October 12, 2005
Migration, Economics & MENA-African pileups
While I may be banging away at an issue of little general interest, I was encouraged to find something of relevance to the rising issue of Euro-African migration and the Maghreb in the last issue of the Economist.
Be my guest
The economic case for temporary migration is compelling; the historical record less so
Oct 6th 2005
(Yes subscription, don't like it? Fuck off then and read some free twaddle.)
For those puzzled, my reference is to the recent problem emerging in the Maghreb and especially Morocco with its land border with the Spanish enclaves Ceuta and Mellila, which I mentioned in my typically light weight Illegal Immigration - Borders & Madness and The Maghreb-African Immigration Problem
Lacking substantial time to comment, let me simply quote and comment very briefly on some points, with the relevance to the original subject matter being that - well there are fucking thousands of people desperate enough to risk getting sliced to ribbons on concertina wire, shot or othewise taken care of by Hispano-Moroccan authorities gentle attention, march across the Sahara, etc.; bit of a problem there:
LABOUR is globalisation's missing link. The flow of workers across borders is heavily impeded, leaving the global market for labour far more distorted than those for capital and commodities. The world price of capital may be set in America, and that of oil set in Saudi Arabia. But there is no such thing as a world price of labour. Wages can differ by a factor of ten or more depending only on the passport of the wage-earner, according to Dani Rodrik, an economist at Harvard.
Relaxing the movement of labour even a little would thus generate large efficiency gains. Mr Rodrik calculates that letting poor workers into rich countries, in modest numbers (equivalent to 3% of the hosts' labour force) for a limited period, could reap benefits to the developing world worth $200 billion a year. With numbers like that, he and other economists wonder why so much energy is spent freeing trade and capital, and so little expended freeing labour.
One should note that economists are not as dim as the selection implies, as "wonder" here may be taken as "reflect on."
Well, most economists.
By which I mean, "many economists" which may be itself read as, "a certain number of economists that I know that is greater than zero and may or may not actually be significant, but because this is a stupid blog, I shall hand wave about authoritatively."
Most interesting in the article is the reflection on a recent UN report calling for allowing temporary migration, that is guest-worker programs. Like the Gulf one might say, import the dirty little bastards for a time and send them packing. The report piously hopes a formalised system might reduce abuses and illegal flows. The later perhaps, the former, well ..... it all depends on incentives, doesn't it.
As the article notes:
As the commission acknowledges, history lends little support to their optimism. The Gastarbeiter programme in Germany—which invited Turks, Yugoslavs and others needed at the time to fill the factory jobs created by the country's post-war economic miracle—failed, at least on its own terms. Many of Germany's “guests” never left, and their families soon arrived. The bracero programme in America—which, from 1942 to 1964, recruited Mexican field hands to pick cotton and sugar beets in Texas and California—fared no better. The entry of hundreds of thousands of farm workers provided camouflage for a substantial flow of undocumented labour.
Of course this is simply because, as we know from the Gulf, the host countries were wishy-washy humanists with respect for human rights (imperfect perhaps but there) and allowed in families and the like.
The right way to do things is simply keep the smelly human scum in utterly inhuman conditions, give them as few creature comforts as possible (or even less), never allow their families in, and be ready to dump them in containers if necessary.
Of course all this wishy washy human rights stuff gets in the way, but Dubai seems to know how to spend enough on marketing to overcome.
Of course there may be other ways of doing things.
Regardless, the article correctly notes
...the logic of temporary migration appears irresistible. Rich countries want migrants' labour, but do not want to look after these newcomers when they grow old. Ideally, rich countries would like a constant rotation of workers, arriving while they are young and active, leaving before they grow old and dependent. For its part, the commission argues that “temporary and circular migration” is also better for poor countries. One reason is remittances: the longer an immigrant stays away from home, the smaller the share of his wages he sends back.
It also could allow better work practices and the like to flow back and take the pressure off of wages in the labour providing countries.
Of course the key problem is ensuring temporariness. That and the whole brain drain thing, and language issues, etc. etc.
