Is Migration Key to Economic Growth?

Migration is the Key to Economic Growth.

Recently you must have seen in the news about the Canadian immigration Policy. The United States also changed the visa norms pretty frequently. The same thing we get to see in European Union Countries as well. So overall, we will try to understand where are the positive and negative impacts of Immigration as well as why countries invite immigrants and what does it lead to? 

You must have heard in the news that Canada’s Minister of Immigration Refugees and Citizenship, Sean Fraser, has said Canada is increasing its intake of immigrants into the country to as many as 4,75,000 by 2024.

So first, we will try to understand the meaning of Immigration and Emigration. Immigration means people are coming from other countries into your country. For example, I am an Indian. If people come from different countries to 

India, they are called immigrants. At the same time, Emigrants means when someone from your country moves to another country. Emigrant means from one location, such as one’s native country or region, to live in another place. Immigrate means when someone outside moves into a non-native country or region to live. To make it easier, look at the spelling of the word “Immigrate” the letter “I” in Immigrate means “In”; similarly, the letter ”E” in ”Emigrante” means “Exit.” 

Now you have understood the meaning and difference between Emigration and Immigration. Now we will understand the basic Idea behind Immigration and why people move to other countries, states, or regions. 

What is the Idea behind Immigration?

If I have to answer this question in just two words, that would be “Economic Growth.” Now let me elaborate on this. The ultimate and primary goal behind inviting Immigrants is to keep the Economic Engines of a country running. The whole concept behind the immigration policy is never to let economic growth stop. 

If I have to give an example to make you understand this, then think of the Banks. Why do you think banks give loans? They provide loans for the people so they can obediently pay monthly installments for a given period. To keep banks running in Business. Banks are not to fulfill your dreams. They try to make it look that way. All they care about is whether or not you will pay them the principal amount plus interest for an agreed period. Banks only finance you so that you can keep them in Business.

Now similarly, Immigration policy is also based on the concept of Never ending growth. To keep the economy developing, you need human resources, and that too low cost skilled human resources.

Immigration policies are not at all designed to fill up the empty lands. It is not like some countries are feeling lonely. Hence they decided to invite some people from outside to come and share their life with us, and we all will live happily. It is not like that. Although they try to sell and market it that way to attract it, it is not the case. 

So always remember that the primary goal behind inviting Immigrants is to keep the economic engines of the Country Running. 

United States, Canada, and western European countries, today, wherever they are, it is just because of immigrants. These countries rely on farming, fishing, manufacturing, healthcare, and transportation immigrants. Since the last two years, because of the pandemic, almost every country’s economy has been badly hit. Inflation is high, so naturally, the next step is economic recovery. They are keeping that in mind. Canada has increased its intake of immigrants.

Effects of Immigration 

In every debate, there is a proposition team and an opposition team. Likewise, in this topic, some arguments support the idea of Immigration, and then some views oppose the concept of Immigration. I will place them side by side and try to understand every point. 

People who were in support of Immigration tend to have views like ;

• Better Economic Opportunities lead to a better quality of life. 

This point is very valid because this is not related to a particular country. People have been moving from one village to another, from villages to towns, from smaller towns to bigger towns, and from bigger towns to cities to pursue better Economic Opportunities and quality of life. 

• More Innovation, entrepreneurship, and technological change. 

High-skilled Immigration has brought Innovation, entrepreneurship, and technological change, which positively impacts wages and employment. Even if this statement is true, we need to understand that when we say immigrants, it consists of a different range of people. Not all have the same level of skill set. We differentiate labor into unskilled, semi-skilled, and skilled labor. 

Skilled labor refers to that which requires a certain amount of training or skills. This work can be seen in electricians, administrative assistants, doctors, plumbers, and more. Skilled workers are either blue-collar or white-collar. These Workers need to have a set of specialized skills to perform their job effectively. 

Unskilled labor refers to work that does not require any particular set of skills or formal education. Unskilled labor includes cooking, housekeeping, cashiers, grocery farmers, etc. 

Then semi-skilled labor refers to the work that is of general routine nature. It requires a very minimum level of education. Examples are truck drivers, retail salespeople, bartenders, flight attendants, taxi drivers, waiters, security guards, customer service representatives, and entry-level administrative assistants. Now an immigrant can be part of any of these categories.

High Skilled immigrants are an asset to the country, and it is also true that they brought more Innovation, entrepreneurship, and technological change. 

• Immigrants tend to be younger than the population of their receiving country. 

Immigrants tend to be younger than the population of their receiving country. This means that immigrants can be a replacement for a lower fertility rate and the rising age of the western population, which even the government of the West recognizes and admits. This point is the main point of all the western governments. All these western countries need more young people, but why? That more young immigrants would not only grow the economy but also lead to the working-age population, leading to a more productive and prosperous economy. 

The governments of western countries are aware of this. They know that the young immigrants will keep the size of the labor force from shrinking, and that way, the immigrants can take the load of their country’s debt. If you look at Canada, the United States, and European Countries, they have substantial national debts.

Who do you think has to pay the national debt of the country? It is the citizens and stages people who work there and live there. Any obligation is socialized among the general public, specifically the working population. Suppose a certain percentage of native workers retire every year. That would require more workers to stay in the workforce so that they can continue paying taxes, and with that tax money, pensions and health care can be supported.

