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The economic case for taking in refugees
Apr 19, 2022
Episode 645

The economic case for taking in refugees

What happens when they enter the economy.

The U.S. has a long history of resettling refugees who are fleeing war and persecution. The current program goes back to the ’80s, after the Vietnam War.

Today, as the Joe Biden administration prepares to welcome 100,000 refugees from Ukraine, we’re wondering what happens to an economy when refugees become part of it.

“Refugees themselves are doing all they can to integrate into the economic system,” said Ramya Vijaya, a professor of economics at Stockton University. “A lot of them are working in what we now understand to be sort of front-line essential jobs … either caregiving, home health care, personal aid … all of which are so critical to keep our economy going.”

On the show today: the costs associated with refugee resettlement along with the contributions refugees make to our economy and why arguments about their being a drag on the labor force are overblown.

In the News Fix, we’ll talk about why investment firm Blackstone is betting on student housing, even after a couple of years of remote learning. Plus, the story behind right-wing social media account Libs of TikTok.

Later, a rooster makes a cameo on the show (see if you can spot it), and Kai and Amy give a listener career advice.

Here’s everything we talked about today:

Join us tomorrow for Whaddya Wanna Know Wednesday. There’s still time to submit questions at makemesmart@marketplace.org or (508) 827-6278, also conveniently known as 508-UB-SMART.

Make Me Smart April 20, 2022 transcript

Note: Marketplace podcasts are meant to be heard, with emphasis, tone and audio elements a transcript can’t capture. Transcripts are generated using a combination of automated software and human transcribers, and may contain errors. Please check the corresponding audio before quoting it

Amy Scott: Hey everybody. I’m Amy Scott, welcome back to Make Me Smart, where none of us is as smart as all of us.

Kai Ryssdal:  I’m Kai Ryssdal. It is Tuesday as we tape this, it is time for our weekly deep dive into a single topic today, refugee resettlement, the economics thereof, in the United States. There is, of course, a long history of resettling people here who have been fleeing war and persecution started for real sort of after the Second World War. And then after Vietnam, officially, the government decided it was going to do something about it in the Refugee Resettlement Act of 1980. I guess. And and we’re going to talk about that a little bit.

Amy Scott: Yeah. Since then, the US has resettled hundreds of thousands of refugees across the country, the Biden administration has said it’s going to welcome 100,000 refugees of the war in Ukraine. And he’s talking about a new program to expedite that process.

Kai Ryssdal: So the question for us today is what happens to an economy when refugees become part of it. And here to make a smart is Ramya Vijaya. She’s a professor of economics at Stockton University. Professor, thanks for coming on the pod.

Ramya Vijaya: Thank you for having me.

Kai Ryssdal: So I’m going to – I’m going to lead with the big picture question. And then we can sort of tear it apart what generally speaking does happen when refugees come into an economy?

Ramya Vijaya: So just at the outset, I just want to emphasize that of course, refugee resettlement is a humanitarian imperative. But of course, refugees also bring with them tremendous economic potential, as well as economic aspirations just like everyone else. And that needs to be recognized. So when refugees arrive in the US economy, the US model of refugee resettlement assigns them to contract agencies that are called resettlement agencies. So they’re typically given an initial allowance of about $2,000, it differs by state. And that is meant for the initial phase when they enter into the country, getting them a place to stay, setting them up with a very basic household products and goods to start their lives. The resettlement agencies, of course, augment this with some private donations. So you might have known in your community where you can donate for refugee resettlement, so these resources are extra. But the main focus of the US refugee resettlement program is to just get them self sufficient as soon as possible. So they have three months –

Amy Scott: Can I just jump in here real quick, professor? $2,000 I mean, in this economy, it just doesn’t seem like very much. And you said it’s, it’s often supplemented, but I mean, is that enough to really get a foothold here?

Ramya Vijaya: Absolutely. So you absolutely pointed out the right. problem here is that refugee resettlement contrary to what people think actually offers very, very limited resources to the refugees themselves. So $2,000 doesn’t go very far at all, if you think about even just making a deposit on a rental place, right? Typically, a lot of these refugee resettlement areas are also urban areas. So it is really a bare minimum start, which is why a lot of the resettlement agencies asked for private contributions. Now, those are not very dependable, neither are they substantial, because it really depends on getting the word out and getting the community involved. And of course, refugees are coming in staggered time. So the support that is really can be counted on is just the $2,000. And more. And even beyond that, if they just get three months of support by the refugee resettlement agencies after that they’re pretty much on their own. So they have to learn the system, they have to learn the life, the community, as well as find jobs within the three month period. So that is the aim.

