A Closer Look

From Temporary Foreign Workers to Permanent Residents – The two step process presents both advantages and risks

In a two-step immigration selection process, temporary foreign workers are first selected by employers for a temporary job, and some qualified temporary foreign workers then become economic immigrants. The details of this selection process vary among countries. For example, in the US, the temporary workers are typically sponsored by the employers in their bid to become permanent residents. In Canada, the temporary residents are selected for permanent residency by the government based on a set of largely human capital criteria, although employers may play a role in some selection pathways. Viewed in a generic manner, the two step process presents both advantages and risks. This article provides an overview of such potential advantages and risks. It is the first of five articles on the two-step selection process.

The Canadian and international experiences suggest that two-step immigration selection can have significant advantages over selecting economic immigrants directly from abroad. Immigrants who go through two-step selection tend to have higher initial employment rates and earnings than immigrants who do not have work experience in the receiving-country labour market. This advantage likely persists in the longer run as well, although the research is not definitive. Two‑step selection can improve the match between immigrant skills and labour market demands because employers can directly assess temporary foreign workers’ skills and intangible qualities, while foreign workers can test out life in the receiving country before deciding whether to seek permanent residency. Immigrants who performed well as temporary foreign workers are unlikely to face the same difficulty with the portability of their human capital as immigrants without receiving-country experience. The two-step immigration process can be an efficient avenue to fill a specific regional labour market need, and contribute to the economic development and population growth in local communities outside of major metropolitan areas.

If employers are given a predominant role in the two-step immigration process, there is a risk temporary foreign workers may be subject to poor working conditions, including being underpaid, excessive working hours, and unsafe workplaces. A large pool of temporary foreign workers may raise complications such as the potential to displace domestic workers and to put downward pressure on the wages of domestic workers. Relying on temporary residents with a pathway to transition to permanent residency may reduce incentives for employers and governments to strengthen education and training systems for domestic workers. Most importantly, employers in search of low-cost labour may prioritize short-term demand over longer-term competitiveness, and thus employer-sponsored programs are not effective in addressing the long-term needs of the labour market and broader economy.

Some potential risks associated with dependence on temporary foreign workers are exacerbated during the present COVID-19 pandemic. For instance, the crop production and horticulture industries, where seasonal foreign agricultural workers accounted for over one-fifth of the workforce in recent years, face serious uncertainty as the inflow of temporary foreign workers is disrupted due to travel restrictions in some source countries and the mandatory 14-day self‑isolation requirement upon arrival (Lu 2020). In other words, the established reliance on temporary foreign workers in these industries could ultimately test the stability of Canada’s food supply chain through labour shortages and wasted crops. At the same time, some temporary foreign workers continue to work on the front lines of the COVID-19 pandemic, employed at meat processing plants or as caregivers, orderlies, and security agents. While they are doing the jobs essential in society’s response to the pandemic, they put themselves at risk for exposure to virus infection. Temporary foreign workers are also over-represented in some hard-hit industries, including accommodation and food services, and personal and private household services. The closure of businesses or limited operations in these industries led to massive layoffs or reduced working hours among temporary foreign workers.

Compared with the US employer-sponsored economic immigration selection system, Canada’s two-step selection process limits the role of the employer to the first step – the selection of temporary foreign workers in their initial job placement, while maintaining government’s control in the second step – the selection of economic immigrants from among temporary foreign workers. In this sense, the Canadian system has a built-in mechanism to mitigate some of the potential risks associated with employer-selection.

Chosen excerpts by Job Market Monitor. Read the whole story @ Two-step Immigration Selection: A Review of Benefits and Potential Challenges

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