International migration is becoming one of the defining issues of global politics. In almost all the Western nations, migration constitutes one of the top three issues of concern on the minds of voters. International migrants have become the target of social anger, with reactions ranging from paranoia to violent hatred. Migrants are looked upon with a great deal of suspicion in host countries because they allegedly contribute to crime, depress wage rates, raise home prices and rents, and constitute a fiscal drain through the costs of integration and associated social entitlements.
There are cultural factors as well. Migrants are different in many ways — in the colour of their skin, their religion, their language, in the food they eat, and the clothes they wear. Citizens of the host nations, especially the ones with economic grievances, look for obvious targets to focus their anger on. It is easy to hate people who are different. Many political parties encourage this mindset. In doing so, they receive populist electoral support, which helps them put other important economic issues on the back-burner.
The complex tension between the migrant as having a different identity and the economic consequences of migration needs to be distinguished. Human migration — large-scale, drawn over long periods, set across distant geographies — has taken place from ancient times. Our species was supposed to have originated in Africa and, then, with different rounds of migration, we have the world that we now live in. In ancient times, as well as in the contemporary world, human beings migrate for two reasons: in search of better social and economic opportunities; or to survive serious natural or political threats.
There is extensive academic research available on the economic effects of international migration on the host nations. These are complex issues in the sense of who arrives from where, for what objectives, what age group do they belong to, what skills they have and so on. Details of some of the empirical research may throw up differences but by and large, some robust results emerge from the large volume of research output. For instance, in most cases, the arrival of migrants does not raise home prices or rents — unless there is an existing housing shortage or problems with the construction industry. Similarly, there is no significant spurt in crime although there have been few instances where migrants have clashed with local people. In labour markets, wages have been known to rise, fall, or remain constant in the migrants’ destination geographies depending on the nature of work in which the migrants obtain employment and the effect on aggregate demand from the new income generated through additional employment. Finally, as far as the fiscal pressure on taxpayers’ money is concerned, overwhelming evidence suggests that even though fiscal outflows increase initially, over time, the contributions of the migrants constitute a net inflow into the national coffers. What is important to note is that none of the common reasons cited for migrants being economically disruptive stands up to serious scrutiny.
Another question often posed is this: are there too many migrants? There are estimates that suggest that during the past one-and-a-half-decades, global migration has been, on an average, around 8.5 million per year. This number includes highly-talented people, bright young students, and even elderly people moving to a more comfortable climate after retirement. This flow constitutes only about 0.1% of the current global population. The narratives around the issue of size centre almost exclusively on two international borders — the border between the United States of America and Mexico and the Mediterranean Sea. Yet, much less than half of the flow of migration accounts for these two borders.
While surveys suggest that migration is one of the most important concerns on the minds of voters, the analysis of actual voting patterns reveals an interesting trend. Whether in the US, the United Kingdom or European nations like France or Germany, geographies that house the largest number of migrants vote for relatively liberal political parties and not for far-Right ones with an explicit anti-immigration agenda. During voting for Brexit, for instance, London, where the largest numbers of migrants in the UK are located, voted ‘stay’ overwhelmingly, while the northeastern parts, with much less migrants, voted ‘leave’. Similarly, in the US, the rust belt with fewer migrants votes Republican, while states with the highest density of migrants — California, New Jersey, New York — vote Democratic. Similar patterns are discernible in European nations too.
What could then be inferred from this trend? One significant change, over the past three-and-a-half decades, has been a systematic shift of labour-intensive manufacturing industries away from Europe and the US to Asia, especially to China. This has led to severe economic disruption for workers involved in these industries. Numerous urban spaces have declined into ghost towns, with jobs and incomes lost forever. The typical person affected would be White, male, blue-collared worker in his mid-fifties. For this constituency, modernisation was bad economic news all along. This class has been disproportionately hurt with the relocation of the brick-and-mortar industries.
Some other parts of the economy have prospered during the last three decades — particularly information technology and modern finance. But these developments left the dislocated population without any benefit. The new developments were taking place by employing the best talent with high skills drawn from around the world, particularly India and China. Those in the sunset industries of the Western world were not left to starve. The social safety nets are still strong enough to support these adversely affected persons. On the other hand, the developments in technology and finance led to the emergence of many new, low-skill, service-sector jobs, mainly in the hospitality and retail sectors of the economy. These jobs do not have formal contracts,
9-to-5 shifts, and the other tropes of a stable labour market. These jobs began to attract migrants with low skills, but they were willing to work harder.
The West has to politically accept that the days of its hegemony are over. This global transition will be painful for many sections of its societies. However, that is not something for which migrants can be blamed for or held accountable. As technology changes and greater automation emerges in the age of Artificial Intelligence, labour displacements will become much more frequent.
More social disruptions are on their way. The developing parts of the globe will not be spared either as they too are intricately tied to global supply chains and financial networks. The new forces that are emerging appear to be strong. However, there are many doubts about what their overall effects might be. Social irritations and anxieties are too many and too spread-out to offer short-term hope. The world will keep changing. We need to reinvent a politics that is more inclusive, caring and tolerant of differences. Over time, the world and its people will get more mixed up, independent of whether some of us like migrants or not.
Anup Sinha is former Professor of Economics, IIM Calcutta
