The Pros And Cons Of Migration Economics Essay

At the start of a new millennium, migration has become more evident than ever before. Growing political instability around the world, tied with the fact that economic growth is significantly declining, has resulted in the uprooting and displacement of millions of people either for political, environmental or economic reasons. Rising poverty is pushing these individuals to move in search of work and a better. Images of a better life in The Bahamas, and indeed the world are being published through the media that now reaches the most remote areas and communities of many poorer countries such as Haiti. This research endeavored to explain the pros and cons of migration in the Bahamian society Benefits include an increase in labour supply, and a decrease in wages. In contrast, the negative effects include increased competitiveness in the job market and a potential increase in unemployment for locals

Research Questions / Goals

Migration is an important component of population studies. Discuss the pros and cons of migration in Bahamian society.

The pros and cons of migration in the Bahamian society is the focus of this research paper. This paper will attempt to examine the effects of international migration on labour supply, wages, the job market and unemployment.

Limitations and delimitations

Unfortunately, there is very little published research on the impact of migration on the Bahamas. Therefore, the research approach undertaken involved the use of secondary data from both international and local organizations along with contemporary writings from local economists’ in order to obtain an objective overview of the benefits and implications of migration on the Bahamas. This research is limited in any conclusive results on the impact of migration, as the Government of The Bahamas has not tabled any qualitative or quantitative research holistically outlining the impact of migration on The Bahamas.

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Methodology

This is an exploratory research used secondary data to determine the pros and cons of migration in Bahamian society. Relevant data pertinent to this research was collected through a secondary research method including archival research, internet-based research and library research. Additionally, a comparative study of different international and peer-reviewed documents relevant to this paper was carried out; and a series of theories, concepts and ideas were summarize and explored.

Introduction

In a world of escalating poverty, natural disasters, economic instability and adverse environmental changes, thousands of families are daily uprooted out of their homelands and forced to migrate to other parts of the world in search of a better way of life. Many of them have to confront and survive the impediment presented by nature, along with the many physical and psychological challenges that they encounter along their migratory journey and while assimilating into a new country. Paradoxically, many of them succeed in embracing the better future they were looking for, whereas, many of them experience the exact opposite of their hopes and dreams.

According to Britannica Encyclopedia Migration seemingly falls into several broad categories. “First, internal and international migration must be distinguished. Within any country there are movements of individuals and families from one area to another (for example, from rural areas to the cities), whereas, international migration is movement from one country to another. Second, migration may be voluntary or forced. Most voluntary migration, whether internal or external, is undertaken in search of better economic opportunities or housing. Forced migrations usually involve people who have been expelled by governments during war or other political upheavals or who have been forcibly transported as slaves or prisoners. Intermediate between these two categories are the voluntary migrations of refugees fleeing war, famine, or natural disasters”.

The United Nations (UN) and The International Organization of Labour (ILO) estimates, out of the 175 million migrants worldwide, 120 million are migrant workers and their families. Today, ILO estimates, there are roughly 20 million migrant workers, immigrants and members of their families across Africa, 18 million in North America, 12 million in Central and South America, 7 million in South and East Asia, 9 million in the Middle East and 30 million across all of Europe. Western Europe alone accounts for approximately 9 million economically active foreigners along with 13 million dependants.

Over the last several decades, The Bahamas has experienced a significant surge in the immigration population. According to the 2008 Annual Report from the Department of Statistics “one in eight residents in the Bahamas is foreign born, reflecting a 61 percentage increase in the foreign-born population over a decade since 1990, and a 21 percent rise over the last six years” (2008 Annual Report). It is estimated that by 2025, the population will double, with the Bahamas gaining an additional 337,000 residents from outside of the country. Immigrants are the fastest growing segment of the population in this country. “In Nassau alone, between1990 and 2000 there was a 43 percent increase in the foreign born-population. Currently there are 250,000 persons who are residents of Nassau, an estimated 17 percent of whom are foreign born according to The Department of Immigration (2006 Annual Report, Department of Immigration). The Bahamas for decades offered unequal social, political and economic opportunities for most migrants seeking a better way of life. Because of these opportunities many migrants migrate to the Bahamas for economic reasons than the country is willing to admit.

