Global Migration Is Reaching a Crisis PointAccording to a new report from the United Nations, 191 million people now live in countries other than the ones in which they were born.1 The sheer growth in the number of immigrants is accelerating at a blistering pace. Since 1990, the total number of immigrants has grown by 36 million, and one-fifth of them have moved to the U.S.
The UN report found that, surprisingly, the U.S. was not the top destination for migrants in 2005. Europe received 35 percent of them, while Asia was second at 28 percent, and North America was third at 23 percent.
The reason likely has to do with geographic and political barriers more than any preference for European or Asian countries over the U.S. It is far easier to migrate from Poland to France than from China to America.
According to UN Secretary General Kofi Annan, who presented the report to the UN General Assembly, “International migration, supported by the right policies, can be highly beneficial for the development both of the countries [immigrants] come from and of those where they arrive.”
While the statement that immigration can be beneficial is certainly true, it masks a much more complex issue. In some cases, immigration is beneficial; in other cases, it is not; and in still other cases, it is both good and bad.
Migration can bring advantages to the host country in the form of both skilled and unskilled labor. For example, as we reported in the October 2004 issue of Trends, at American colleges and universities, foreign students receive 40 percent of the advanced degrees in chemistry and biology, 50 percent of the advanced degrees in math and computer science, and 58 percent of the advanced degrees in engineering, according to figures from The National Science Foundation.2 Moreover, the NSF found that three of every four foreign citizens who received their Ph.D.s stay in the United States after graduation.
Also, as we explained in the December 2004 issue of Trends, the openness of our businesses to new ideas has flourished in tandem with the openness of our borders to new immigrants.3 For example, many of the key entrepreneurs behind the Internet boom were born in other countries and then moved to America:? Sergey Brin, who co-founded Google, was born in Moscow.? Sabeer Bhatia, who co-founded Hotmail, arrived from Bangalore.? Vinod Khosla, co-founder of Sun Microsystems, came from India.
The impact of these and millions of other immigrants on the U.S. economy, the number of jobs they create, and the amount of wealth they generate, is immeasurable. And, in addition to bringing innovative ideas and expertise, immigrants help the developed countries like the U.S. avoid labor shortages brought on by lower birth rates.
Many immigrants also help the economies of their countries of origin. As the UN report notes, the money sent by migrants to relatives in their homelands is now a significant part of the national income of countries such as the Philippines, Serbia and Mexico. At $226 billion worldwide, it is an even greater source of economic assistance than international aid.
However, the “brain drain” from developing countries to richer nations also deprives those countries of their most valuable long-term resource: human intelligence. Three of every five highly educated natives of Guyana, Haiti, and Jamaica have left the countries where they were born.
At the same time, the flood of unskilled laborers and the unemployed is much larger, and the costs to the host countries frequently outweigh the benefits.
For instance, in the October 2005 issue of Trends, we explained that 3 million illegal immigrants from Mexico enter the U.S. each year. According to a study by RobertJustich and Betty Ng of Bear Stearns,4 undocumented immigrants hold 12 million to 15 million American jobs, and add up to 8 percent of the U.S. workforce. They work primarily as day laborers for construction and home remodeling firms, landscaping contractors, and cleaning companies.
The study also estimates that between 4 million and 6 million of those jobs involve paying the workers in cash. This practice is illegal, but enforcement authorities simply do not have enough staff to adequately police this shadowy segment of the economy.
Barron’s5 magazine estimates the GDP output of this underground economy at $970 billion. And it argues that if payroll and income taxes were collected on this output, the government could wipe out the budget deficit and create a budget surplus.
This failure to collect taxes impacts U.S. citizens as well as federal, state and local governments, because these immigrants bring with them a need for social services such as health care, education, food stamps, and police protection. They also tend to increase the crime rate. And they compete with unskilled American workers, for jobs at the lowest depths of the labor pool.
Justich and Ng contend that, “The social expenses of health care, retirement funding, education, and law enforcement are potentially accruing at $30 billion per year.”
However, immigration is not just an American issue, but a global one. And, despite the social and economic problems it can cause, most nations do not want to restrict it further. According to the UN, only 12 percent of developed countries want to reduce immigration. Those countries are Denmark, Estonia, France, Italy, the Netherlands, and Romania. This represents a massive shift in policies toward immigration since 1996, when five times as many developed countries wanted to lower it.