Suppose the working power of the United States or any European country is insufficient to keep the old retired population. In that case, that will rapidly deplete the social security funds of these countries. Leaving older Americans, Canadians, and Europeans unable to access the support they invested in their whole careers. 

So to support their healthcare and pension funds, these countries desperately need immigrants and young immigrants so that they can take the load of the so-called developed country’s national debt.

Likewise, people who are against Immigration tend to think like ;

• Lead to cultural change or assimilation

If more and more people from outside come to a place, it will lead to cultural change or assimilation.

It also creates enormous markets for low-skilled laborers, and then the native workers have this feeling that immigrants are going to take over their jobs. When there are too many people available for a single, and then there is an increase in labor supply from the foreign-born competition, then naturally the wages will decrease for the paid worker, and this is true in low-skilled and labor activities like child care preparation, house cleaning, repair, and construction. So basically, Immigrants lower the cost of some labor activities. 

Hence, on the one hand, some people hope for a better living when moving to a new place. There is nothing wrong with that. People have all sorts of hopes, but at the same time, it also puts the native workers in a tight spot. So whenever there is an immigration debate, these are the most common argument for the native population. 

Opposition to Immigration has become a significant political issue in many countries. The native population opposes Immigration because they fear losing their sense of belonging to their nation, represented by distinct traditions, culture, language, and politics.

Then it is also believed that immigrants may isolate themselves in their communities, forming self-organized communities where they live according to their own culture. Sooner or later, that gets reflected in politics when the immigrant population increases because we all know that in politics, demography matters. 

• Long term, it is good, but in a short time, skilled native-born workers face a depression in their wages. 

But then any immigrants, irrespective of their skill set, must spend a certain amount of time in a new place to understand the ecosystem they grow. Finally, a few of them might become entrepreneurs or a significant change. It does not happen overnight.

It takes a few years, and it takes decades. It is a long-term effect of migration but saying that highly skilled immigrants can bring a positive impact on the wages and employment of the native workers is an oversimplified argument. I am not saying that this argument is wrong. It is just not that simple. 

Office, immigrants are very successful and may create jobs that benefit the native workers. Still, we must understand that this is a long-term effect of Immigration. In the short term, low-skilled native workers face a depression in their wages because of an increase in the labor supply from foreign-born competitors. 

• Depletes resources 

The young generation must face tough competition from foreign-born competitors in the job market. A large inflow of immigrants will undoubtedly increase the population of a particular place. A significant influx of people reduces the per-capita size of the land of the native country. Immigrants will soon start owning houses, social security benefits, healthcare, etc.

This will put a higher burden on social welfare systems, housing, and public schools, and then over some time, instead of focusing on the well-being of the native peoples and their health, the policy of mass Immigration in these western countries will create a market for low-cost housing, banks, and low-cost labor employers and that will create a perfect engine of inequalities. 

Conclusion 

Many such concerns are associated with Immigrants; however, on the other side, people who live there are called Emigrants. Emigrant means to escape from one location, such as one’s native country or region, to live in another. Large-scale Emigration leads to a situation where a nation loses its best workers.

 For example, skilled workers in developing countries such as India get attracted by relatively better pay and working conditions in developed countries such as the United States, Canada, and western Europe, which leads to brain Drain and has adverse side effects. Office Immigrants send their money back to their families in their home countries; it’s called Remittance. Again Remittance has its own positive and negative impacts on a country which we will discuss later. So, every country must properly and diligently evaluate how many immigrants to let in. We have to be careful and not disturb the balance. 

Think of it this way, suppose you stay in one place. You are used to the culture and emotions of this place. Suddenly your Business gets flooded with Immigrants from other sites who have completed different cultures and practices. At the same time, there will be a rise in anti-immigrant sentiments, which is happening in western countries. It is not a hidden thing anymore. 

The government needs to avoid that. Office and politics are played well when there is divide and rule, but the conveniences at the most extreme level may result in racial tension and discrimination.

 Similarly, the source country has to evaluate its action plans and do everything possible in terms of development to keep its Human resource intact. Plus, it is common sense that if the home country provides everything, there is no need to migrate or relocate. Because the fact of the matter is migration is costly and does not necessarily lead to an immediate improvement in living standards, but still. Many people migrate from Asian countries to western countries for material gain.

Surprisingly you also have to look at another angle. Many people and families search for spirituality and not for economic gains. This is also a unique perspective when studying the immigration debate. If you see, western countries are marketing and promoting heavily to attract people from different countries, majorly from Asian countries.

They tend to say that come here to have a good life, staying here you can have a good life-work here, have a good lifestyle, American dream, Canadian dream, European dream… appropriate government policies are commercially selling everything. Then we also see the opposite foreign citizens abandoning those fast-moving lifestyles and coming to India for spiritual life.

India is not even promoting or doing marketing, and foreigners are coming to India because they are fed up chasing the American, Canadian, and European dreams. Many realize that you have one life and don’t need to get stuck in the keratin stick policy.

Presently significant beneficiaries of the Canadian immigration policy will be Indians because India is the single largest source of immigrants to Canada, so each year, Indians move to western countries in search of Better Economic Opportunities. Similarly, each year, many, many foreigners migrate to India in search of spiritual life. 

So anyhow, western immigration Policy continues to be based on never-ending economic growth. Perpetual economic growth is neither possible nor desirable as you know natural resources are limited. Secondly, when you look at the world growth, especially in the context of wealthy nations, it is already causing more problems than it solves.

Edited by Prakriti Arora