Like free trade and finance, migration creates winners and losers.
In this article for Politico, Miguel describes the problems faced by the losers of migration, as well as the benefits for host countries. Most importantly, he outlines what needs to change to make migration work.
Today there is a strong cognitive dissonance between how the elites and ordinary citizens perceive the effects of migration. For the former, migration is generally seen as positive. A recent report by the World Bank supports this by concluding that: “Almost every empirical study finds that increased labour mobility leads to large gains for the immigrants and positive overall gains for the destination country.”
Economists like Branko Milanovic have convinced us that migration is the most powerful tool to fight global poverty. Young (skilled or unskilled) migrants move from poor countries and earn much more by receiving higher wages in the host, usually richer, countries. If they stay, their productivity and income, and that of their children, are bound to increase, and while they do so they are likely to send remittances to their countries of origin, and if they go back, they will take with them the acquired skills, networks and know-how. All positive.
For the host country the gains are substantial too. Unskilled immigrants do the jobs that natives do not want, and the skilled ones tend to fill the gaps in technical, specialised and managerial positions. They increase overall productivity and enrich the intellectual and scientific output of the country. As another economist, Ricardo Hausmann, demonstrates, societies which absorb people from different religious, ethnic, linguistic and cultural backgrounds are technologically more advanced. It is no coincidence that Sillicon Valley is a social melting pot. Those of us who work in a multicultural milieu realise the benefits.
My father had a very different experience. He was an unskilled worker in Basel, with no command of the language. That made him easily displaced by newly arrived refugees from the war-torn Balkans who spoke German
However, this is hardly the experience of the unskilled population. My family’s history is a case in point. I was born in cosmopolitan Basel, Switzerland, as a son of two unskilled Spanish migrants. From my first days in school I have enjoyed the pleasures of multiculturalism. My class mate Djordje was from Serbia, Hüseyin was from Turkey, Elena from Italy, Maja from Slovenia and Boney from India. This diversity was highly stimulating. I got my PhD from Oxford Brookes and teach now at IE University with mostly highly motivated students from all around the world. The enrichment continues.
My father, however, has a very different experience with migration. As an unskilled worker in Basel, with no command of the language, he got quickly displaced by the newly arrived refugees from the war-torn Balkans who spoke German. In his world there was not much cultural exchange. Workers tended to group by nationality or cultural affinity (the Spanish and the Italians got along but they hardly connected with the Serbs, Croats, Turks, Kurds and Albanese). Today my father is concerned by the images of hundreds of illegal migrants reaching the beaches of southern Spain. In his view, shaped by his personal experience, multiculturalism is utopian.
Migration is, therefore, like free trade. The consensus among economists is that it is overall positive for a society, but political economists point out that it generates winners and losers, and if the latter are not protected, social tension is likely to emerge. A few days ago, in the German city of Chemnitz, one of the anti-immigrant protesters said that she was there because of social injustice, her low pension and her son’s low salary. Asked why she protested against the immigrants and not in favour of more income redistribution, she just said her anger needed to be directed against someone.
Asked why she protested against the immigrants and not in favour of more income redistribution, she just said her anger needed to be directed against someone.
The past decades have shown that rational explanations about the merits of migration do not convince ordinary citizens. Many intellectuals in Switzerland, France, the UK, Scandinavia and more recently in Italy and Germany have tried it only to see the far-right increase its popularity. I fear that we are witnessing the same process in Spain, one of the few places where the far-right has no political representation – yet. Franco’s dictatorship still functions as an antidote, but one wonders for how long. What fuels the panic against immigration in the rest of Europe is the perception that the authorities have lost control. This sentiment is increasing in Spain.
Words are no longer enough to stop the anti-immigration wave. To the contrary, if the situation, and specially the perceptions, worsen, more Europeans will be against the application of the Geneva convention protecting the refugees. Italy is close to that point. Currently, a lot of economic migrants apply for asylum and if the application is rejected and there is no repatriation agreement with the origin country they get to stay illegally and without the possibility to have a formal job. This forces them to mendicity or embrace criminal activities.
For this reason, as Jean-Pierre Cassarino has documented, many EU countries, especially France and Italy, have expanded their bilateral readmission agreements with third countries, especially in Africa. These arrangements, however, do not cover the entire African continent, and some countries like Germany have few agreements with Sub-Saharan Africa. It is estimated that Italy has now 500.000 illegal immigrants. Spain has under 100.000. This might explain different attitudes towards migrants.
Hence, solutions are urgently required. Experts in migration say we need a Plan Marshall for Africa and legal channels for immigration. Economists claim that aging Europe needs young immigrants to pay for our pensions. Yet, a political economy analysis points to the fact that the pensions of today’s migrants will have to be paid by yet more migrants in the future and this is socially difficult. Once the white majority becomes a minority we can experience even higher doses of xenophobia.
The problem is therefore complex. Hard choices will have to be made. In principle, the most persuasive solution, advocated by the World Bank, is to have legal channels of migration based on the demand of the job market and better education and retraining systems to cover the displaced local workforce. These programmes could be financed by the introduction of progressive fees on working visas. Crucially, these visas would be for time limited periods and only those migrants who integrate well would then acquire the nationality of the host country. However, for this scheme to work borders would need to be better controlled, repatriation agreements further developed and implemented, and inspections against hiring of irregular workers would have to be more intrusive and widespread. A tall order. But, ultimately, as with globalisation, if we want to keep the benefits of migration we might have to develop it in a less liberal way. If not, the far right might destroy it altogether.