Op-Ed: Debunking economic myths of migration

Mark Baum, a character in Adam McKay's "The Big Short" (2015) who was based on the famous investor Steven Eisman, infamously said, “In a few years, people are going to be doing what they always do when the economy tanks. They will be blaming immigrants and poor people.” Many western countries are no strangers to this kind of immigrant-alienating rhetoric. The negative perception of Polish and other Eastern European workers was among the primary drivers of pro-Brexit ideology, while President Trump’s anti-migratory narrative played a crucial role in his successful presidential campaign. Therefore, it is evident that the fear of the negative economic impacts of migration still strongly dominates the public and political perception of the issue. But perhaps the strongest component of this fear is the timeless argument that immigrants are “taking our jobs.” But, are they really?

Filipinos form the largest applicant pool for the nursing profession in the United States, ahead of Indians and Puerto Ricans. Over 10,000 Filipinos applied to be nurses in the U.S. in 2018, citing “superior hourly pay” and significantly better working conditions compared to back home. The shortage of American nurses is exacerbated by the aging nurse population coupled with fewer youths choosing to become nurses. This supply shortage can be fulfilled by a foreign workforce that is happy to compete for jobs in the service industry. To answer the question of whether or not migrants are taking the locals’ jobs, one must understand the impact of migration on the stakeholders: migrants themselves, the host population, the economy and the society. Sir Paul Collier, renowned Economist at the University of Oxford, argues in his book "Exodus" (2013) that while immigrants benefit significantly from higher wages, so does the host country. Low-skilled immigrants enter the host country’s economy to compete for jobs that the host population does not desire. By filling the shortages in labor supply, immigrants increase economic output per capita, thereby positively impacting the host country’s economic growth. In Geoffrey Cameron and Ian Goldin's book "Exceptional People" (2011), the authors argue that even if migrants compete for high-skilled jobs in their host country, they create a “net economic stimulus due to specialization” of occupation. By specializing in their field with higher motivation compared to the population of the host country, they are able to raise economic output. Goldin also argues for the net economic positives of migration by stating that “two-thirds of U.S. growth since 2011 is directly attributable to migration.” He also stated that if Germany had prevented migration, their net economic loss would have been over  €155 billion. The only stakeholders suffering as a result of rising economic immigration, according to Collier, are unskilled and low-skilled workers from the host country because they are crowded out of the market by migrants eager to take lower wages and work longer hours.

However, any analysis of the consequences of rising immigration is perfunctory without considering the rate at which migrants integrate into the host society by moving away from their diasporas, or their absorption rate. Collier argues that unless the absorption rate is low, like in the case of cyclical migration from South Asian countries to Dubai, the economic benefits of migration are outweighed by its social consequences. He cites Harvard Professor Robert Putnam’s study which found that diversity tends to reduce “social solidarity and social capital.” Simply put, the aversion to immigrants generates a greater negative net impact for a society.

 Although Putnam’s study has been challenged by statistics that show higher cohesion in ethnically diverse countries such as Australia, New Zealand and Singapore, the emphasis lies in the host societies' acceptance of immigrants as crucial components of growth. More than half of startups in America valued over $1 billion, and over 40 percent of Fortune 500 companies were created by migrants. Therefore, while the low-skilled host population faces competition for jobs, migrants actually provide a positive net impact to their host economy by raising output per capita, filling the labor shortage and contributing to innovation. The principal impediment to social benefits is the host society’s attitude towards migrants, which needs to become more welcoming.

What other myths of migration would you like to see busted?  If you are interested in learning more about this pressing issue, join the Institute for Global Leadership and students from around the world at this year’s EPIIC Symposium: “Migration in a Turbulent World,” from March 7–9.

The symposium will consist of three days of far-reaching discussions on issues critical to the understanding of pressing challenges on migration which include the tensions between state sovereignty and global migration; the policies that allow the continued existence of slavery and human trafficking; the impacts of South-to-South migration; the vanguard role cities play in migration from the securitization of migration; and the roles gender and climate change are playing and will play in future policies.

The full schedule and free tickets can be found here.