickly. Complex as the issue of poverty in India may seem, there is one relatively simple and effective solution; fully incorporate women in the workplace in India.

How Women in the Workplace in India Will Help the Economy

According to Catalyst, an international nongovernmental organization (NGO) that works to represent women’s interests in the workplace, women access higher education in India at the same rates as men (27 percent). However, the labor statistics are a different story. Only about 29 percent of Indian women work compared to 82 percent of Indian men. This leaves the Indian economy at a developmental disadvantage. If the rate of women in the workplace in India jumped to a mere 40 percent by 2025, India could add $700 billion to its GDP.

Unfortunately, according to The Economist, instead of increasing, the rate of female participation in India’s labor force has been decreasing in recent years. Since 2005, India’s labor force has dropped at least nine percentage points, despite overall population growth. This leaves India with one of the largest untapped worker populations in the world. If Indian women worked just as often as men, the nation would have over 200 million extra workers. According to The International Monetary Fund, this shift would grow the nation’s economy by 27 percent, effectively making India a developed country.  

Why Women in India Are Not Working

There are several factors influencing the drop in women in the workforce. Firstly and primarily, there is the issue of cultural bias against women working. In India, especially after the marriage, most women are expected to remain in the home. In fact, women working is considered a mark of a lower social status. This is why, as a whole, as Indian households become wealthier, fewer women are participating in the workforce.

Secondly, there is the issue of maternal responsibility. Indian mothers are expected to shoulder the burden of household duties on their own. Employers have to provide 26 weeks of paid maternity leave, but there is have no obligation at all to provide paternity leave. On top of this, employers are deterred by the requirement to provide childcare for women returning to work. When combined with the high expectation of caring for the family, these factors create a “motherhood penalty”  for working women.

Finally, regardless of gender, many traditional Indian jobs are disappearing because of industrialization. Because of Indian law, unlike in other developing countries, they aren’t being replaced by women-friendly factories. This scarcity further reduces the opportunities for women in the Indian workplace. A 2012 poll found that when jobs are harder to come by, 84 percent of Indians believe men are more entitled to have them.

How India Is Working To Include Women in the Workforce

The obstacles created by culture, politics and the economy may seem insurmountable, but various organizations have already been putting forth various solutions. The Prime Minister, Narendra Modi launched two programs on the anniversary of former, late, female leader Jayalalithaa. One provides working women with scooters, making their commutes to work easier and safer; the other plants 70 lakh trees to honor the 70 years since Jayalalithaa’s birth.

The Prime Minister also launched Make in India (2014) and Startup in India (2016) in order to not only invest in the people of India by helping to fund small businesses but also to provide jobs that these businesses would bring to India. Both of these initiatives provide opportunities for women to enter the workforce.

Furthermore, another government organization, Women Entrepreneurship Platform (WEP), was launched to encourage women’s participation in business by offering support and collaboration with industry partners while NGOs such as CARE India are mobilizing to support the country’s working women by empowering individuals to be role models for their communities.

In the future, in order to ensure the development of these organizations, India should continue to work to change the social norms that have surrounded women regarding work and maternal responsibilities. The Indian government should look deeply into their development plans and aid working women by changing policies that disproportionately harm them. Only when there is a more balanced amount of women in the workplace in India, can the country develop fully.

Lydia Cardwell
Photo: Pixabay

Cassava RootThe cassava root is such a versatile ingredient in the fight against poverty that some scientists are calling it a ‘miracle crop’.

It’s likely that even you have come across cassava, as it makes up the small balls in bubble tea and is the main ingredient in tapioca pudding.

While it lends a hand to some dishes in developed countries, the root is a vital component to diets in the developing world. Cassava is one of the leading food and feed plants of the world, ranking fourth among staple crops with a global production of about 160 million tons per year. The majority of cassava is grown in three regions: West Africa and the adjoining Congo basin, tropical South America and South and Southeast Asia.

