Last week, a bipartisan group of US senators known as the Gang of Eight introduced comprehensive immigration reform bill that includes a provision for increased temporary, low-skill work visas. CGD senior fellow Michael Clemens, a leading expert in migration, labor mobility, and development, has welcomed the proposal as good for development.

He and Lant Pritchett argue in a new CGD brief that the visas are a four-way win: for the US middleclass, US low-skill workers, border security, and for the migrant workers themselves. But he adds that

the proposed increase is too modest to address the huge, un-met demand for low-skill workers in the United States.

“I would call [The W Visa program] a modest program,” Michael says. “This is an incredible opportunity for people outside the country to benefit from the US labor market, and an incredible opportunity for the American economy to benefit from low skill labor, as it always has.”

Increasing the number of temporary work visas during a time of continued high unemployment is politically difficult. Why, some Americans ask, should we let more people cross US borders to find employment when so many US citizens can’t find jobs?

The answer, Michael says, is simpler than you may imagine. And he has the numbers to prove it.

“The US economy will need a lot of low-skill workers over the next decade,” Michael explains.

Even if all 1.7 million Americans who are expected to enter the labor force by 2020 took up low-skill jobs, he says, that still would be insufficient to meet the anticipated demand for just one subset of low-skilled work: home-based care, which is expected to require 1.9 million new workers during the same period.

“So there are only two options,” Michael says. “The jobs are not going to get done, or people from other countries will do them. The economy massively needs low-skill labor --make no mistake about it.”

Adding more authorized, low-skill immigrants to the US economy would bring many other concrete benefits to US citizens as well, Michael explains. Unfortunately, many of these benefits are not easily seen.

“The migrants that come here to work are also consumers, and they buy things,” Michael explains. “Migrants also help keep entire industries alive. Certain subsectors of agriculture would not be viable without migrant labor picking them.”

Some people argue that such workers are being exploited. Michael says this should be considered in light of the alternatives available if they had stayed in their home countries.

His research (see here and here ) shows that low-skill migrants who come to the US to work multiply their earnings by ten times or more when they cross the border to perform work such as picking crops, cleaning houses, or helping to care for children or elderly people in their homes.

“In many US states, minimum wage is $9.70 an hour. The minimum wage in Mexico is .57 an hour,” Michael says. “That’s the kind of economic opportunity we’re talking about. We’re talking about a life changing re-valuation of the labor of hard-working people.”

To learn more about many benefits of increasing the number of legal, temporary workers in the United States, read the brief. To understand more about the intersection of immigration reform politics and CGD’s work, see Beth Schwanke’s recent blog posts (here and here). Or just dive in and listen to the Wonkcast.

My thanks to Alex Gordon for editing the Wonkcast and providing a draft of this blog post.

My guest on this Wonkcast is Amina Mohamed, Assistant Secretary-General of the United Nations Environment Programme (UNEP), and one of the nine candidates to become the next director general (DG) of the World Trade Organization (WTO). Mohamed tells me she is extremely familiar with the DG selection process, as she managed it eight years ago while working within the WTO. Now that Mohamed is herself a candidate, she says that she is well-qualified to lead the WTO and confident to let her track record speaks for itself.

She tells me her most significant contribution to the WTO was helping to negotiate the Agreement on Trade-Related Aspects of Intellectual Property Rights (the TRIPS agreement).

“This was a very humbling experience for me because it was negotiated at a time when Africa was going through an HIV pandemic,” Mohamed explains. “For the amendment, we were focusing on issues that relate to the compulsory licensing and importation of generic drugs -- specifically for HIV/ AIDS, malaria and tuberculosis, and these were issues that were of great concern to Africa.”

Mohamed tells me the negotiated TRIPS agreement was historic for several reasons. The agreement made affordable lifesaving drugs for people who previously could not afford them. In addition, prior to the TRIPS negotiation, a trade related treaty had never been amended.

I ask Mohamed if her experience amending the TRIPS agreement provided lessons for breaking the stalemate on the Doha Development Round of trade talks, which were designed to bring benefits to the least developed countries. Her answer: “Yes.”

“The WTO is not about dogma and fragility,” Mohamed says. “It can adapt and be flexible, and we can make the compromises we need to make to make sure we create progresses, address concerns, and rise to the occasion.”

In regards to the Doha Round, Mohamed tells me the negotiations should be inclusive and transparent, and members sitting around the table need to feel their voices matter. She also expresses a concern for the tendency to hold frequent mini-ministerials outside of Geneva. The professional trade negotiators with access to their home governments are stationed in Geneva, so it makes sense to do most of the work there, she argues.

Later in the interview, I note that Mohamed’s statement to the WTO General Council was the only statement to mention the WTO role in climate change.