But regardless of whether or not a country’s government officially welcomes immigrants or shuns them, the real test is how the citizens of the new nation react to the arrival of foreigners. Throughout the world, it appears that immigrants are welcomed when they try to assimilate into the culture of their new country by adopting the values, political beliefs, style of dress, cuisine, and language of their new neighbors. But, when they attempt to transplant their own culture to the new surroundings, friction is much more likely to result.
For example, the 3 million people crossing illegally into the United States from Mexico each year may bring with them a different background and a different language, but many of them embrace the values and ambitions of the American lifestyle. Most of them aspire to become Americans, with a house in the suburbs, children in good schools, and a new car in the driveway. They shop at malls, go to movies, and generally see achieving “the American dream” as a positive goal, even though it may seem out of reach to undocumented workers toiling in low-wage jobs.
By contrast, consider the situation in the United Kingdom, where most members of the rapidly growing Muslim population are making no effort to assimilate. In August, 24 Muslims were arrested in Britain for plotting to place bombs on airplanes. According toa recent article in the New York Sun6 by Daniel Pipes, a prominent analyst of Islamic politics and culture, there are now almost 2 million Muslims in the U.K., and a significant percentage of them are openly hostile to their hosts.
Pipes cites the results of several surveys of Muslims in London following terrorist bombings there. About 5 percent of Muslims endorse the attacks. Even among the Muslims who reside in London and would not endorse the bombings, 56 percent said they could understand why the terrorists carried out the attacks, 20 percent said they felt sympathy for their feelings and motives, and 13 percent said the suicide bombers should be considered martyrs.
In various surveys, as many as 18 percent of Muslims said they would not help the British police even if they knew a fellow Muslim was planning to launch a terrorist attack. Seven percent said they endorsed suicide attacks on British civilians, and 28 percent of 18- to 24-year-old Muslims living in London said they endorsed suicide attacks on British soldiers. One percent of the Muslims surveyed, representing 16,000 people, said they would be willing to use violence to destroy the “decadent and immoral” society in the West.
The surveys also show that 88 percent of Muslims want schools and workplaces to accommodate Muslim prayer times, 58 percent want people who criticize or insult Islam to face criminal prosecution, 36 percent believe British values threaten the Islamic way of life, and depending on the poll, either 88 percent or 93 percent identify themselves as Muslim first and British second.
This problem is not confined to Britain. As Muslims emigrate across Europe, countries such as France, the Netherlands, and Germany are facing similar problems within their own borders. For example, in the Netherlands, 6 percent of the population is now Muslim. Last year, an Islamic radical born in Amsterdam cut the throat of Dutch filmmaker Theo van Gogh, who had made a film critical of Muslims. The murder outraged people in the Netherlands and fueled attacks on Islamic schools and mosques, led to crackdowns on radical Muslim religious leaders, and brought an end to the country’s liberal immigration policy.
As Francis Fukuyama, professor of international political economy at Johns Hopkins, wrote in the Wall Street Journal,7 some of the blame for the friction must be placed on the strong national identities of European countries. Without a “melting pot” tradition like that of the United States, European countries are much less likely to make the second- and third-generation children of immigrants feel as accepted as they are in America.
According to Fukuyama, “[T]he Dutch, Germans, French and others all retain a strong sense of their national identity, and, to differing degrees, it is one that is not accessible to people coming from Turkey, Morocco or Pakistan. Integration is further inhibited by the fact that rigid European labor laws have made low-skill jobs hard to find for recent immigrants or their children. A significant proportion of immigrants are on welfare,meaning that they do not have the dignity of contributing through their labor to the surrounding society. They and their children understand themselves as outsiders.”
According to The New York Times,8 that sense of alienation makes many young Muslims vulnerable to the teachings of radical imams at local mosques.
In addition to the threat of terrorism, immigrants can also bring high crime rates to their new homelands. Consider Italy, where the crime rate has grown over the past two decades in parallel with the growth of the immigrant population.9 The Anti-Terrorism and Anti-Mafia Organization found that organized crime is flourishing in Italy, but instead of the Sicilian Mafia that became notorious in the Godfather movies, today’s Italian gangsters are transplants from China or Albania. Among the criminal activities that are on the rise are human trafficking, extortion, prostitution, drug dealing, weapons smuggling, counterfeiting, and money laundering.
Fortunately, the problem is not as pronounced in the United States. In fact, some studies of American cities have shown that there is not necessarily a link between large immigrant populations and high rates of violent crime.
