According to the United Nations, International Migration Report 2017, the number of international migrants has steadily increased from 173 million to 220 million and 258 million worldwide as computed in 2000, 2010 and 2017 respectively. In 2017, 67% of all international migrants were living in just 20 countries. The largest number of international migrants (50 million) resided in the US. The Kingdom of Saudi Arabia, Germany and the Russian Federation were home to the second, third and fourth largest numbers of migrants worldwide (around 12 million each), followed by the United Kingdom of Great Britain and Northern Ireland (nearly 9 million). In 2017, India was the largest country of origin of international migrants (17 million), followed by Mexico (13 million). Other countries of origin with large migrant populations include the Russian Federation (11 million), China (10 million), Bangladesh (7 million), Syria (7 million) and Pakistan and Ukraine (6 million each).
According to the Economic Survey of India 2017, between 2011 and 2016, the inter-state migration in India was about 9 million per year. The 2011 Census 2011 data shows the total number of internal migrants in India (both within and between states – movement) as 139 million. UP and Bihar are the biggest source states (from where people migrate), followed by MP, Punjab, Rajasthan, Uttarakhand, J&K and West Bengal, while the major destination states (to where people migrate) are Delhi, Maharashtra, TN, Gujarat, Telangana and Kerala. This massive movement of labour and people between countries and within the same country has a huge impact on the economies of nations and it is important to study its various aspects.
CASE STUDY – UNITED STATES OF AMERICA
There are around 50 million immigrants in the US about 14% of the entire US population. Immigrant parents live with 16 million American born children (you automatically acquire US citizenship if you are born there, a provision that is being opposed by Trump). These children along with their families make up 25% of the American population. Almost a fourth of all immigrants in the US are illegal or undocumented. According to an article in Newsweek (Benjamin Fearnow, 9 Sep 2018): “Two-thirds of U.S. GDP expansion since 2011 was “directly attributable to migration,” and any cuts to immigration would damage economic gains and hindering innovation, a new report from Citigroup and Oxford University, revealed by the Financial Times on Sunday, said. The study found that the risks of migration inherently draw entrepreneurial-minded people into the U.S. workforce. Despite making up only 14 per cent of the U.S. population, migrants have founded 40 per cent of businesses on the Fortune 500, and about 30 per cent of all the country’s businesses since 2011, including more than half of the startup businesses now valued at over $1 billion”.
Immigrants with higher education generally tend to take up scientific and technical jobs where advanced communication skills are not required. Thus, immigrants do not dominate domains such as management and media. Clearly, the largest economy of the world with the highest number of immigrants is largely driven by immigrants. However, what is the economic logic behind this policy?
IMMIGRANTS AS SUBSIDY TO EMPLOYERS AND TAXES TO GOVERNMENT
Renowned American Marxian economist Richard Wolff explains the economic benefits of hiring immigrant workers. This is in the American context but is applicable in many other situations as well. Wolff says: “The key basic point with which to begin is this: immigration, particularly of poorer desperate people fleeing either poverty, or war, or political, or criminal violence is an enormous subsidy to employers. Maybe people have tried to get into the United States on many occasions but whether or not they were allowed in, have usually been dependent on the political attitude of employers. If employers were against it, it did not happen; and if employers were, for it, it did whether or not employees supported it; and the reason for that is simple: immigration is a subsidy to employers.
“Here’s the very simple way this works: immigrants especially if they are undocumented, or even if they are documented but have to wait for citizenship, which they all have to do at least for many years, then they are vulnerable. Employers can underpay them, and often do. Employers can take advantage of them by treating them in an inappropriate way, by abusing, exploiting, and otherwise skirting the law. And the reason they can do all those things, which are profitable to them to do, is because the immigrant, precisely because he or she is undocumented, or in a limbo state before getting citizenship, is afraid to go to local authorities to demand restitution.
“He or she is afraid to demand minimum pay, as the law allows for fear that their undocumented status will get them in trouble with the police, or immigration authorities will deport them. In other words, the employer has something on them way beyond what the employer has on the typical native-born American worker and you can be very sure employers understand that, and take full advantage of it. Nevertheless, let us go beyond the direct subsidy to employers that immigration has always provided to capitalist employers in the United States.
“Let us ask the next question: do immigrants pay taxes? And the answer is of course they do. The immigrant pays exactly what everybody else pays when he or she buys anything subject to a sales tax; and the sales tax is a very important tax in the United States. If an immigrant owns a home, he or she pays a property tax; if an immigrant rents an apartment, part of that rent goes to the landlord to cover the landlord’s property tax; so the immigrant is the indirect payer of the property tax; and then there are excise taxes in this country. For example, on tobacco products, on gasoline that you buy at the gas station, whenever an immigrant buys a pack of cigarettes, or put fuel in his or her car, they are paying excise taxes, so guess what immigrants pay lots and lots of taxes.”
POLITICAL COMPULSIONS
Politicians generally loathe immigration. Most of them understand its economic benefits but cultivate a vote bank made of those impacted by jobs taken up by immigrants. Then there is the question of race, culture, language and simply the right of the “local” over the resources of the land.
Dealing with immigration is and will always remain a challenge for any country. However, it is undeniable that immigration diversifies local economies; strengthens the global economy through remittances, even the population distribution, lowers the crime rate (immigrants tend to avoid any brush with the law), encourages entrepreneurship, blunts labour gaps and boosts sagging economies. The real winners are those countries that can balance their political compulsions with their economic interests.