“The WTO has to be part of global problem solving, and climate change is an issue of global concern… It affects the flow of goods and services,” she explains.

Specifically, Mohamed tells me she favors a special trade liberalization of environmental goods and services, above and beyond other goods.

“There was a meeting that took place on liberalization of environmental goods and services in Russia,” she explains. “A lot of the major players there agreed on a list on a list of products they could convince members of WTO in Geneva to move forward on.”

I ask Mohamed what her main priority would be if selected as the next DG.

“Negotiations. The WTO was established in order to set rules and open markets. That was the diamond standard that the WTO set for itself and we should not move away from that so that for me has to be the top priority.”

Mohamed also explains that other stakeholders should be involved in negotiations – including civil society and business. She tells me she is already working with WTO members to establish a business advisory council to meet these ends.

We end the Wonkcast by discussing the relationship between the WTO and the growing proliferation of bi-national and regional Free Trade Agreements (FTAs). Mohamed says these newly-negotiated FTAs should operate on a basis of non-discrimination, and they should not delegitimize the WTO by creating new dispute settlement mechanisms.

The full interview is available above. This is the seventh in a planned series of Wonkcasts with candidates to become the next director general of the WTO. To learn when new interviews are posted, sign up for our weekly Development Update.

My thanks to Alex Gordon for editing the Wonkcast and for providing a draft of this blog post.

The World Bank and the International Monetary Fund (IMF) are the twin giants in global development and economic and financial stability, shaping the agenda for other international organizations and for governments across the world. What new issues face these institutions in a rapidly globalizing world? How are they responding? In this week’s Wonkcast, recorded in the run-up to the institutions’ Spring Meetings, we consider these questions.

My guests are Nancy Birdsall, founding president of CGD, and Todd Moss, vice president of programs and senior fellow.

On the day of this recording, World Bank president Jim Kim had just delivered an address at Georgetown University in which he set forth his vision for the World Bank, including setting a 2030 target date for an end to extreme poverty around the world.

I start by asking Nancy for her thoughts about the speech—and why demonstrators who once railed at the World Bank and the IMF during the Spring Meetings, and the Annual Meetings in the fall, have been mostly notable by their absence in recent years.

“The World Bank and the IMF have both changed. They’ve adjusted quite dramatically in the last ten years but particularly in the last couple of years,” Nancy replies.

“Jim Kim, in his speech today at Georgetown, talked about inequality – and he used the word injustice – which is a really different way of thinking about the problems in the global system. Of course, the other thing that’s changed is the rise of the emerging markets, and their more insistent demands for changes at the IMF and the World Bank. We are in a very different world,” she says.

This different world may require that the IMF and the World Bank change even faster than in the past.

I ask Todd about the future of the International Development Association (IDA), the concessional window of the World Bank that lends to the world’s poorest countries. In his Georgetown speech, Kim said that he would seek an aggressive replenishment for IDA, a promise that has been made by each new World Bank president.

Todd says it would be better to begin a discussion about how the role of IDA must change, as many recipient countries enjoy solid economic growth that will soon lift them about the IDA income ceiling.

“The soft loan window has eligibility criteria – usually income – and a lot of countries are bumping up against that threshold,” Todd explains.

“There are now 81 [IDA] eligible countries. We estimate that within the next 10 to 15 years, that number will come down to 31 countries; 25 of those countries will be in sub-Saharan Africa. That is a radical departure from what the world looked like a few years ago and from what it looks like today.”

In the face of this rapidly changing client base, what’s next for IDA? A CGD working group report, Soft Lending without Poor Countries: Recommendations for a New IDA, suggests several alternatives, from shrinking IDA to redefining its mission, for example, to include financing solutions to problems that transcend national boundaries, what economists call global public goods—most notably the threat of runaway climate change.

Nancy welcomes recent outspokenness on the issue from Kim and IMF managing director Christine Lagarde. Both leaders have urged international action, and both institutions have released major reports: Turn Down the Heat: Why a 4 Degree C Warmer World Must be Avoided, from the World Bank, and a March report from the IMF that found global energy subsidies—almost entirely for fossil fuels—are a staggering $1.9 trillion—about 2½ percent of global GDP or 8 percent of government revenues.

While each country waits for the next to take the first step in addressing this global problem, Nancy says the World Bank can lead by creating new grant instruments—perhaps funded in part by IDA—to push progress on this increasingly urgent issue facing the planet.

(On a more ambitious scale, Nancy and I have co-authored a brief, based on her longer policy paper, suggesting that the World Bank consider creating an entirely new arm to help address non-finance aspects of the global response to climate change.)

In our whirlwind tour of World Bank/IMF issues, we turn next to the seemingly arcane topic of IMF quota reform, a change agreed by all other major countries but held up by the inability so far of the Obama administration to get agreement from the US congress.

Nancy explains that IMF member countries pledge a certain amount of their reserves to the IMF, which the Fund then lends to countries in financial distress. The amount of each country’s pledge, or “quota,” is commensurate to the country’s influence within the IMF.

IMF members have agreed to double their capital commitments to the IMF, to give it the resources needed to address global shocks such as the 2007-2008 financial crisis. As part of the deal, the quotas were adjusted so that big emerging markets countries like China, Brazil and India would have larger quotas and, in turn, greater influence and votes in IMF proceedings, in keeping with their increased role in the global economy.

Todd and I discuss briefly why the US alone has yet to approve these changes. Nancy underlines why this matters, a point she explained in a recent blog post.

“It’s embarrassing for the US as a fading leader in international development and it’s a failure in safeguarding international financial stability,” she says.

“What this does is expose the dysfunction of our political system at a time when we are losing our leadership at the global level – which is bad for the US, bad for American interests, and bad for the rest of the world.”

This leads naturally to our next topic: the creation of a BRICS bank, a new multilateral institution led and financed by Brazil, Russia, India, China, and South Africa. Why do these countries want to create a new development bank? Would it compete with or complement existing institutions?

Todd says that frustration the BRICS countries feel about the existing institutions is at least part of the motivation. Nancy agrees, adding that the a smaller-than-expected recapitalization of the World Bank (resulting from US unwillingness to back more ambitious funding) and an unmet desire for a stronger focus on infrastructure may also be part of the explanation.

It’s a fast and wide-ranging conversation that covers a lot of ground. I hope you will listen!

My thanks to Alex Gordon for editing the Wonkcast and Catherine An for providing a draft of this blog post.

My guest on this week’s Wonkcast is Herminio Blanco, Mexico’s former minister of trade and industry, and one of the nine candidates to become the next director general of the World Trade Organization. Minister Blanco tells me the WTO is facing several challenges, and his experience negotiating numerous trade agreements including NAFTA, combined with more than a decade of experience in the private sector, equip him with the skills needed to push the WTO forward.

“The rules for the WTO were drafted 20 years ago, and as you know, the way of doing business has changed substantially,” Minister Blanco explains. “The network of free trade agreements that exist in the world, and very importantly the Trans Pacific Partnership (TPP), present big challenges for the WTO.”

Minister Blanco says his experience in the business sector gives him a different perspective on how the WTO can help to ensure that the investments businesses make will help to generate employment and prosperity for countries with lower levels of development.

“What I’ve learned from business is that we need to be able to invest and have transparency in rules for trade and investment,” Minister Blanco says. “I think it’s fundamental that the rules in the WTO are modern, so the organization keeps on being the benchmark for agreement on world trade.”

I ask Minister Blanco what he would do about the stalled Doha development round of trade talks if elected director general.

“My view is that it’s very important to get a substantive resolution to the Doha agenda,” he says. “I believe these negotiations should bring a call of attention to countries [represented] in Geneva… it’s time to be more flexible and it’s time to start moving.”

Minister Blanco also tells me the least developed countries stand the most to lose from a failed Doha Round. Therefore the larger countries should be more flexible, so the smaller countries can receive the benefits for which the Doha Round was intended.

Minister Blanco has outlined his program into a short and medium-term horizon, and a third portion he calls inclusiveness in integrating regional trade agreements. As part of his short term horizon, Blanco would like to see results from the trade ministerial in Bali this December. He tells me negotiators in Geneva are working on a promising trade facilitation proposal that could unlock billions of dollars in trade.

“The package will decrease obstacles for import and export in many countries,” he explains. “It’s an attempt to clean the borders of all the inefficiencies. That negotiation could be a very good signal of progress being made in Geneva.”

As part of a medium-term agenda, I ask Minister Blanco what role the WTO has in the international policy response to climate change, for example, how should the WTO regard the possibility countries that put a price on carbon imposing border tax adjustments on those that do not?

“I think it is important to protect the high values of humanity, one of them being the environment. But not to do it by putting obstacles that may go against the commitments of different countries within the WTO,” he tells me.

Minister Blanco ends our interview by discussing—and commending—the WTO director general selection process, a topic that CGD senior fellow Kimberly Elliott also discussed—somewhat more critically-- in this recent blog post.

The full interview is available above. This is the sixth in a planned series of Wonkcasts with candidates to become the next director general of the WTO. To learn when new interviews are posted, sign up for our weekly Development Update.

My thanks to Alex Gordon for editing the Wonkcast and providing a draft of this blog post.