Is ‘Brain Waste’ Costing New Jersey Billions Every Year?

January 06, 2017

When highly qualified newcomers work washing dishes and cleaning restrooms, everyone pays the price — immigrants, communities, and New Jersey

According to the U.S. Census Bureau, so many college-educated immigrants have moved to New Jersey since 1990, they now outnumber the traditional pools of low-skilled newcomers.

That should be very good news, both for these highly qualified immigrants and for the state. After all, 21.5 percent of New Jersey’s population is foreign-born, the third-highest percentage in the nation.

But the state hasn’t done much to tap their potential, resulting in what’s known as “malemployment,” newcomers working at jobs for which they’re overqualified or overeducated or both. Another name for the problem is “brain waste.”

“I’m a well trained busboy,” said Eduardo Fregoso, 39, with disappointment and a hint of sarcasm. A senior financial analyst from Mexico City, he migrated north in 2014 after he was kidnapped in his hometown, losing all to pay for his freedom. He moved to Union City in Hudson County in 2015.

While the waste of immigrant talent is a national issue, despite projected shortages of 7.5 million jobs in the private sector by 2020, the situation is particularly critical for the Garden State, where nonnatives have sustained not only population growth for decades, but also economic competitiveness.

Some 111,479 people — 23.3 percent of the state’s foreign-born professionals, according to new estimates by the Migration Policy Institute (MPI), an independent research center in Washington, D.C., are either out of work or so egregiously malemployed that they wonder if this is still the land of opportunity.

Overall, the U.S. was home to nearly 2 million malemployed new Americans between 2009 and 2013, according to data published this month by MPI, in “Untapped Talent,” a groundbreaking report on the economic cost of the phenomenon.

It’s a situation that Eduardo Fregoso knows all too well. He had heard good things about New Jersey, which has the third-largest immigrant population in the country and a lower cost of living than nearby New York City. With his decade-long experience evaluating financial plans for technology, banking, and water-supply companies, he thought he’d have no trouble finding work.

But despite a green card and a good command of English, he found instead a string of survival jobs, from busboy and assistant bartender to air conditioner installer, that barely required a high school education. Tired of ninety-hour work weeks, he drove for Uber to make ends meet. Ultimately, he decided to leave the state to find better employment.

“We have a myopic view in New Jersey’s workforce,” said Dr. Nicholas Montalto, a national expert in acculturation and immigrant integration. “We think of immigrants as an afterthought, [instead of] a critical part of the mix of potential workers.”

As the president of Diversity Dynamics, a consulting firm in Cranford and, before that, the head of the International Institute of New Jersey for 25 years, Montalto knows the challenges faced by educated newcomers in the Garden State’s labor pool. In 2012 he spearheaded the Skilled Immigrants Task Force in part to address the problem.

Last May, the task force presented its report, “Skilled Immigrants and Immigrants Entrepreneurs in New Jersey,” to the State Employment and Training Commission (SETC) to highlight the economic and social costs of brain waste and to recommend solutions.

“Clearly the composition of the [newcomer] population has changed,” said Montalto.

Increased literacy rates around the world and U.S. immigration policies that favored skilled labor helped contribute to the preponderance of highly skilled immigrants in New Jersey, where foreign-born residents with a college degree (36 percent) outnumber those without (21 percent).

That’s why ESL teachers and other adult-workforce educators meet so many malemployed immigrants who feel, “a sense of frustration that they don’t know how to address,” Montalto explained.

There’s another downside to brain waste: New Jersey’s knowledge-based economy depends on its foreign-born community to counterbalance the loss of its own human capital in vital fields such as healthcare and technology, according to the task force’s report.

Further, it estimates that the state’s yearly losses from missed income and taxes run in the billions, while affecting the stability of communities and families.

“I miss my job,” said Dr. Khalid Dermoumi, 44, a French-trained Moroccan dentist with specialties in periodontics, prosthodontics, and emergency dental care who emigrated to Jersey City with his American wife in 2014.

Dermoumi worked as a construction worker and a night clerk at his local Stop-and-Shop supermarket while studying to enter college in the United States. After thousands of patients in 18 years of practice overseas, he will have to start from scratch if he wants to relaunch his career in America. While pursuing relicensing, he resumed a childhood hobby of building model airplanes to keep his hands nimble.

He added that his meager pay opening boxes and organizing shelves at the supermarket, approximately $300 per week, did little to help cover $5,000 to $6,000 for credential evaluations, books, and college applications.

“It’s a lot of money for an underemployed person like me.” He said that he couldn’t do it without the financial and psychological support of his wife, an international teacher.

“It’s a big challenge, particularly for immigrants who work in occupations that are regulated,” said Jeanne Batalova, a senior policy analyst at MPI who co-authored “Untapped Talent,” which for the first time estimated the cost of underutilizing America’s immigrant professionals: $39 billion in missed wages and $10 billion in forgone taxes.

