Экономические науки/2. Внешнеэкономическая деятельность

Student Boiko A. I.

Donetsk national university of economics and trade named after Mykhailo Tugan-Baranovsky, Ukraine

World labor migration: gains and losses

 

In today’s globalized economy, the issue of international labor migration is one of the most critical – yet largely unexplored – issues for our member companies and all businesses operating globally [1].

During the era of globalization, the phenomenon of international migration drew immense attention, so much so that the growth in the movement of individuals worldwide stands equal to that of goods and capital. However, from a part of world population, the supply of migrants increased marginally to 2.9% in 2009 from 2.5% in 1960 [2].

Labor migrants now represent roughly 190 million people, or about 3 percent of the world population. They are an increasingly vital part of the global workforce. Despite immense attention to general working conditions in global value chains, little specific attention has been given to this large and vulnerable segment of the workforce [1].

The total global income gains from even small increments to labor mobility could be quite enormous. It has been estimated that a 3 percent expansion of global migration could generate a larger increase in world incomes than a complete liberalization of all trade flows.

What drives these massive simulated gains are the gaps in earnings between the poor and rich nations. When the gap in earnings of unskilled workers between some of the poorer and richer nations exceeds twentyfold, transfer from the low to high earnings settings potentially offers huge gains. In the process of these simulated changes, the migrants themselves are, by far, the largest winners. In reality we know that a significant portion of the gains to migrants are now siphoned off by various forms of middlemen.

Migration is becoming increasingly commercialized: agents are commonly hired to aid with access to visas and overseas jobs; smugglers charge high fees for bringing irregular migrants across borders; money-transfer intermediaries charge exorbitant rates. Nonetheless the net potential gains to migrants entering the industrialized countries are extremely high.Yet the impacts of any additional migrations on the incomes of those left at home and of natives in the host countries is more ambiguous. While migrants are clearly the big winners, others may even lose [3].

The net impact of migration is positive for the migrants and high-income countries, and more gains are feasible. At the same time, there are more ambiguous effects on developing countries, which may suffer from growing brain-drain; only temporary migration among southern hemisphere countries seemed to provide clear benefits. The impacts of  labor migration are:

·  Impact on world income: Some economic simulations have suggested that even a 3 percent expansion in global migration could increase world incomes more than a complete liberalization of all trade. 

·   Impact on recipient countries: In some cases, migration can accelerate technical progress or force changes in industrial activities—such as an increase in labor-intensive forms of agriculture. 

·   Impact on sending countries: Remittances from migrants back to their home countries can promote rapid growth in developing regions, and the withdrawal of laborers can induce higher wages or less underemployment for those left behind. However, remittance flows can decline quickly and unexpectedly, as currently observed in Mexico. Migration of highly skilled workers can become problematic through “brain-drain” of talented healthcare workers and educators in developing regions.

·  Relationship between trade and migration: Subsidies in many industrialized countries often protect the sectors in which migrants seek work. There is little or no coherence between the trade and migration policies adopted by higher-income countries. Better internal coordination is necessary to reconcile the two agendas.

·  Policy implications: Many countries prefer a policy of temporary migration, in which migrants contribute to the local economy but depart before they become dependents [4].

We can thus conclude that the total profits incurred by the industrialized nations are quite high. Yet the bearings of any extra migrations on the earnings of those residing in the home countries and of citizens in the receiving countries are more uncertain. While international migrants are on the advantageous position, others may lag behind in the race.

 

References:

1. Cratner A.International Labor Migration: A Responsible Role for Business [Electronic resource]. - Access mode:

http://www.bsr.org/reports/BSR_LaborMigrationRoleforBusiness.pdf

2. Globalization and International Labor Migration // Business Maps of India [Electronic resource]. - Access mode: http://business.mapsofindia.com/globalization/international-labor-migration.html

3. Lucas R. International Labor Migration in a Globalizing Economy // Carniege Endowment for International Peace [Electronic resource]. - Access mode:http://carnegieendowment.org/files/international_migration_globalizing_economy.pdf

4. Lucas R. International Labor Migration in a Globalizing Economy // Carniege Endowment for International Peace [Electronic resource]. - Access mode:

http://carnegieendowment.org/publications/index.cfm?fa=view&id=22272