Kai Ryssdal: How well does it how well does it work? That’s fundamentally question, how do you get to $1,000? And then you get some help from private agencies? What’s our success rate, I guess, if you will.

Ramya Vijaya: So in the three months, there is a rigorous program to train them to give them the basic information. So some of the refugee resettlement agencies that I have been in touch with in Philadelphia, for example, they indicate that they have about an 80% success rate that is they’re able to match refugees with with some very basic job, make themselves sufficient, or at least enough to pay, to pay for their accommodation, the basic survival, so the success rate seems to be fairly high.

Amy Scott: I imagined the skill level really varies. What kinds of training and job placement do they have? And do they tend to be matched with jobs that match their skill level?

Ramya Vijaya: That’s very important question. Of course, the skill level varies greatly. One thing to keep in mind here is that even if refugees are coming in at a high level of skills, let’s say that they are college educated refugees had professional jobs. But some of those qualifications don’t necessarily transfer over here. So that is a big roadblock, often refugees encounter. So many of them start out with fairly low skilled jobs that there that they’re able to find, and they’re matched with by the resettlement agencies. So the training that they receive is basic introductory level. But it really depends on where the refugees are coming from and what skill levels they’re bringing with them. It’s also important to note that the refugee resettlement program is very intensive, just to be selected for resettlement in the US is a very intense – time intensive process, often refugees spent close to ten or more years in a refugee camp before arriving here. So during that period of time, they have lost some of their jobs skills or the continued deal with employment. So that again, makes it hard in the initial years to perhaps match up with the skill levels that they might bring.

Kai Ryssdal: And then of course, what happens is the economic gain that refugees bring, right, because this is fundamentally a labor force problem, right? Immigration is a labor force issue, the economic benefits that you get from increased population working, take time, right, and there’s a drag, and that becomes then the political issue, right, that short term, oh, my God, they’re a cost to this society. And then you wait five years, and they’ve got good, productive jobs.

Ramya Vijaya: That’s, of course, also, I would say, a perception problem, because as we just discussed, they’re actually not taking a whole lot. It just it’s an initial resettlement allowance that is very, very small. Those who do not match with the jobs in the three months are allowed a very small amount called refugee cash allowance for the next eight months. That varies by state that’s a little less than $300. So really, they’re not taking a lot at all from the economic system. And a lot of research has shown that their period of time is very short, by which time they sort of make up their labor force lag. So in my own research in Philadelphia, I found that within about seven years, they are outpacing a comparable local median income levels or even a labor force participation rates. Nationally, several research, including my own has shown that within about six to seven year time period, they’re really able to catch up in terms of their labor force engagement. So they’re out there. In fact, the labor force engagement, participation of rates of refugees in many researchers whp want to be over 60%. On an average for the US economy labor force, participation rates are a little less than 60%. So refugees themselves are doing all they can to integrate into the economic system. One other thing that I would note here is that a lot of them are working in what we now I understand to be sort of frontline essential jobs. The lot of the jobs are in either caregiving, so home health care, personal aid. And the other big area where refugees tend to be matched is the meatpacking and processing, all of which, you know, we’ve heard in the last few years are so critical to keep our economy going. And as for the perception problem, I also want to add that if we think about the refugee numbers, over the years, they are really a tiny amount of the total number of the labor force in the US think of a labor force around 160 million, the refugee population each year is is close to that those resettled is only about 20,000. So the numbers just don’t make sense for us to say that they’re a drag on the labor force.

Amy Scott: And generally, the research has shown that they are giving a lot more to the economy  then taking right. Their contribution is much larger.

Ramya Vijaya: Yeah, that’s a complex question. But yes, if they’re already in the labor force and and performing critical jobs, that is certainly a contribution. Besides that, of course, they are here. So they’re bringing their own demand. They’re buying products in the economic system. So they’ve been – they have shown that in a lot of the small, declining industrial towns, they really reverse that population loss and really revived downtown communities. For example, there are well known stories about Buffalo or Utica, New York, even in the southeast corridor in Philadephia where they have really revived, you know, foot traffic and neighborhoods so being here and not only working but also contributing to the economic ecosystem is only a positive economic contribution.