When it comes to relicensing, the process should be streamlined to uphold rigorous standards and remove unnecessary duplications and costly delays, she added. Both foreign-born and domestic workers, like teachers and veterans who often come home with training and education acquired abroad, would benefit.

Dermoumi returned to Casablanca, his hometown in Morocco, this summer to supplement the family income by working temporarily at his old dental clinic. The money he brought home to New Jersey will go to defray expensive dental school tuitions.

But licenses and credentials are not the only barrier that skilled immigrants face.

“It’s really a talent problem,” said Amanda Bergson-Shilcock, a senior policy analyst at the National Skills Coalition, in Washington, D.C. “Our economy is not able to fully use the human capital that people [bring] with them.”

Last year she co-authored “Steps to Success” a report that used original data from six major U.S. cities, to identify the roadblocks that immigrant professionals confront. English language competence, social capital networks, and a “Made in America” stamp on a resume, emerged as crucial variables.

The task force report also pointed to a potential bias against Latin Americans and Africans whose national malemployment rates, 46 percent and 47 percent, respectively, significantly surpass the 36 percent for all nonnatives.

Fregoso feels that’s part of his struggle. “They think that Mexicans are ‘one type’,” he said. “We’re very [hard] working mules, but we’re not supposed to be well educated, maybe.“

It doesn't help that American “integration” policies haven’t caught up with the demands of knowledge-based work, explained Bergson-Shilcock. Nowadays, it’s not enough to open the door to the training and education that the U.S. economy needs, like in the STEM fields. People now need higher levels of host language and acculturation than ever before.

“Generally speaking, the immigrants who come here are trying to integrate into a 21st century economy, with a 20th century immigrant integration policy,” she said.

Access to affordable “contextualized ESL opportunities,” confirmed Montalto, should be a top priority in New Jersey. It was among the recommendations presented to SETC.

The agency declined to comment on ongoing efforts and later replied that it does not have anyone available to discuss the matter.

“The best ESL instruction,” he continued, “is the one adapted to the actual communication needs of immigrants within the occupational context they work or aspire to.”

Rosa Mandujano, 53, would love that. A former high school teacher from Lima with a master’s education administration, she lives in Mt. Laurel, Burlington County.

In her home country, Mandujano taught Peruvian history and Spanish language and literature, but since joining her son in New Jersey in 2013, she has unpacked boxes at Burlington Coat Factory and cleaned restrooms and dining rooms at the James Cooper Plaza on the New Jersey Turnpike. She currently cleans a PC Richards store 10 hours a week.

As a green-card holder with many years of professional experience, she wants to do more. But her $10 hourly pay is not enough to live on, let alone take advanced classes.

“I know Hispanic people who are professionals, but we need some opportunity,” she shared via email with the help of Sheryl Churchill, Mandujano’s ESL teacher at Literacy New Jersey, a group that offers free English language classes in eight counties.

People in Peru, she added, still believe there is an American Dream. “My people don’t know what the situation really is in the U.S.”

New Jersey is possibly in a worse situation than the rest of the country, emphasized Montalto, because it has a bigger share of educated newcomers. Facilitating employability “by way of public policy and practice” is a must.

“These barriers have existed,” he said, referring to both language and social capital, another major determinant of success. “It’s time to explore what’s appropriate for this state in a systematic fashion.”

Clara Sophia Ochoa, 32, a pharmacist from Colombia, concurs. The Hackensack resident has been cleaning offices and houses with her aunt’s service since 2010, when she moved to New Jersey to reunite with her family.

“I do not have a [professional] job yet. It’s taking a lot of time to find it,” she said via email.

Trying to improve her situation, Ochoa enrolled at Fairleigh Dickinson University where she earned a Bachelor of Art in industrialized studies in 2013 and a Master of Administrative Science last year.

She accomplished the goal while working full time and managing a congenital hearing loss that didn’t stop her from earning her bachelor’s degree summa cum laude, she reported.

But until a better job comes along, she’s making between $10 and $20 per hour as a cleaning woman. In April Ochoa became an American citizen. She hopes it will improve her chances.

“It can take time,” said Nikki Cicerani, president and CEO of Upwardly Global a national nonprofit with many clients in New Jersey that specializes in the integration of highly skilled, highly qualified people like Ochoa. “The thing to recognize is that all the other factors play in,” Cicerani added.

Even with a Made in America education, which does give a competitive advantage, she explained, immigrants still need to know how to interview well; understand the American job market; and rely on a network of friends, family, and professionals to find employment.

A lack of connections is what Fregoso lamented the most. “No one knows me here,” he said. “I would love to get back my career as a financial analyst. I’ve applied for many positions, but nothing!”

New Jersey has established the Talent Networks to identify potential needs, said Montalto, who thinks that skilled immigrants would be a good match for the state’s need for highly qualified workers. They could help fill critical shortages in engineering, mathematics, science, and education, to name a few possibilities, while employers would “access a job-ready pool.”

But little is happening. “We’re still moving the first steps,” he said.