Pros and Cons of International Migration in Bahamian Society

The Bahamas’ economy is small, open and according to Kevin Higgins, it exhibits all the characteristics of Caribbean type economy. It differs in growth pattern moving from primary production to tertiary production or a service based economy. This growth has lead to high levels of national income and a dependency on import. Labour markets in the Bahamas are perfectly competitive due to the presence of unions and consequently are only able to adjust in the long-run. This static in wage setting requires government intervention during period of economic downturn to ensure achievement of optimal employment level and limited management of employer viable cost. International migration has both benefits and negative effects in Bahamian society. Benefits include an increase in labour supply, and a decrease in wages. In contrast, the negative effects include increased competitiveness in the job market and a potential increase in unemployment for locals. However, the case for deciding how to handle the massive arrival of international migrants will ultimately depend on how one view our national objectives.

An International Monetary Fund (IMF) report entitled Workers’ Remittances; cites that relaxing immigration policy could generate substantial economic benefits. It acknowledges that the increase in labour supply will contribute to decrease in wages. Business owners in the Bahamas are likely to welcome this, as it would represent a decrease in their operating cost and another opportunity to optimize profit. Likewise, an increase migrant population can help to reduce labour shortages in areas in which Bahamians are not inclined to work such as agriculture. Secondly, it can increase productivity in such areas. Some studies show migrants are more receptive to market forces. Thirdly, the local spending by migrants in contrast to natives enhances what economists’ term, “the multiplier effect” within the economy, which allows for increased internal circulation of monies thus, creating more business opportunities for locals. In 2004, the former governor of the Central Bank of the Bahamas Julian Francis called for allowance of more foreign labours to offset ongoing high wage demand of labour unions, which he considered unreasonable, advocating for policy change in regards to migrant.

However, for the local workers and their union decrease wages, can result in increased job inefficiencies and potentially increase unemployment for locals. According to the same report generated by Ratha, a study by Borjas, Feeman and Kaz for the IMF it founded that the effect of immigration on wages were negative in the US with a 21% increase in unskilled migrant workers reducing wage earnings of all unskilled workers by 5%. It cited another study by Smith and Edmonston (1997) which found that unskilled workers with no high school education were a fiscal burden on subsequent generations.

The resident workforce in The Bahamas is seemingly more incline to work or choose the traditionally approved white collar jobs where salaries are higher thus, making it more effortless for migrant workers to fill vacancies in the so-called dirty, difficult and dangerous job areas. However, countries with a limited work force and a small population like the Bahamas would be at a disadvantage to nations with larger populations, as citizens of these populous countries like Haiti, Jamaica and Trinidad with weaker economies would migrate to the Bahamas due to its strong economic position, as is the current crisis with immigrants. This was the key reasons behind the Bahamian refusal to sign on to the Caribbean Single Market Economy, which required the free movement of labour. Today idealist would argue that limiting one to the country of birth or origin is outdated and that we are citizens of the world. Further proposing that mass migration, integration by various countries e.g. Caricom and the Caribbean Single Market Economy, European Economic Community, the propose transfer of rights and sovereignty from individual countries to the governing bodies and thus, the resulting laws aimed at coordination within these countries, affecting free movement of people, is not outdated and merely a hindrance to progress.

Many immigrants arriving in The Bahamas, especially those from poorer countries such as Haiti have a low educational level and are more likely to be unemployed or economically inactive than the domestic population. The social cost of migration is difficult to quantity in the absence of holistic empirical data deuced through continuous research. This include the increased cost on both the educational and medical service as the Bahamas is a part of international treaties and conventions to make such services available to all persons notwithstanding their legal status. Additionally there is the further cost of cultural fear generated by small pocket communities, potential increase in crime, development of social crises indigenous to the migrant culture, uncontrolled population expansion and other negative externalities that migration presents. With a high inflow of migrants there is always an increased pressure on the welfare of the state and the taxpayers will eventually have to pay for the increased level of government spending needed to extend the economy’s infrastructure. Additionally, there is also a risk of higher unemployment if the arriving migrants do not match the demands of the growing industries in the economy thus, leading to an increased pressure on scarce resources.

Unfortunately, our major industry tourism is still suffocating due to the continued rise in fuel prices and the onset of trouble in the world financial markets. The tourism industry saw a decline in cruise revenue in 2006. In 2007 sea visitors which represents 67.7% of all visitors declined by 4.0% to 3.1 million and air visitors by 0.4% to 1.49 million (Central Bank 2007). This contributed to declining numbers at Bahmar, Atlantis, and Our Lucaya hotels who experienced significant lay-offs in 2008. Additionally the Bahamas economy declined from 9% in 2006 to .6% in 2007 and almost crashing to 1.0% in 2008. This was influence by the global financial meltdown and a positive linear increase in the price per barrel of oil from B$37.41 to B$64.20 from 2004 to 2007 and its adverse impact on fuel cost locally (Central Bank 2007). However, most studies conclude that immigrants do not necessarily compete with local workers for the same jobs. This is because labour markets in the receiving countries are often segmented and local workers may wish to avoid certain menial jobs.