Amy Scott: I’m thinking of Erie, Pennsylvania, right Kai, where you and I have done some reporting.

Kai Ryssdal: We’ve both worked in Erie, Pennsylvania. And that economy, as as we’ve talked about on Marketplace is hugely dependent upon the refugee and immigrant population. But look, professor, let me ask you this. Just just to get down to brass tacks, right. We have 70,000, give or take Afghan refugees that are in the resettlement process. The president, as Amy mentioned, has promised to take 100,000 Ukrainians, we are a labor force of 160 million people. Is that a lot? 170 million people coming into this economy.

Ramya Vijaya: That’s just basic numbers. That’s a very tiny amount, right? If there are 170,000 – you also have to remember that this entry will be staggered. Although the president has said he will be taking in 100,000 Ukrainians and they have said that they will find a way to accelerate the program. As I mentioned, that has not happened in the past. Even though the numbers are declared today. Refugees take – just the vetting process for refugees take a long time. So we may not see this entire amount arrive at the same time, they’ll probably arrive over the next decade or so. That is the reality of refugee resettlement. But even otherwise, the numbers are really a tiny fraction of the full labor force. And they will go to, as I said, different communities in the US, they’re not all being, you know, put into the same community. So the the, if the effective impact is really, really very tiny. And the US labor market has much more dynamic impacts than this, these refugee numbers, which are really, really a small amount here.

Amy Scott: Let’s talk about a different market, though, which is housing. I mean, we’re in a huge national housing shortage. And here in the Baltimore area, I know that’s been a real challenge and resettling the Afghan evacuees who’ve been coming here since the summer, late summer, you know, just finding a permanent place for folks to live. And I’m wondering if we can absorb this additional population? In that sense?

Ramya Vijaya: Yes, truly, housing is a big issue. It’s the same story here in Philadelphia, but just the stock of affordable housing in the city is very limited. But again, as just as I said about the diverse impacts on the US labor market over the past 20, 30 years, that is the same thing for the housing infrastructure. It is not just a problem for refugees, neither is the problem created by the refugees, right? It is – we do have a housing shortage, particularly supply of affordable housing. And that has a lot to do with the fact that there is a tremendous amount of inequality in the US labor market, where a lot of housing has catered to the very wealthy, that sort of tracks the growing divide between the incomes of the high skil and low skill population in the US. So these are various supply and demand impacts that have preceded the refugee crisis. And it’s certainly not going to be solved or exacerbated by this particular refugee numbers that we’re seeing right now.

Kai Ryssdal: So just as a way to wrap this up, do you think that our refugee intake system is – has the capacity, forget the economy, right, the economy could do it, we know that can our infrastructure, our refugee resettlement infrastructure, do it?

Ramya Vijaya: But that is an excellent question, as I said, just the processing infrastructure is is lagging just in terms of having the number of people to wet these refugees. So that certainly requires some amount of help. Right now, there are nine resettlement agencies that are generally contracted by the US Department of State. And these agencies then work with local teams and local sub contracting agencies as well. A lot of them are faith, faith based organizations. So they all could certainly use lots of support, lots of local support. So if people are listening in that is what I would encourage them to do to make up for the lack of state resources. But overall, the program does need a lot more help in the processing to ensure that, you know, we do get the resettlement process up and running as quickly as possible. And that certainly helps in the economic integration because we’re talking about people with economic aspirations and potential. And the sooner we can get them resettle, the sooner they can integrate into the labor market.

Amy Scott: Real quick before we let you go, though, I mean, part of this is that the system is still recovering from, from cutbacks during the Trump administration, right when the number of refugees was was dramatically reduced. And they’re trying to staff up and, you know, get their resources in order to process the refugees that were going to be accepted even before the war in Ukraine.

Ramya Vijaya: Yes, absolutely. As some of you may be aware, for the first time in nearly – in since the 80s, when the program was formally began, the refugee intake numbers were reduced to 18,000, which is the lowest it has been in 40 years. So then the resettlement agency certainly did not then have the capacity or the funding to keep their staff on during those years. And now that we are suddenly facing this humanitarian imperative again, certainly the start up to restaff and reestablish those connections have has been certainly an issue and hopefully, you know, in the next year or so that at least can can move forward in a smooth manner.

Amy Scott: All right, Ramya Vijaya is a professor of economics at Stockton University. Thanks so much.

Ramya Vijaya: Thank you for having me.

Amy Scott: Great talking to you.

Kai Ryssdal: Good topic. Important topic. Yeah. Alright, so if you’ve got thoughts about that conversation, or refugee resettlement writ large, or actually anything else you hear on this podcast, you know how to get as 508-827-6278. 508-U-B-SMART. You can send us a voice memo if you’d like makemesmart@marketplace.org. We’ll be right back. Alright, let’s do some news. Amy Scott, you go first.

Amy Scott: All right, I got some news. Well, the Wall Street Journal has some news that I’m going to tell you. So the Journal is reporting that Blackstone the big investment firm is making a huge bet on college student housing. And I think this is interesting, because a couple of years ago, at the beginning of the pandemic, college student housing was not a great business to be in, when everyone was getting sent home and, you know, learning remotely in their bedrooms. Their childhood bedrooms, I should say,

Kai Ryssdal: Oh, yeah, you kidding me? My second son spent his entire freaking sophomore year of college in the bedroom he grew up and and he’s, let me tell you a little cranky about  it.

Amy Scott: Were they still charging you for the dorm?

Kai Ryssdal:  Oh, good question. Well, he’s at  UCLA, right. So he was off campus at an apartment, which we were still paying rent on. But But yeah, the whole college housing thing is topsy turvy right now.

Amy Scott: Yeah. So anyway, Blackstone is buying this real estate investment trust called American Campus Communities in a deal worth almost $13 billion. A lot of that is debt, because that’s how these things work. But this is the largest publicly traded developer of student housing. It’s based in Austin. And you know, what surprised me is, is that, of course, at the beginning of the pandemic, as we discussed, when you know, everyone went home campuses were closed and switched to remote learning. The company saw its stock tank, I mean, if you look at a chart, it’s it’s pretty staggering, but it’s really come back. And what’s striking is that these companies have fared a lot better than expected. Even during that period. According to the Journal, they were still collecting a lot of rent, which I think is a whole different story. Now, of course, students are back colleges are expecting and hoping that international student enrollment, which really tanked will recover, which increases demand. There hasn’t been a lot of construction in the past couple of years. So there’s a real shortage of housing. You know, we talked about that before. Same old story there with with student housing and off campus housing that pushes up rents so they can charge more. And Blackstone’s head of real estate, told the Journal that this is a really good bet, because student housing isn’t as vulnerable to economic downturns as other sectors. And in fact, I mean, in a typical downturn, COVID was pretty different. But in a typical downturn, more people actually go to college. So and it’s a good hedge against inflation, because you can just raise the dorm rates every year. So I think it’s gonna be interesting to see how this market kind of bounces back. And if more investors are going to pour money into this.

Kai Ryssdal: They will. They will.

Amy Scott: Yeah. Wherever they make money.

Kai Ryssdal: That’s exactly right. It’s exactly. Mine is it’s a story you kind of have to read and we’re gonna put it on the show page.  It’s in the Washington Post today by their technology reporter Taylor Lorenz, and it’s a story about how internet conspiracy theorists, right wingers and I’m using this word intentionally, crackpots get funneled directly into the right wing media machine it’s a story about the woman who runs a Twitter feed actually now used to be Tik Tok but she got banned it’s called “Libs of Tik tok.” L-I-B-S O-F T-I-K T-O-K. Okay, Libs of Tik Tok. Look it up. And it’s a crazy crazy story about how this stuff is just getting mainlined into the neural networks of millions and millions and millions and millions of Americans and being amplified by Fox News and Joe Rogan. And all the rest and it’s it’s stunning and depressing and and you got to read it, Libs of Tik Tok by Taylor Lorenz today in The Washington Post. All y’all read it and report back, send us your thoughts because it’s just It’s wild. Wild wild wild. I guess I shouldn’t be surprised.

Amy Scott: I’m actually biting my fist right now so I don’t say anything I regret.

Kai Ryssdal: I guess I shouldn’t be surprised. But anyway. Yeah, it’s it’s easy on us, nobody’s listening. Right? So you can say anything you want on this podcast? No, I’m just kidding. Anyway, that’s the news. Let us move on, shall we?

Amy Scott: Let’s do the mailbag.

Kai Ryssdal: Before I get us in trouble.

