New immigrants 3.2 times more likely to be poor

But professor puts blame on poor English skills, not credential recognition

New immigrants’ poor English skills, not a lack of credential recognition, might account for much of the earnings gap between recent immigrants and native-born Canadians, says a University of British Columbia professor.

David Green, a professor of economics, examined data from Statistics Canada literacy surveys and discovered that the earnings differential between immigrant and native-born Canadians with university degrees almost disappears when they have the same literacy score.

“As far as we can tell, quite a large portion of that difference is not a credential recognition problem. It’s the fact immigrants don’t have the same literacy skills in English as the native born,” said Green.

Another reason why new immigrants earn less than native-born Canadians is the complete lack of recognition of foreign experience by employers, said Green.

“It’s like you’ve never worked before in your occupation,” he said. “There’s some ability to get your experience recognized if you come from the United States or Europe, but not if you come from other places.”

Unfortunately, the economic fortunes of new immigrants are deteriorating, according to a new Statistics Canada report.

The likelihood of a new immigrant being in the low income class, defined as having family income below 50 per cent of the median income of the total population, has increased in the past decade, despite the fact immigrants entering Canada are better educated than they were before 1993.

The report, Chronic Low Income and Low-Income Dynamics Among Recent Immigrants, found that in 2004, low-income rates among immigrants during their first year in Canada were 3.2 times higher than those of native-born Canadians. In the 1990s, the difference was never more than three times.

“We were hoping that the low income rate would have fallen since 2000,” said Garnett Picot, the report’s author. “The lack of improvement post 2000 was pretty widespread across all age groups and virtually all education groups.”

The probability of a new immigrant having low income ranged from 34 to 46 per cent, depending on the year of arrival. However, if a new immigrant manages to not enter the low-income range during his first year in Canada, the probability that he will end up experiencing low income falls to 10 per cent or less.

The big drop in risk for low income after the first year surprised Picot. However, the results made sense.

“The people who are going to enter low income are going to most likely enter it right off the bat. People who come here who maybe have a pre-arranged job or have skills that are highly in demand at that particular time are going to get a job and they’re probably not going to fall into low income. Those who come here with language issues, maybe no contacts, no pre-arranged jobs, are probably going to have more trouble in the first year,” he said.

New immigrants’ earnings have been dropping since the 1980s, with each successive group of immigrants starting with lower earnings than the group before, according to Green’s research. Also, their earnings weren’t growing as fast as those of immigrants who came to Canada before 1980.

One reason new immigrants earn less today than before 1980 is that all new entrants to the labour market are earning less. A native-born Canadian starting a job in the early 1980s would have started at 20 to 30 per cent higher than a native-born Canadian starting after 2000, said Green.

However, while new immigrants today still earn less in their first few years than immigrants who came before, their earnings are increasing faster than immigrants who came to Canada in the 1980s, said Green.

“There’s a lot more catch up than there used to be,” he said.

The shift away from immigrants coming from the U.S. and northern or western Europe accounts for much of this drop in earnings, said Green. Part of that can be explained by the language difficulties immigrants from these new source countries might have. Then as they improve their literacy, their earnings would increase, which would account for the catch up Green has found.

However, Green’s research doesn’t offer all the answers as to why immigrants continue to earn less than native-born Canadians and Picot hopes the latest Statistics Canada report will spark more interest in the issue.

“There are some answers out there now, but I would say there’s still a significant puzzle,” he said.

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