In a commencement address at the University of Baltimore on Monday, Federal Reserve Chair Janet Yellen told graduates that they were entering the strongest job market in nearly ten years, but that technology and globalization were making it more essential than ever to complete college and pursue graduate education in order to compete, the Baltimore Sun reports:
“Economists are not certain about many things. But we are quite certain that a college diploma or an advanced degree is a key to economic success,” Yellen said in remarks at the commencement[.] … People with a college degree are more likely to find a job, keep it and earn a higher salary, she said.
Yellen said the increasing demand for people with college and graduate degrees reflected the need for higher technological skills and the impact of globalization, which allows goods and services to be produced anywhere. She said those trends are likely to continue. …
Yellen also noted the widening wage gap between workers with college degrees and those with a high school diploma. Annual earnings for college graduates last year were on average 70 percent higher than those with only a high school diploma. In 1980, that difference was only 20 percent, she said.
Yellen’s comments concur with several recent reports on the entry-level job market showing that recent college graduates enjoyed the best job prospects and starting salaries since the Great Recession, though at least one analysis has warned that too many graduates are underemployed, working in roles that don’t require a degree.
Foreign-born workers make up over 16 percent of the US labor force, totaling 26.3 million people, including both legally permitted and undocumented immigrants. During his campaign, president-elect Donald Trump vowed to crack down sharply on illegal immigration, with pledges to build a wall along the US-Mexico border and to establish a nationwide deportation force to remove an estimated 11 million undocumented immigrants from the US.
One way Trump’s immigration policy may affect employers is if they employ beneficiaries of the Deferred Action for Childhood Arrivals (DACA) program, which President Barack Obama established in 2012 and which is among the many executive actions of the Obama administration Trump has said he would undo. These employees, SHRM’s Roy Maurer explains, will lose their authorization to work if the program is canceled:
DACA granted reprieve from deportation and provided work authorization to more than 740,000 young people whose families brought them to the U.S. as children. Trump also promised to end a 2014 expansion of that program to many parents of U.S. citizens and permanent residents that was held up in court and never implemented.
“Employers should be prepared for their employees to lose their work permits, if they were granted under the DACA program,” Stock said. Employers are not normally required to re-verify employment eligibility during the validity period of a worker’s employment authorization but would be required to terminate any DACA workers once they had “actual or constructive knowledge” that the employee had lost his or her work permission, he explained.
While the undocumented population is the main target of Trump’s immigration proposals, he has also criticized US businesses for outsourcing work abroad and using the H-1B skilled worker visa program to fill roles in the US with immigrants rather than US citizens. This is the main reason why Trump’s victory in the presidential race makes some Silicon Valley leaders nervous. The high-tech sector has relied heavily on access to a global market for tech talent, and more restrictive immigration policies could make it harder for those companies (but not only them) to acquire the highly skilled employees they need. As The Verge‘s Nick Statt explains, immigrants are also a key part of Silicon Valley’s self-identity:
Wired’s Davy Alba explores how Donald Trump’s incoming presidential administration could change the way Silicon Valley operates:
Never mind the fact that Trump’s own companies manufacture thousands of items overseas. “We’re going to get Apple to built their damn computers and things in this country instead of in other countries,” he promised at Liberty University as early as January, a commitment he repeated at other events. His position: punish companies that offshore production by placing tariffs on their imports back to the US.
The problem is that, at least in Apple’s case, forcing adherence to this policy would be both logistically impossible and economically disastrous. Forcing Apple to produce the iPhone in the US would make the device so wildly expensive that it would become less competitive with foreign competitors like Samsung. And with shrunken margins, Apple would have to look for other places to cut down on expenses—including scaling back corporate operations or closing retail locations, which already employ thousands of Americans—jobs at home Trump purportedly hopes to save.
Trump’s immigration policy also has implications for the tech sector. The president-elect campaigned on a promise to severely tighten immigration, including a sharp reduction in the number of H-1B visas issued for skilled foreign workers, but as Alba notes, Trump has gone back and forth on that program and what policy his administration ultimately settles on remains uncertain.
Another potential point of impact is on the gig economy. According to New York University business professor Arun Sundararajan, Trump’s preferred policies could limit the growth of the type of flexible, on-demand jobs that companies like Uber and Lyft provide:
The theme of the 2015-16 Global Talent Competitiveness Index, “Talent Attraction and Mobility,” illustrates the growing importance of internationally mobile talent to the global economy. The index, a joint production of INSEAD, Adecco, and Singapore’s Human Capital Leadership Institute, was released on Tuesday to coincide with the World Economic Forum in Davos. The United States ranked fourth among the 109 countries included in the index, after Switzerland, Singapore, and Luxembourg. Rounding out the top ten are four Scandinavian countries, Canada, and the United Kingdom. Major developing economies like Brazil, India, and South Africa declined in the rankings, but China held up well, as INSEAD’s Paul Evans and Bruno Lanvin note in a blog post discussing the report’s findings:
Indeed multinational corporations are moving more of their R&D and product development centres to China, Vietnam, South Korea and India because innovative talent is there —at a lower cost. While migrants typically go to where jobs are, jobs are increasingly going to where talent is.
In a world where millions of people are pulling up stakes for a variety of reasons good and bad, Evans and Lanvin stress that a country’s competitiveness (and, one can interpolate, a company’s) depends significantly on its ability to harness the movement of skilled labor across borders. They point out that Switzerland and Singapore both have large immigrant populations, as do other major economies in the top 20 such as the US, Canada, Ireland, Australia, and New Zealand. Another one of their key findings this year is that “brain drain” seems to be a thing of the past. The new trend, they write, is “brain circulation”: