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WHY SHOULD WE CARE ABOUT MIGRATION?

By Jeronimo O. Muniz

Synopsis: Why do people migrate? What are the factors attracting or repelling migrants? Who wins and who loses with migration? Is it true that immigrants replace local workers? Do emigrants “drain” skills from their home countries? Are immigrants a burden to the welfare state? This essay offers potential answers and sheds some light on why migration matters. It shows that migration brings costs and benefits for sending and receiving countries. Therefore, migration cannot be left to the will of the market. It must be controlled by the hand of the state, and organized or limited according to the consequences that it brings to the society being affected by it.

WHY SHOULD WE CARE ABOUT MIGRATION?

If all migrants were grouped together, they would form the sixth largest country in the world after China, India, United States, Indonesia and Brazil. In the beginning of this century, approximately 175 million people were living outside of their country of birth. In the future, the flow of people is projected to increase due to improvements in transportation, communication and commercial agreements. Governments in Europe and Israel have contemplated immigration as a plausible means to sustain a healthy age structure – necessary to keep solvent pension funds based on ‘pay-as-you-go’ systems, to feed the labor market with working-age population, and to avoid population decline. Therefore, the forces driving migration merit attention. Why do people migrate? What are the factors attracting or repelling migrants? What makes individuals leave the comfort of their homes, the company of their families, or the pleasures of their hometowns? These questions have several answers, but first it is important to be aware that there are different types of migrants. There are five types of migrants: settlers, contract workers, professionals, unauthorized workers, asylum seekers and refugees. The first are people who intend to live permanently in their new country. The second are migrants moving to work abroad for a specific period defined in a contract. Professionals are employees of transnational corporations who move from country to country. Unauthorized workers are illegal immigrants. In Europe, the number of undocumented immigrants is around three million, and in the United States, this number is between seven and eight million. The last type of migrant, asylum seekers and refugees, consists of individuals who leave their homes to escape from dangers or persecution. When asylum seekers have their claim accepted, they become refugees. Foreign students, visitors for pleasure or business, and temporary foreign workers are nonimmigrants. In the United States, after first-degree relatives of citizens, the second largest group of immigrants comprises foreigners who were admitted for economic and employment reasons. About 40 percent of the professionals coming to the U.S. are professionals with at least a bachelor’s degree. Half of this share is from India; most Indians come to work in computer-related jobs. The third group is refugees and asylum- seekers, and the fourth major immigrant group is the diversity category, which includes people from countries that sent less than 50,000 immigrants in the previous five years, and who meet specific educational criteria. Despite their different classifications, immigrants normally have a common motive to move: they are not comfortable at home. Wars, persecution, and family unification are the main factors fostering human flows, but high unemployment and low wages play important roles too. In general, individuals and families decide to migrate when the benefits expected in the destination are greater than those received at home. In addition, the allocation of household or family members in different areas represents a means of spreading risk. Some members work in the local economy, others are sent to urban areas, and others migrate to other countries. In this way, if one of the members suffers economic setback, the family has others sources of income to maintain itself. The intuition is simple: people go where they see better prospects for themselves and their families.

The problem is that individuals or families are not always sure about what to expect. The uncertainty of the future contributes a lot to migrants’ regrets. In the short- term, is not easy to be aware of all the amenities, behaviors, feelings and cultural changes that they will experience when they get to their destination. For these reasons, social networks are important. Social networks facilitate migration. The influence of networks happens in the form of jobs and wage information flows, or communication, transportation, assistance organizations, and desire for new experiences. When people know someone in their destination, is much easier to get used to the new environment. Additionally, migration causes permanent changes in motivation and perception over time that encourage additional migration. Network formation, income distribution (via remittances), and changes in habits and consumer behaviors of those who migrate and of those who observe the status and socio-economic improvements of emigrants are strong incentives to create a cyclical process of cumulative migration. Therefore, once it starts, migration may continue over time independently of the conditions that originally caused it. For those who migrate, the changes are usually positive not only because migrants generally make more money working abroad than in their home countries, but also because they experience a new culture, personal growth and the satisfaction of sending money to their families. In 2003, about 60 percent of the estimated 16.5 million Latin American migrants living in the U.S. sent money home. Nearly $30 billion in remittances were sent to Latin America and Caribbean countries in the last year. In the macro level, the question that matters is how public policies should combine to permit a social optimum for both sending and receiving countries. How is migration good and bad for the economies of the sending and receiving countries? Who receives benefits and who experience losses? In total, is migration helping or hurting the economy of a given country? Migrants help to hold down wages and prices and to increase the efficiency of the economy. Agriculture, a sector in the American economy that has employed large numbers of Mexicans for the past 60 years, is extremely dependent on foreign labor force. Is hard to say how much prices would rise if foreign workers were not available. It is true that the cost of hiring a foreigner is lower than that of employing an American citizen. Otherwise, there would be no reason to import labor. For the immigrants is a good deal too. Although their wages are low by American standards, they are better off receiving 10 to 15 times more in the United States than they would at home. A common argument against immigration is that immigrants steal the jobs of local workers. The public complains that migrants replace native workers in the labor market, although studies show that they tend to complement rather than displace local workers. The argument is that migrants fill the jobs that local people reject, alleviate the shortages in fields where the number of workers is not sufficient, and provide skills to improve productivity and to increase profit. During the dot-com boom in the 1990s, computer firms persuaded Congress to increase the annual quota of visas to fill computer-related jobs, arguing that they had the right to hire the best workers around the world and that the government should not interfere in the relationship between employers and workers. After negotiations, the number of H-1B visas 1 increased three times.

