Time for an enlightened look at foreigners and jobs

After another weak set of jobs figures this week showing formalsector employment sliding in the third quarter, it may be worth looking at a little-noticed report that the World Bank released last month which dispels myths about immigrants and jobs. The title “Mixed Migration, Forced Displacement and Job Outcomes in SA” shows that far from stealing jobs from South Africans, each migrant in SA creates two jobs for locals. The study for the period 1996 to 2011 that “immigration has a positive impact on local employment, labour earnings and wages”, with a 1% increase in the number of immigrants raising local employment by 0.2%.

One reason for the positive impact, the report suggests, is that immigrants may be specialised in different tasks so they don’t necessarily compete for similar jobs with locals, and adding them to the mix raises productivity overall, benefiting the whole economy. Another reason is that immigrants are nearly twice as likely to be employed as locals, possibly reflecting demand for the skills they bring, and this has multiplier effects for the economy. Immigrants tend to be more entrepreneurial, so they are likely to promote economic growth and are more likely to be self-employed, with, for example, self-employment accounting for 25% of their jobs against 16% for locals.

The report acknowledges the study is based on historical data and has limitations. But if it’s even partly right, the implication is SA should be opening its borders to migrants, particularly if they are skilled and entrepreneurs. But are SA’s regulations enabling that? There’s anecdotal evidence that it’s harder than ever to get skilled people in, never mind those lower down the scale. Revising visa requirements for highly-skilled foreigners was one of the growth-enhancing measures included in President Cyril Ramaphosa’s economic recovery plan, though the focus of the promised visa changes was mainly on tourism. There is a new and improved critical skills list circulating, though immigration experts say the absence of categories for managerial skills remains problematic.

The alternative of a general work visa is onerous. Nor does SA’s visa regime provide much help to SA’s supposed efforts to drive jobs and growth by positioning itself as a “hub” for Africa and attracting regional head offices of multinationals. Many countries allow multinationals to shift high-level people as they need. Here, intra-company visa rules limit the years a multinational executive can stay and insist a local be trained to replace her or him.

Says Deloitte director Lino de Ponte: “Everyone is competing for head offices because people understand the ecosystem these create and the multiplier effect they have for the economy, but SA is missing out on the opportunity for some quick wins.” Where SA does theoretically score is its visa regime makes it exceptionally easy for ‘financially independent’ people with R12m or more and those who are self-employed who can invest at least R5m to live in SA.

De Ponte believes the leadership of Home Affairs is constructive and argues SA’s visa system isn’t any worse or better than others.

Clearly, however, SA’s unemployment problem is a lot worse than most other countries and it needs to look at any and all policy interventions that will make it easier to create jobs, immigration policy among these.

SA should be opening its borders to migrants, particularly the skilled and entrepreneurs