Some cited programs are interesting enough
Some countries set a simple quota, filled on a first-come, first-served basis. The British government is more calculating, allocating visas to specific sectors, such as food processing, that express a need for cheap labour. Singapore is the most ambitious. Its ministry of manpower sets “foreign worker levies” that employers must pay to hire an immigrant. The levies differ by industry and by skill. To hire a skilled foreigner in construction, for example, an employer must pay S$80 ($47) a month. To hire an unskilled migrant, the employer must pay S$470. With these levies, the ministry can fine-tune the demand for immigrant labour.
Fine, although there is the matter of the unwashed masses pissing off in the end.
Singa can kick people out easily enough but that clearly won't work elsewhere. Well, unless you adopt Emirati style approaches to human rights, which while oddly seductive for their brazen lack of honesty, in the end are probably not only unworkable in any normal society but also inefficient.
Now an item I want to touch on more:
Governments often claim they want to tailor rules on immigration to the needs of the economy. But the economy's needs also adapt to those rules. Philip Martin, of the University of California, Davis, and Michael Teitelbaum, of the Alfred Sloan Foundation, provide two striking examples. California's ketchup industry relied heavily on Mexican braceros to pick its tomatoes in the 1960s. The industry insisted it could not survive without these cheap hands. But when the bracero scheme was ended in 1964, farmers replaced the migrants with machines. Engineers invented a harvester that could shake tomatoes from plants and distinguish red fruit from green. Crop scientists developed new, ovoid tomatoes that the machines found easier to handle.
This, of course, is not simply in terms of migration, it also happens with respect to domestic markets.
Excessive, unaffordable and rigid "labour protection" laws (but world standard!) here drive either workers to be hired in the black market - affording zero protection - or for employers to substitute capital for labour which is more easily idled and/or rented out.
Nothing drives me... well few things.... okay among the many things that drive me to paroxysms of rage is seeing construction sites here using all kinds of advanced equipment when there is 20 percent unemployment. Hundreds of little ants on a somewhat crappy but far better than zero wage would be far better than using fancy concrete injection units and the like.
This aside, I find this suggestion batty:
Some economists argue that governments should simply set a quota of visas and auction them. Alternatively, they could set a price for the permits designed to achieve more or less the same number of sales. The principal virtue of both schemes is that they allocate visas according to private perceptions of their worth, not government guesses about need.
What I don't like about this is the monster chance of market distortions and failures. Visa auctions strike me as an astoundingly bad idea.
However, a suggestion here makes very much sense:
How can governments ensure that guest workers do not overstay their welcome? In South Korea, temporary workers contribute to a special account that is refunded to them if they leave on time and forfeited if they linger. The British government is thinking of asking some migrants to post a bond, like a defendant on bail, which they will lose if they choose not to return.
Bonds, or special accounts (with proper protections and earning a return) I think could work very well indeed. In developed markets. Of course in places like Dubai it would be nothing but a nasty scam, but what can we say?
Given the huge response in the Maghreb to the recent Spanish program to give seasonal visas for work on Spanish farms for harvest, and given the leakage problem, I rather think an interest and direct economic incentive program is something to be tried.
Posted by The Lounsbury at October 12, 2005 04:49 PM
Filed Under: Business, Private , EU Foreign Policy , Economic Development , Economic Policy , MENA Region General , North Africa , Society & Culture
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The illegalization of migratory work not only drives the workers into the black economy, it also creates a substantial market for smuggling human beings around border crossings - and of course that market has been filled. Which can't be a great outcome, from a security standpoint.
Posted by: Tom Scudder at October 12, 2005 02:57 PM
Also, it can be very attractive for an expat worker to make his pile overseas and then go back home where everything is substantially cheaper. (It's the kids, who've grown up in international surrounds, who have the real problem with going "back").
Posted by: Tom Scudder at October 12, 2005 03:02 PM
Not to mention that participants in "temporary" guestworker programs do have an odd tendency to stretch the bounds of the program into permanent stays...but by all means, when in Congress, never call it an amnesty! Because that would be wrong.
Posted by: Eva Luna at October 13, 2005 12:05 AM