Immigrants do not do as well as Canadian born individuals in terms of income and educational employment. This paper seeks to prove this statement and give reasons and examples to justify the fact that most immigrants in Canada and other parts of the world do not get equal treatment similar to native citizens of host countries. In 2006, a census revealed that at least one out of five Canadian citizens was an immigrant. The number of immigrants who were born in Asian countries was recorded at 40.8% while 61.6% were from Europe (Ferrer, Green, and Riddell, 387). These statistics also revealed that most of the immigrants do not have English or French as their first language. According to research by Ferrer, Green, and Riddell immigrants who moved to Canada by 1990s were paid a compensation of 30% less than their fellow Canadian-born workers.
From historical facts, immigrants were paid equally or almost equally to native in a host nation. However, in recent years the differences have widened due to economic, political, or social factors. In the 1970s, immigrants from other countries irrespective of their mother nations were paid an equal amount as native Canadians. More than two-thirds of the immigrants who came to Canada were from the neighboring countries of the United States and Western Europe. Ferrer, Green, and Riddell (390), claim that most of the long term immigrants who have acquired university degrees land on jobs that require low education qualifications such as salespeople, clerks, taxi drives, and cashiers. The census also revealed that there was a widening gap between the income earnings of immigrants and Canadian born citizen workers from 1980 when the majority of recently migrated Canadian employees would earn more than 85 cents for every dollar that was received by born citizens. However, in 2005, the ratio had declined to 63 cents per dollar (Ferrer, Green, and Riddell, 389).
The reasons argued for the presence of disparity in the fact that immigrants earn less compared to their born-in Canada counterparts in similar jobs with the same level of education and experience can be verified (Galarneau, Diane, and Morissette). One of the reasons is based on the principle of specificity of human capital that claims that skills and training acquired from a source country cannot be easily transferred directly to a host nation where the immigrant lives leading to well-qualified and experienced workers landing on low-paying jobs (Ferrer, Green, and Riddell, 389). On the other hand, the disparity in income earning between the two classes can be attributed to discrimination of immigrants by employers in the host country who tend to pay less to immigrant workers while paying well and fairly to equally qualified Canadian-born workers. By measuring the immigrants’ literacy skills and comparing them with born-citizens in Canada, the relationship between the low-earnings and the skills can be established to understand the basis of such disparity. However, standard demographics have to be incorporated into the analysis together with information that relates to immigrants’ source of education and age of migration to determine the immigrant/Canadian-born citizen income earning differentials (Strobl, Eric, and Walsh).
Another reason for wage disparities between immigrants and natives include the differences in the level of skills that affect the way immigrants are recognized in the host country’s labor market in terms of earnings about the recognition of native Canadian workers. According to Gao and Jingwen “the positive impact of education on earnings is reduced by 10% to 20% for Canadian born citizens, and by substantially more for foreign-educated immigrants.” Alves Mello and Daniela’s research found out that the average differential earning of immigrants who have completed high school education and Canadian-born is from around 13 to 16%. The differential incomes turn the immigrants’ earnings of 11% disadvantage into a five percent advantage raising the advantage of immigrant high-school educated women to more than three times the magnitude of their native Canadian counterparts. The changes of the earnings differential also lead to a reduction in the earning among those who immigrants have completed university studies and eliminate a 19% disadvantage among female university graduates.
The level of education offered in Asian countries is often valued less than South American, Eastern Europe, and African education (Galarneau, Diane, and Morissette). However, education from these countries is also less valued in the United States, Oceania, and the nations of the rest of Europe. The basis of these comparisons is based on the principle that native countries fix their academic and educational co-efficient that often determine the wage gap between natives and immigrants. Since the current population of immigrants in Canada is estimated to be 20%, there is need to assimilate them into the nation’s labor market and reduce the wage gap (Strobl, Eric, and Walsh).
By finding out whether immigrants had academic qualifications as their native fellows the fact that immigrants may not receive better education employment can be ascertained. Statistics revealed that 31% of immigrant males in Canada had completed a university degree as compared to 18% of men born in Canada. Similarly, it was proven that 21% of immigrant women had a university degree compared to 17% of Canadian-born women. In a study conducted by Ferrer, Green, and Riddell discovered that men and women born in Canada had a significantly higher level of prose and document literacy, problem-solving skills, and numerical skills than immigrants. However, there were significant differences between immigrants who acquire their education in Canada and those who studied abroad. The effect of education and work experience of immigrants on their earnings was also evaluated by Ferrer, Green, and Riddell to prove that their incomes were less than 50% of the income obtained by those born in Canada.
According to Fortin, Lemieux, and Torres (111), immigrants do not receive lower returns for their skills in the labor markets of Canada compared to their counterparts born in Canada. From their research, male immigrants accept a high return for their services up to 37% when associated with a 100-point increment of their skills. On the other hand, native Canadians had a gain of at least 24% of the return on the improvement of their abilities. Indigenous Canadian women with equal skills as immigrants were estimated at 28%. Fortin, Lemieux, and Torres developed a general monopsony that showed how migration could lead to an increase in the minimum wage in educational employment. Hence it is likely that migrants will be paid better if firms are experiencing constraints of a labor supply curve.
In conclusion, the gap in income earning between immigrants and born-in-Canada workers is the inability to transfer human capital from one country to another since there exists differences in skills and education between different nations. Immigrants who completed their studies before arriving in Canada were discovered to receive higher compensation for their skills than Canadian-born workers. However, their returns on formal education and cases involving the control of powers were lower. Since human resource capital identification problem causes more than 70% of the immigrant and native wage differences, the appreciation of human skills and experience of workers can be used to determine the amount of pay and promotion to be offered to both immigrants and Canadian –born workers.
Alves Mello, Daniela. “Wage gap between immigrants and Canadian-born: The impact of immigration status and post-secondary education.” (2015).
Ferrer, Ana, David A. Green, and W. Craig Riddell. “The effect of literacy on immigrant earnings.” Journal of Human Resources 41.2 (2006): 380-410.
Fortin, Nicole, Thomas Lemieux, and Javier Torres. “Foreign human capital and the earnings gap between immigrants and Canadian-born workers.” Labour Economics 41 (2016): 104-119.
Galarneau, Diane, and René Morissette. Immigrants’ education and required job skills. Ottawa, ON: Statistics Canada, 2008.
Gao, Jingwen. “Place of Birth, Location of Study and Immigrants’ Relative Earnings.” (2013).
Strobl, Eric, and Frank Walsh. “Monopsony, minimum wages and migration.” Labour Economics 42 (2016): 221-237.