However, The New York Times10 reports that illegal immigrants are responsible for many of the 10 million cases of identify theft each year. Illegal immigrants hold one of every 20 jobs in America, and most of them buy stolen Social Security numbers in order to get those jobs.According to the Times, the stolen numbers can be purchased in Mexico or in any immigrant community in the U.S. Exact numbers are hard to pinpoint, but every year the IRS discovers between 8 million and 9 million earnings reports in which the Social Security number and the name do not match. In Utah alone, the attorney general’s office recently found the Social Security numbers of 132,000 people were being used by other people.
The stolen numbers can be used to open fraudulent accounts that ruin the victim’s credit. Even when the thief simply uses the number to get a job, the victim can be denied disability payments or student loans because records show that someone with that Social Security number is working.
However, crime is not the only social issue that can inflame tensions between native populations and foreigners. Another issue is the high cost of social programs for undocumented immigrants. The Center for Immigration Studies estimates that every year, each illegal immigrant in the U.S. consumes $2,700 more in government services than he or she pays in taxes.
Some outraged Americans have responded to the threat they feel that immigrants pose to their own economic security in small but highly symbolic ways. According to The Christian Science Monitor,11 in Gwinnett County, Georgia, where the number of Hispanic residents recently increased to 105,000, the board of commissioners outlawed mobile taco stands. A similar law is being considered in Nashville, Tennessee.
In Hazleton, Pennsylvania, where the Hispanic population has grown from 5 percent to 30 percent, the town recently enacted a law that makes it illegal to rent homes to undocumented immigrants.Whether a country’s citizens feel threatened by terrorists or taco stands, the new reality is that the unprecedented growth in immigration is affecting every part of the globe. Policy makers can no longer ignore the consequences. They must recognize that their countries are being irreversibly transformed, for better or worse, by immigration.
Every developed country will have to come to grips with how to make their economies prosper while maintaining the country they want to live in. In Europe, the situation may have gone so far that a violent clash between indigenous xenophobes and immigrant zealots will become inevitable.Looking ahead, we offer the following six forecasts:
First, political stresses will intensify over the coming decade as each Western country tries to strike the right balance between using immigrants to offset the economic cost of declining birth rates and protecting its cultural identity and national security. According to the Wall Street Journal,12 the van Gogh murder played a big role in motivating the government in the Netherlands to pass laws discouraging Muslims from importing brides from the Middle East. Investor’s Business Daily13 reports that Australia is now telling immigrants to either assimilate or go home. The country’s Treasurer, Peter Costello, said in a television interview, “If you want a country which has Sharia law or a theocratic state, then Australia is not for you. This is not the kind of country where you would feel comfortable if you were opposed to democracy, parliamentary law, independent courts. . . . I would say to people who don’t feel comfortable with those values, there might be other countries where they’d feel more comfortable with their own values and beliefs.”
Second, developed countries will proactively recruit the skilled elites of the Third World to fill in the talent shortfall. The most effective mechanism will remain enticing Third World students to stay after earning advanced degrees at Western universities. Another tactic would be getting the best and brightest to emigrate from countries with political instability. This is analogous to the way the U.S. lured Europe’s top physicists to America for the Manhattan Project. Although developed countries will view the migration of their most talented people to richer countries as a “brain drain,” they will ultimately benefit economically from the money that these people will send back to loved ones at home.
Third, by 2012 policies will be put into place throughout the developed world to deal with excessive immigration of low-skilled people. Using demographic and economic forecasting techniques, these countries will determine how many less-skilled immigrants they will need to offset a labor shortfall in the service sector. They will also take proactive steps to identify everyone within their borders and keep track of them to ensure that non-citizens are adding value to the economy. The U.S. will lead the way, followed by the U.K. and Australia. In fact, the Trends editors argue that immigrationwill be the pivotal issue of the 2008 U.S. electoral cycle. In the U.S., laws will be amended to end most free social services for illegal aliens. A real “temporary worker” program is inevitable. This new system would require all non-citizens employed in the U.S. to register as “temporary workers.” Each of them would have to report at least annually on their verifiable job status. The minority who failed to report, or fail criminal background checks, would be arrested and deported. In addition, the children of non-citizens born in the U.S. will not automatically become American citizens. And the U.S. will build an impenetrable fence along the entire length of the border with Mexico to prevent immigrants from entering illegally. Among the legislative alternatives now under consideration, the policy proposed by Rep. Mike Pense of Indiana is closest to this plan.