The miracle crop was introduced into Africa in the 16th century by Portuguese traders from Brazil. Initially, it was adopted as a famine-reserve crop because of its nutritional value. The leaves can be prepared in a similar fashion to spinach and contain high levels of protein and vitamins A, B and C. Cassava root can be prepared in countless ways, but should not be consumed raw. They are often boiled and sliced, but they can also be dried and beaten into flour.

It is among the highest calorie value foods, containing 160 calories per 100g root. It provides more protein than sources like yams or potatoes and it is also a leading source of essential minerals like zinc, magnesium, copper, iron, manganese and potassium. Potassium is an important component of a healthy diet, helping regulate heart rate and blood pressure.

In addition to its bountiful nutritious value, the crop is perhaps one of the world’s easiest to grow. Cassava root can be grown well in poor soil with a relatively low fertility and textures ranging from sands to clay. It is drought resistant and loses its leaves in order to preserve moisture in times of limited rainfall. The plant produces new leaves when rains resume. Additionally, cassava can be grown in extreme rainfall. For these reasons, the crop requires little labor and attention and the fruits of one harvest can be consumed 6 months to 3 years after planting.

Lastly, cassava has the potential to solve more than hunger. It is possible to transform cassava from a low-yielding famine-reserve crop to a high-yielding cash crop in order to raise income and draw poor regions out of poverty. The domestic market for cassava products continues to grow and export demands are increasing.

Cassava production presents enormous opportunities for solving domestic famine and malnutrition. It could also promote economic stability and reduce poverty through trade between areas with a food surplus and a food deficit.

Jamie Enright

Photo: Flickr

 

Labor unions support the Jones ActThe Jones Act made headlines in the past month, an impressive feat for an obscure law almost a century old. The law requires a certain amount of U.S. ships to deliver aid and trade to other parts of the world. Lawmakers of the 20th century designed the act to protect the finances of U.S. maritime industries.

Puerto Rico has been in dire need of aid since Hurricane Maria hit the island. It requested an extension of a Jones Act waiver during the crisis, so emergency supply delivery would not be impeded. The federal U.S. government denied this request.

Defenders of the Jones Act include the International Longshore and Warehouse Union, the Marine Engineers Beneficial Association, the Inland Boatmen’s Union and the Sailor’s Union of the Pacific. U.S. labor unions support the Jones Act, believing the 1920s legislation protects U.S. jobs. However, the Jones Act does not help labor like it used to.

The Capital Research Center, in its outline of the Jones Act, notes why labor unions find this regulation so appealing. Its supporters declare that national defense depends on both a strong navy and a healthy maritime industry, and that lifting such protections would result in significant job loss. However, what is good for overseas shipping is not necessarily good for the United States. The International Trade Commission discovered in 1995 that the Jones Act cost the U.S. $2.8 billion each year. Moreover, the restrictions caused ridiculous situations where lumber had to be trucked from Maine to Florida before it could then be sent to Puerto Rico by boat. The Jones Act has not stopped American generosity and trade, but it has certainly made both acts much harder. Even people given jobs by the U.S. maritime industry are hurt by rising gas and food prices from the $2.8 billion price tag.

Are these sacrifices worth enduring if the results lead to the survival of the shipbuilding industry? Linda Lingle, the former governor of Hawaii, believed that repealing the Jones Act would put American shipping companies out of business. But perhaps the Jones Act is not helping in that regard. Since 1946, the U.S. maritime industry removed roughly 2,000 vessels from its service, leaving it in 2007 with a fleet of fewer than 200. During that period of time, 200,000 jobs and 60 American shipyards were lost in the industry. According to the U.S. International Trade Commission, a “Jones Act repeal would affect about 2,450 laborers in the coastwise shipping trade and would cost only 36 jobs in the shipbuilding industry.”

Matthew Paxton, the president of the Shipbuilder’s Council of America, cannot deny the vestigial nature of the Jones Act even while defending it. Paxton explained to the Washington Examiner why labor unions support the Jones Act in September 2017. But he acknowledges that the shipbuilding business has shifted to Asian countries in the previous three decades. “The U.S. shipbuilders know they can’t compete fairly, so they rely on the federal government to keep this thing going,” said Paxton.