Kai Ryssdal: A lot of things. Okay, so when I was out on spring break, which was two weeks ago, not when I had COVID, which was a week ago. It’s been it’s been a crazy two weeks anyway. You brought some housing stories because that’s what grabber for us.  That’s what I do, yes.  And lots of people had some thoughts. Here’s Anne in Colorado.

Anne: In my job working in the background on mortgage files. I’m seeing many, many, many homes selling above appraised value. Also the homes are selling so fast that sellers can’t find a new home prior to the closing date on the home they’re selling so they continue to live in the house after they sell it for 30 or 60 days. It’s a weird market. Love the show. Just wanted to give my two cents from the mortgage industry.

Kai Ryssdal: Always welcome.

Amy Scott: Thanks, Anne. And here’s a voice memo from another listener who wants us all to stop saying sorry.

Dale: Hi, this is Dale calling from my backyard North Carolina. Lots of podcasts these days are from informal locations. Often the person recording the podcast stops and begins profusely apologizing for pet, child, street other kinds of unintentional noise. Why is this such a big deal needing  major apologizing? It’s a normal part of life. Simple acknowledgement is more than enough. I really prefer the way you guys include this background. It makes listening more enjoyable. Take care and keep up the good work guys.

Amy Scott: That a rooster?

Kai Ryssdal: He did that on purpose, man, he got up at dawn, just to record that freakin thing just as the birds were going, Holy cow.

Amy Scott: I don’t think I’ve apologized. But point taken.

Kai Ryssdal: I do sometimes about the dogs and the kids and whatever. Alright.

Amy Scott: Well, my cats right now are racing around outside that the closet but I don’t think you can hear it.

Kai Ryssdal: Can’t hear a thing. All right, before we go. This week’s answer to the Make Me Smart question. Which is something – what is something you thought you knew, but later found out you’re wrong about here we go.

Scott: This is Scott in Baltimore. One thing I thought I knew what was wrong about was how politics is required for almost any beneficial change in our society. I chose to pursue a career in science thinking that technology was the rate limiting step to addressing many of the big problems we face. And it is important, but convincing the people in power to make decisions that benefit us, especially in the long term is absolutely essential. Realizing this earlier in life would probably have influenced my career choices. Thanks, love the show.

Kai Ryssdal: That’s totally interesting. I’m gonna say stick with what your passion is and do the science and technology thing because you like it. And somebody else can deal with the politics because they like it. That’s what I’m saying. Anyway.

Amy Scott: Yeah, I like that.

Kai Ryssdal: Yeah. Totally.

Amy Scott: Sad, but true though. Scott in Baltimore. Woo-hoo!

Kai Ryssdal: Go Baltimore.

Amy Scott: All right, keep sending us your answers and questions via voice memo to our email at makemesmart@marketplace.org or you could leave us a message at 508-827-6278, also conveniently known as 508-U-B-SMART.

Kai Ryssdal: Alright, let’s see. Super quick before we go, we’re gonna see if I mess up the credits music here. I’m out the rest of the week because my mom’s in town and the rule in my house is that I’m not allowed to go to work when my mother is in town. So you know, domestic politics trump all. Number two Kimberly’s out for like another 10 days. So we’ve got a revolving cast. Amy’s here for a while. I think there’s some others sitting in and so it’s gonna be it’s gonna be a little jumbled, but we’ll get you through it we’ll get you through. Make Me Smart is produced and directed by Marissa Cabrera. Our team also includes producer Marque Green and Ellen Rolfes. She writes our newsletters, our intern’s Tiffany Bui.

Amy Scott:  I’m going to do my best y’all. Today’s program was engineered by Juan Carlos Toronto with mixing by Mingxin Qiguan. Ben Tolliday and Daniel Ramirez composed our theme music. The senior producer is Bridget Bodnar. Donna Tam is the director of On Demand. Marketplace’s Vice President and General Manager is Neal Scarbrough.

Kai Ryssdal: Nobody tells you the rule that when the music stops, the credit stops? Sorry, if you’re on the tail end of the credit – if you’re on the tail end of the credits and the music stops, I’m sorry, you’re out of luck. That’s just the rule.

Amy Scott: This is not a broadcast show. What’s going on.

Kai Ryssdal: Gotta have rules.

Amy Scott:  Yeah, there’s there’s very little training for this fill in. You should probably know.

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