1 The H-1B is a nonimmigrant classification used by an alien who will be employed temporarily in a specialty occupation or as a fashion model of distinguished merit and ability. Migrants with H-1B visas are

The accusation of ‘brain drain’ – emigration of very educated and skilled workers

or intellectuals outside of their native country – is also not entirely true. On the one hand,

is hard to deny that developing countries in Africa, Brazil, India, South Korea and China

are losing valuable skills to more developed regions that offer better wages. In many cases, people discard the idea of coming back home after spending years studying or working in a foreign country. The costs involved with resettlement, search for a job, and readaptation to lower living standards are high. On the other hand, especially in Asia, people return after investing in education and acquiring new skills and knowledge abroad. Furthermore, migrants’ countries gain when they send money home. What of the accusation that immigrants are a burden to welfare states? Do immigrants sponge off government resources? It depends. Most immigrants are young and are of working age, so they usually are healthy, have jobs, earn wages, pay taxes, consume public services and help to heat the economy. The net cost of immigrants depends on their ages at arrival and their educational levels. The National Research Council found that adult immigrants with high school education or less impose a net fiscal cost to the United States higher than $60,000, on average. When immigrants come to the country with more than 12 years of schooling, the lifetime net gain is higher than $100,000. Since these immigrant-workers receive above-average incomes, they pay above-average taxes and do not depend on public assistance and other transfer programs. In other words, at the end of their life cycles, the amount of taxes highly educated immigrants pay is much higher than the amount of benefits they receive from the state. In more developed countries, where the proportion of elders is increasing, immigration has been contemplated as a solution for the Social Security dilemma and population decline. Increasing immigration helps to increase the ratio of workers to retirees and the birth rates. As most women migrate during their childbearing years, they end up having children out of their home countries. Moreover, large and sustained migrant flows can alter fertility levels in receiving countries when migrants come from regions with high fertility norms, as is the case of Mexicans coming to the U.S. On average, Hispanic women living in the United States have 3.1 children during their reproductive lives, while African Americans have 2.1, and non-Hispanic whites have 1.8 children – a number lower than that required (2.1) to sustain population replacement and to avoid demographic decline. In the future, if these figures remain the same and immigration flows continue to increase, Hispanics will prevent the American population of declining and getting older. The problem is that demographic answers – especially fostering immigration – are

a short-term convenience rather than a definitive solution. In the long run, as birth rates

are falling and populations tend to become stable, most countries will decrease their supply of migrants. When countries with high population growth achieve a stable equilibrium and constant age structures, there will be a lack of sending countries and then other alternatives will have to arise. Instead of adopting short-term demographic solutions, better options to solve the Social Security problem are improving workforce participation, discouraging early retirement, reforming pension schemes, and moving retirement age gradually upwards. In this sense, to create pensions funds, preferably

private, where workers would be able to fund themselves is a promissory exit. Of course those who do not earn enough money to pay for their costs after retirement would have to remain under state funding, but even in this case the financial burden over the public accounts would be much lower than in a situation where the government pays for everybody. Migration brings costs and benefits for sending and receiving countries. Those who receive should favor young and skilled immigrants who will contribute more to the economy and will not require subsidies from taxpayers. Those who send should assure that emigrants will send money and will come back later after acquiring new skills. One way to do this is to sponsor citizens to study abroad, but enforcing their return through legal contracts. Why should we care about migration? The final answer depends on how much developed countries worry about the well being of their citizens and on how much they care about the sending countries. Pulling migrants from less developed regions, the U.S. might be provoking a shortage of skilled workers in those countries, and at the same time might be creating a negative image to the world of being exploitative and selfish. Is the selfishness coming from the U.S. or from the workers who enter in the country? If the United States and other developed countries are selfish when they attract migrants, then it is reasonable to say that it is a shared selfishness, which benefits not only the country but also those who come here and those who are left behind.

Further reading:

1. Stalker’s guide to international migration, accessed online at http://pstalker.com/migration/,

on Aug. 9, 2004.

2. Migration News (August 2004), accessed online at http://migration.ucdavis.edu/, on Aug. 10,

2004.

3. Philip Martin and Elizabeth Midgley, “Immigration: Shaping and Reshaping America,” Population Bulletin 58, no. 2 (2003).

4. Philip Martin and Jonas Widgren, “International Migration: Facing the Challenge”, Population Bulletin 57, no. 1 (2002).

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