Ultimately, the Jones Act protects few jobs at the expense of the needs of the many. Richard Rowland, of the Grassroot Institute of Hawaii, states, “Greater competition in shipping would bring down prices and make the business climate more investor-friendly. Really, the only one being helped by the Act are the shipping interests.” If labor unions support the Jones Act for its protected jobs, then labor unions will have to question if Puerto Rico’s poverty is a fair cost.

– Nick Edinger

Photo: Flickr

Poverty in MoldovaIf ever there were a time capsule left in the world, it would be Moldova. Pictures of Moldovans in traditional clothes, locals driving horse-drawn carriages and a country dedicated to agriculture and the production of wine are among the first photos that come up in an image search. Though online photographs of Moldova are charming, poverty in Moldova has been a definitive characteristic of the nation since its independence from the Soviet Union in 1991. What was once a wealthy state became the poorest country in Europe after Soviet liberation.

The Statistics
According to The World Bank, Moldova has experienced economic growth and a significant poverty reduction since the start of the millennium.

Poverty in Moldova has dropped from 30 percent in 2006 to 9.6 percent in 2015. The percentage of those living on less than $1.90 a day has dropped from 39.1 percent in 1999 to zero. At its peak, the poverty rate for those living on $5 a day was at 90.4 percent in the year 2000. It has since dropped to 16.3 percent.

Remittance and pensions are responsible for lifting 51.6 percent of families out of poverty, and pensions are sustaining the aging population.

These two factors are acknowledged as the main drivers of economic growth. In fact, the Republic of Moldova is one of the few European countries that recognizes remittances as a main influencer of the economy, accounting for 26 percent of gross domestic product in 2014.

Challenges Halting Further Progress
Unfortunately, exporting labor leads to the issue of weak labor markets. Labor and demand are some of the challenges that plague Moldova and inhibit its economic progress, keeping poverty a constant.

Dependence on remittance weakens the industrial market and keeps the Moldovan economy in a cycle that increases the trade deficit and proves remittance to be untenable.

Despite an increase in those attaining higher education, younger generations are having a difficult time finding specialized occupations that are not farm-based. Post-secondary education is not a guarantee of a better job, as the business industry is not creating long-lasting positions and many firms do not typically subsist themselves.

Moving Forward
Improving the industrial state of affairs in the nation will continue to decrease poverty in Moldova.

Alex Kremer, the Country Manager for Moldova, told the World Bank that “urbanization, connectivity and off-farm jobs are the best escape routes from poverty”.

The United Nations Development Programme has innovative business development in place for local sustainable economic growth. This project is designed to facilitative innovative business development for new and existing businesses to generate internal economic development and growth in the job market.

So far, the program has already granted 83 private sector companies innovation awards and produced a campaign focused on the employability of Moldovan youth.

The initiative is scheduled to end in 2017, but with movements like this, the future of poverty in Moldova will surely improve.

Sloan Bousselaire

Photo: Flickr

 ChinaThree days after President Trump’s inauguration, he executed one of his major campaign promises: withdrawing the U.S. from the Trans-Pacific Partnership (TPP). Whether or not the TPP will outlast the U.S. withdrawal, China and fifteen other regional partners have forged ahead with a free-trade agreement of their own, the Regional Comprehensive Economic Partnership (RCEP).

One of the differences between the Trans-Pacific Partnership and the Regional Comprehensive Economic Partnership is that the former was slated to account for almost 40 percent of the world’s GDP and 10 percent of its population, while the latter comprises nearly 40 percent of GDP and almost half of the global population.

Many analysts have framed the differences between the TPP and the RCEP in terms of the balance of power between the U.S. and China, but for many of the countries involved, free trade is first and foremost an economic issue. Like most free-trade agreements, TPP and the RCEP center on tariff reductions. By liberalizing the international exchange of goods, many economists believe increased competition will stimulate growth in each country’s comparative advantage.