Craton and Saunders (2000) in an historical analysis of migration from the 1950s to the mid-1990s, including a thorough description of Haitian-Bahamian relations during that period asserted that Haitian nationals were blamed for every social and medical ill conceivable: TB, cholera, AIDS, malaria, prostitution, drug dealing, theft, violent crime, gang warfare, etc. (Robertson, 2002, National Commission on Crime, 1998). Many or perhaps all of them were viewed as increasing competitiveness in domestic job markets and as an excessive burden on The Bahamas social and medical infrastructure, and the reason for the increase cost of national security and erosion of cultural values. Additionally there was contagious fear generated and circulated by natives, herald by the mass media, and proliferated by political agendas that the coming of migrants into The Bahamas in particular Haitian migrants meant a potential increase in crime, and the development of social crises indigenous to the migrant culture – influenced and catapulted by uncontrolled population expansion and other negative external situations that migration presents.

Local Economist Olivia Saunders states that ” when the labour market in The Bahamas is dense the economy gains from new labour inflows but the effects could be uneven on different groups of the population”(Saunders pg. 3). Since most migrants coming to The Bahamas are low skilled workers, employers of low wage labour and consumers of agricultural and fishing products, would be in a better position to benefit. But high labour inflows could reduce wages and other benefits at the lower end of the work force. For a country like The Bahamas that already faces high unemployment, as in the Western World today, immigration implies additional competition in the labour market. With the advances of globalization, the diminishing arrivals of air and sea tourists, the mounting oil prices, and the constant demands for more monies to meet the salaries of public servants, increased immigration could pose as a serious detriment to our labor industry, where more and more Bahamians are being forced to take jobs that were once reserved for immigrants. However, most studies conclude that immigrants do not necessarily compete with local workers for the same jobs. As aforementioned this is because labour markets in the receiving countries are often segmented and local workers may wish to avoid certain menial jobs. The growing inflows of migrants in The Bahamas will inevitably decrease the real wages of domestic workers and lead to an increase in low skilled workers, thus driving down the equilibrium wage for domestic low-skilled employees.

Another con of migration in general is the strategy by some countries to use the migration and consequential citizenship of its nationals in other countries as means of survival and establishing a sub-state within another country. Thus, expanding their political power as is the predominate fear in the Bahamas of a Haitian uprising. Therefore, countries battling mass migration must be on guard against a shift in political power that would encourage other nations to exploit migration and consequential citizenship to their advantage. These novel citizens send money and resources back home, establish communities that bound them with their home country, using such to gain political advantage and then the international advantage for homeland.

Some nationals who attain political power have the opportunity to determine and influence the behavior of their new country and its inter-relation with their former home. [1] The experience of Florida in the 1980’s is a recent example. The ‘Cubanisation’ of Miami occurred within South Floridian politics and The State of Florida economic practices have greatly been affected by its migrant populous. The Cuban migrants have become the most important decision makers with many attaining highly visible political offices, such as Joe Carollos, Xavier Suarez, Alex Penelas, and Carlos Alvarez including a string of Cuban descendants who became Mayors. One may view policies by such individuals as motivating and fostering the Cubanisation of their area and not Americanization. [2] Another example was steps taken by the Mexican government in providing its citizens with maps for crossing the Rio Grande into America arguing that this prevented the loss of lives. However, critics argued that the Mexican government in this instant focused on the economic benefit remittance that its nationals presented. [3] 