Fourth, technological innovation will automate many of today’s low-wage jobs, and they will be done by machines. The building trades and agriculture have been automated significantly in the past 30 years, but a lot more can be done. The same is true for less-skilled health care and cleaning jobs. Until now, developed countries have not innovated because cheap low-skilled labor was available. If the alternative was low-skilled, high-wage native workers, we would probably have made more progress by now.
Fifth, the U.S. and other developed countries will develop a national policy about the level of immigration versus the level of outsourcing. Too many people want to have it both ways: They want strong economic growth with low costs and no inflation. At the same time, they want plenty of high-paying jobs in a country with the character and traditions of 50 years ago. The reality is that cheap products and services are only possible if we let immigrants enter the U.S. to take on low-wage jobs, or if we move many of those jobs overseas where wages are even lower. In the coming decade, policy makers will be forced to address this trade-off, ultimately reducing the chaos and hypocrisy.
Sixth, the beneficiaries of tougher immigration laws will be those who devise ways to profit from the transition we forecast. Among the current winners are companies operating private prisons to hold illegal aliens. According to The New York Times,14 12 months from now an average of 27,500 immigrants will be detained each night, at an average cost of $95 per night. The total cost amounts to $1 billion per year. Two companies, Geo Group and Correction Corporation of America, run half of the 16 federal detention centers. All of the government’s centers are full and it has no plans to build more, even though enough cells to hold 6,700 more people per night will be needed. That presents a big opportunity for the two companies, which have profit margins of more than 20 percent.It is no coincidence that their stock prices have risen since February, when President Bush announced plans to increase spending on detaining immigrants. Geo’s stock has gone up by 75 percent, to $40.85, and Correction Corporation’s stock has increased 31 percent to $55.73. Their ticker symbols are GEO and CRX, respectively.
References List :1. To access the information about global migration statistics, visit the United Nations website at: www.un.org 2. Pittsburgh Post-Gazette, October 20, 2003, “Europe Fights Brain Drain of Scientists Leaving for United States,” by Michael Woods. ⓒ Copyright 2003 by PG Publishing, Inc. All rights reserved. 3. Harvard Business Review, October 2004, “America’s Looming Creativity Crisis,” by Richard Florida. ⓒ Copyright 2004 by the President and Fellows of Harvard College. All rights reserved. 4. To access the Bear Stearns report “The Underground Labor Force Is Rising to the Surface,” visit their website at: www.bearstearns.com 5. Barrons, January 6, 2005, “Going Underground,” by Jim McTague. ⓒ Copyright 2005 by Dow Jones and Company. All rights reserved. 6. The New York Sun, July 11, 2006, “What British Muslims Think,” by Daniel Pipes. ⓒ Copyright 2006 by The New York Sun. All rights reserved. 7. The Wall Street Journal, November 2, 2005, “A Year of Living Dangerously,” by Francis Fukuyama. ⓒ Copyright 2005 by Dow Jones and Company. All rights reserved. 8. The New York Times, August 13, 2006, “Many Muslims in Britain Tell of Feeling Torn Between Competing Identities,” by Sarah Lyall and Ian Fisher. ⓒ Copyright 2006 by The New York Times Company. All rights reserved. 9. To access the commentary “People and Crime Often Cross Boarders,” visit the Voice of America website at: www.voanews.com 10. The New York Times, September 4, 2006, “Stolen Lives: Some ID Theft Is Not for Profit but to Get a Job,” by John Leland. ⓒ Copyright 2006 by The New York Times Company. All rights reserved. 11. Christian Science Monitor, July 19, 2006, “Backlash Emerges Against Latino Culture,” by Patrik Johsson. ⓒ Copyright 2006 by Christian Science Monitor. All rights reserved. 12. The Wall Street Journal, November 2, 2005, “A Year of Living Dangerously,” by Francis Fukuyama. ⓒ Copyright 2005 by Dow Jones and Company. All rights reserved. 13. Investor’s Business Daily, August 14, 2006, “Worth Preserving.” ⓒ Copyright 2006 by Investor’s Business Daily, Inc. All rights reserved. 14. The New York Times, July 19, 2006, “Immigration Enforcement Benefits Prison Firms,” by Meredith Kolodner. ⓒ Copyright 2006 by The New York Times Company. All rights reserved.