While the TPP aimed to remove tariffs completely on over 90 percent of traded goods, the Regional Comprehensive Economic Partnership attempts to merely reduce tariffs on only 80 percent of goods. The TPP also went further in attempting to curtail government-subsidized industrialization and implement environmental and labor regulations.

Despite the projected benefits for all countries involved, free trade agreements have been criticized for their potential harm to workers. Not only President Trump, but presidential candidate Bernie Sanders advocated for leaving the TPP. Senator Sanders held valid concerns about the continued widening of the international labor pool for American companies.

Indeed, despite the TPP’s projected contribution of 0.6 percent to U.S. GDP, this growth would have occurred in only the country’s comparatively advantageous sectors such as agriculture and advanced technologies, at the expense of every other sector. In the process, workers in less efficient sectors would experience displacement and, without a safety net, suffer in the near-term. On the flipside, the TPP would have contributed more than 10 percent GDP growth to countries like Vietnam and Malaysia, each willing to capitalize on their low labor costs.

In India, though, one of the potential signatories of RCEP, concerns about the displacement of its agriculture industry have slowed negotiations. The Indian parliament is hesitant to liberalize trade and capital flows for fear of allowing large agribusinesses to displace millions of small farmers. Though the end result of structural change may very well be improved efficiency and cheaper food, the transition will inevitably feature dispossession.

Despite minor setbacks, one of the final differences between the TPP and the RCEP is that the latter has a greater chance of coming to fruition. If it does, and only time will tell, economic integration will certainly bring growth, and disruption, to its signatories.

Nathaniel Sher

Photo: Flickr

Poverty in Uruguay

Within the past few decades, Uruguay—a small country with a population of about 3 million—has managed to reduce its moderate poverty rate from 25.5 percent in 1989 to 12.4 percent in 2012, and the extreme poverty rate from 3.3 percent to 0.5 percent over the same period. Because of the great reduction of poverty in Uruguay, the nation’s Human Development Index ranking is ever increasing, and it is seeing longer life expectancy and greater birth rates.

However, despite improved conditions for citizens of Uruguay, there is still anxiety among community members due to a long embedded history of fluctuations in the economy and government that have contributed to poverty-like phases for many. The last 40 years have been illustrated by a slow-moving economy, one that is not quick to adapt to change, but with moments of remarkable growth. Uruguay is uniquely addressing its poverty issues, some with successful outcomes and others with less positive consequences. Here are three ways poverty in Uruguay is being tackled.

  1. Economy
    Uruguay has been relatively successful in ramping up economic development, which has seemed to keep up with globalization. Gross Domestic Product increases in the late 80s have been able to sustain Uruguay through some economic downturns in recent history. This, coupled with social reform, is keeping extreme poverty low.
  2. Social Integration
    Uruguay still experiences marginalization and social disintegration, but has taken initiatives in the last few decades to bring these issues to public view. It has been argued that education is a key element is bringing many different demographics of people together and enabling students and families to take charge of their lives. From the early 90s to the present, referendums have been drafted regarding education and social reform as well as being a topic for political platforms.
  3. The Work Force
    Women have become more of a present figure in the job market, having the highest rate of participation in labor in Latin America. While the amount of active workers is higher than it has ever been, Uruguay still has relatively high unemployment rates. However, the Uruguay legal system is working toward slimming the gap between wage discrimination and job security rights among its citizens.

While Uruguayans are working toward a more stable economy and social reforms, there is clearly still some way to go. But, despite slow moving and small-scale changes, Uruguay is a positive example of poverty reduction efforts and there is growing hope for change in the South American nation.

Casey Hess

Photo: Flickr

Minimum Wage in MexicoThe second round of NAFTA renegotiations closed Sept. 5 with major disagreements between the three countries left unresolved. The A.F.L.-C.I.O. has pushed U.S. negotiators to introduce a provision guaranteeing a living wage for all workers in the U.S., Canada and Mexico. A higher minimum wage in Mexico would greatly impact the country’s businesses that profit from the cheap labor supply.

Gerardo Gutierrez Candiani, head of Mexico’s special economic zones, told U.S. and Canadian negotiators that Mexico will not adjust its current labor laws. Stricter labor standards is a U.S. priority in the trade renegotiation.