Crowding is one of the basic disadvantages of immigration in the Bahamas. The migration of people from one country to another eventually leads to crowding in another nation. This implies an excessive use of some of our vital resources and may lead to an imbalance in our natural resources. Continued population growth and immigration have social consequences. For a sparsely populated country like the Bahamas, population growth can bring real benefits. But beyond a certain point continued population growth has the potential to create tensions and even conflict amongst groups within this country and between other countries. According to the 2008 Annual Report from the Department of Statistics “one in eight residents in the Bahamas is foreign born, reflecting a 61 percentage increase in the foreign-born population over a decade since 1990, and a 21 percent rise over the last six years” (2008 Annual Report). It is estimated that by 2025, the population will double, with the Bahamas gaining an additional 337,000 residents from outside of the country. Immigrants are the fastest growing segment of the population in this country. “In Nassau alone, between1990 and 2000 there was a 43 percent increase in the foreign born-population. Currently there are 250,000 persons who are residents of Nassau, an estimated 17 percent of whom are foreign born according to The Department of Immigration (2006 Annual Report, Department of Immigration). However, the population growth of migrants is primarily caused by natural increase, that is, the excess of births over deaths. But in any particular region, migration will cause population growth when the amount of immigration exceeds the amount of emigration. And in the Bahamas at present, migration is a greater cause of population growth and natural increase. Both population growth and migration can affect the quality of the natural environment, the likelihood of conflict, and social cohesion between ethnic groups. In our view, the significance of both population growth and migration are often underestimated by governments and non-governmental organizations. Immigrants may also bring in diseases that prevailed in their country. Pathogens, viruses and certain serious infections have a chance of being transferred between countries through immigrants. To reduce the risk of such transfer of diseases, the Bahamas have started carrying out a screening of immigrants on their arrival.

In particular while many Bahamians (the public and the government) complain that Haitian nationals are using health, education and social services to the exclusion of Bahamians, St. Jacques presents data provided by the Ministry of Health (1991 report) that only 15% of patients at the national hospital, Princess Margaret Hospital, were Haitian nationals. Similarly, use of the educational system by Haitian nationals from surveys made in 1991 and 2005 show that 7.85% and 8.85% of students, respectively, are Haitian nationals (Stubbs, 1994, Bain, 2005). She concludes therefore that the “problem” is less about Haitian nationals using services but more about Bahamian concerns regarding national and cultural sovereignty, what is known in the Bahamian press as “creolization”. In her conclusions, St. Jacques determines that in fact, the second generations of Bahamian-born children of Haitian migrants are well assimilated, have obtained an education and for all intents and purposes are “Bahamian”. The “Haitian problem” has metamorphosed from the scourge of illegal migrants into a problem of granting citizenship to “Haitian

As the world stands on the brink and threshold of becoming globally integrated, the Bahamas will inevitably have to revise its present immigration policy structure to specify what type of migrants we are going to embrace. In addition, as regional ties become stronger and new hemispheric trade agreements become implemented, the Bahamian populace will eventually have to learn to appreciate and accept the diversifications that already exist. It is imperative for Bahamians of all walks of life to understand the power of a diverse skilled and unskilled labour force in our pursuit for continue national development and global integration. Perhaps, after debating the issues surrounding immigrants the Bahamian people will place all economic concerns aside and choose a policy that stresses human rights, or domestic partisan advantage. Nonetheless, the public ought to know of the economic consequences of migration, and the potential economic gains from giving higher priority to more skilled migrants. Bahamians should be fully aware of the price they will pay if the country sticks with a migration policy that minimizes or ignores economic benefits.

The longer term benefits and costs of migration in the Bahamas are very hard to quantify and estimate in the absence of real qualitative and quantitative data. Much depends on: the types of people who choose to migrate from one country to another, the ease with which they assimilate into the Bahamas, whether they find full-time employment and the extent to which a rise in labour migration affects an increase in the government capital expenditure. Whether workers who come to the Bahamas decide to stay in the longer term this may involve members of their extended family joining them or whether they regard migration as essentially a temporary exercise (e.g. to gain qualifications, learn some English) before moving back to their country of origin must also be factored into perspective when examining the overall issues related to migration. As aforementioned migrants may increase unemployment in certain areas, but this in many instances can be compensated by them raising the overall level of demand, like housing and household-related goods, needs etc. This promotes both a higher level and a wider range of goods and services produced, stimulating the economy and job growth. Migrants also bring new skills and experience to the recipient country. They help to reduce labor shortages for skilled personnel, and also attract international traders through their foreign knowledge and language skills.

According to the ILO, “contemporary immigrants overwhelmingly do what newcomers have always done; slowly, often painfully, but quite assuredly, embrace the cultural norms that are apart of life in the Bahamas. Still as a purported Christian nation, we must continually ask ourselves whether or not we are doing enough. Do we have the right institutions in place, and have our existing institutions been structured to accommodate the needs and gifts of our nation’s newest members? As a nation we cannot in any instance rely on mass immigration to solve the problems arising from an inadequate agricultural industry and our alleged labour shortages in the fishing industry and other domestic areas. Mass immigration is not an effective solution to these problems. To the extent that they are real, such problems can only be effectively tackled by mobilizing the under-utilized talents and energies of the existing population. This does not mean that there is no economic benefit at all from immigration. It will always be in our collective interest to admit skilled and talented people. But this is happening already.