Mexico’s low wages give the country a competitive advantage over its NAFTA trading partners. A higher minimum wage in Mexico could protect U.S. producers by forcing Mexican competitors to raise prices in response to domestic wage increases. The minimum wage in Mexico is 80 pesos a day ($4.50).

Mexican political and corporate leaders support a low minimum wage as a way to encourage businesses to move operations into the country. Corporations located in Mexico can keep production costs low by utilizing the country’s cheap labor supply. These businesses can then undercut their competitors on foreign markets.

Mexico’s automobile industry is the main source of the country’s trade surplus with the U.S. Mexican auto workers earn, on average, $6 an hour while U.S. auto workers earn $28 an hour. Closing the wage gap between the two countries would make U.S. automobile manufacturers more competitive in the international market.

In addition to a higher minimum wage in Mexico, the U.S. is also likely to push for worker protections like the right to unionize and strike. Mexico has some worker protection laws in place, but existing policies are loosely enforced. Workers who push for higher wages or improved conditions by participating in strikes are usually fired. Existing labor unions are ineffective negotiators because leaders are often chosen by political officials through rigged elections.

Opponents to new labor laws fear that rising wages will halt economic development as businesses leave for countries with cheaper labor. They argue that Mexico’s competitive advantage over the U.S. and Canada will disappear naturally as the country undergoes economic growth.

Despite Mexican officials’ resistance, the U.S. remains focused on including better worker standards in the trade pact’s renegotiation. The proposed policy has the potential to significantly improve the standard of living for the average Mexican citizen.

Katherine Parks

Photo: Flickr

Brain Drain in India
There is a common joke in Silicon Valley that the most spoken languages are Hindi and Telugu. Like many common jokes, this one reveals a staggering truth: nearly 60 percent of the engineers in Silicon Valley are of Indian origin. Over the past two decades, high-skilled migration has brought dramatic innovations to the American Information Technology (IT) sector, while leading to what some commentators have called the brain drain in India and other developing countries.

In 1990, as the American IT sector began to boom, Congress passed the H-1B program, granting visas to thousands of foreign nationals in “specialty occupations.”

A recent article published in India’s The Quint claims, “[the brain drain in India] adversely affects the quality and quantity of human capital formation, which is the bedrock of modern economic development.”

Although this is a common contention, it is far from correct.

A recent study published by the Center for Global Development suggests, “better-paid jobs [in the U.S.] incentivize [Indian] students to choose certain majors and supply a highly-educated workforce to Indian firms.” Thus, at the same time as thousands of high-skilled Indians emigrate to the U.S. every year, thousands more acquire STEM degrees in India and never leave. As for those that do find higher-paying jobs abroad, many eventually return to India when their visas expire.

Because of this, between 1998 and 2012, the Indian IT sector grew from 1.2 percent of GDP to over 7.5 percent. By the mid-2000s, India had surpassed the U.S. as the largest exporter of software.

Far from producing a brain drain in India, Gaurav Khanna and Nicolas Morales’ study finds that the American H-1B program not only correlated with the birth of India’s IT sector but also caused a “reverse brain drain” in India.

While some have wrongly criticized the H-1B program for hurting developing economies, others have argued that free movement of labor has imposed downward pressure on American workers’ wages.

A recent article in the Huffington Post suggests that H-1B visas only benefit American tech companies that “want to hire cheap, immobile labor—i.e. foreign workers.”

Although high-skilled migration has certainly led to wage stagnation for certain occupations in the U.S., Khanna and Morales find that the influx of Indian workers has simultaneously motivated many American students to attain even more specialized degrees that lead to even higher paying jobs.

In the end, the new study released by the Center for Global development offers much-needed clarity about the complicated subject of labor migration. Overall, it finds that high-skilled migration is something to be encouraged rather than banned. Indeed, the free movement skilled labor has been proven to bring mutual benefits to both the American and Indian economies.

Nathaniel Sher

Photo: Google