Archive for the 'Migration' Category

I am Britralian

… being both British and Australian.  It only took seven and a half years of living in Ol’ Blighty to do it.  The ceremony took place in the chambers of the Camden Council Hall — all dark timber and green leather.  There were about 30 of us in the ceremony.  Roughly half chose to swear their allegence by God, and half to affirm it without any religious reference.  Now I get to wait six weeks before getting my British passport.

Becoming British

I’ll never try to pretend that a Scottish tennis player or a bunch of South African cricket players are English, but today I sent off my application for naturalisation as a British citizen.  My grandmother would be proud.

How bad is human trafficking?

Adam pointed me to this review in the New Statesman by Brendan O’Neil of “Sex at the Margins: Migration, Labour Markets and the Rescue Industry” (Foyles, Amazon) by Laura María Agustín. Here is the core of the review:

Agustín points out that some anti-trafficking activists depend on numbers produced by the CIA (not normally considered a reliable or neutral font of information when it comes to international issues), even though the CIA refuses to “divulge its research methods”. The reason why the “new slavery” statistics are so high is, in part, that the category of trafficking is promiscuously defined, sometimes disingenuously so. Some researchers automatically label migrant women who work as prostitutes “trafficked persons”, basing their rationale on the notion that no woman could seriously want to work in the sex industry. The Coalition Against Trafficking in Women argues that “all children and the majority of women in the sex trade” should be considered “victims of trafficking”. As Agustín says, such an approach “infantilises” migrant women, “eliminating any notion that women who sell sex can consent”. Ironically, it objectifies them, treating them as unthinking things that are moved around the world against their will.

The reality is very different, the author says. Most migrant women, including those who end up in the sex industry, have made a clear decision to leave home and take their chances overseas. They are not “passive victims” who must be “saved” by anti-trafficking campaigners and returned to their country of origin. Rather, frequently, they are headstrong and ambitious women who migrate in order to escape “small-town prejudices, dead-end jobs, dangerous streets and suffocating families”. Shocking as it might seem to the feminist social workers, caring police people and campaigning journalists who make up what Agustín refers to as the “rescue industry”, she has discovered that some poor migrant women “like the idea of being found beautiful or exotic abroad, exciting desire in others”. I told you it was controversial.

One of Agustín’s chief concerns is that the anti-trafficking crusade is restricting international freedom of movement. What presents itself as a campaign to protect migrants from harm is actually making their efforts to flee home, to find work, to make the most of their lives in often difficult and unforgiving circumstances, that much harder. She writes about the “rescue raids” carried out by police and non-governmental organisations, in which even women who vociferously deny having been trafficked may be arrested, imprisoned in detention centres and sent back home – for the benefit of their own mental stability, of course. It used to be called repatriation; now, dolled up in therapeutic lingo, it is called “rescue”.

For all its poisonous prejudices, the old racist view of migrants as portents of crime and social instability at least treated them as autonomous, sentient, albeit “morally depraved”, adults. By contrast, as the author illustrates, the anti-trafficking lobby robs migrants of agency and their individual differences, and views them as a helpless, swaying mass of thousands who must be saved by the more savvy and intelligent women of the west and by western authorities.

It’s fascinating stuff and goes along with what I’ve previously said about prostitution:

[Slavery] aside (and that’s what people trafficking is – slave trading), you cannot simply save or rescue a prostitute. It is not a problem, if you consider it one, to be tackled. It is not something that you solve, once and for all. Prostitutes are people like everyone else and like everyone else, they think on the margin and respond to incentives.

In that entry I labelled human trafficking as slavery and I stand by that. Nevertheless, it would appear from Agustín’s work that the scale of the trafficking problem may be smaller than we commonly believe.

Western Union and incomplete (financial) markets

Via Tyler Cowen, I came across a fascinating article at the New York Times:  “Western Union Empire Moves Migrant Cash Home.”  Tyler is bang on the money when he calls it consistently interesting throughout.  What really grabbed my attention was the last few paragraphs:

[Western Union] has an estimated global market share of 14 percent, versus 3 percent for its closest competitor, MoneyGram. Though Western Union has responded to increased competition by cutting its charges, it typically remains the most expensive service.

An Oakland group, the Transnational Institute for Grassroots Research and Action, began a boycott campaign in September, demanding that Western Union lower its prices and increase its corporate giving. But it has gained little traction, in part because of the company’s recent courtship of migrant groups.

One critic who now gives Western Union grudging credit is Donald F. Terry, an official at the Inter-American Development Bank. He has spent years trying to get more migrants to use banks, so they could establish financial histories and qualify for loans.

But banks have not fully welcomed migrants, he said, while Western Union and other money transfer companies have more locations, better hours and agents who know their customers’ language and culture.

“You could say they were ripping people off, or you could also say they’re providing a service that poor people desperately needed and were willing to pay for,” Mr. Terry said. “Any consumer company in the world would like to have the customer loyalty they have. They’re doing something right.”

I’ve always been a bit surprised at the rates that financial intermediaries are able to charge.  Whether we’re speaking about “instantaneous” money transfer ala Western Union, money lenders charging 80% (an usurer in the U.S., a life-changing charity in Africa), or the rates charged by bail bondsmen, they’re enormous.  Why?

To a large extent it’s surely to do with a lack of competition, but given the profitability of these ventures, why don’t we see new entrants?  Why don’t we see country- or even region-specific competitors to Western Union?  Where is the all-Spanish-speaking competitor that is staffed entirely with Latinos in the US working off a natural, built-right-into-the-community advertising mechanism?  Even with enormous risk premiums, lending money at 80% is much, much more profitable than putting it in a US-based deposit.  Why don’t people based in that developing country do it?

Update:  Okay, okay, the market isn’t incomplete if there are transactions taking place, but there are real economic profits being made here.  What are the barriers to entry that are keeping suppliers away?

The benefits and perceived costs of immigration

This article discussing migration to Britain, the benefits it brings and British reaction to it, was recently on the front page of the FT. Some key points:

Britain’s willingness to absorb migrants … have brought “undoubted economic benefits”, John Reid, home secretary, said last year. By helping to fill skills shortages and keeping a lid on wage inflation, immigrants have helped produce stronger economic growth.

[However,] 47 per cent of Britons believe migration by workers within the EU has been negative for the economy and only 19 per cent think it has been good. Asked whether there should be stricter controls to prevent workers from central and eastern Europe entering the country, 76 per cent of Britons agreed.

A friend of mine questioned whether these two sentences from the article were contradictory:

The Bank of England believes that the large influx of migrant workers has contributed to lower inflation by helping to contain wage growth. David Blanchflower, a member of the Bank’s monetary policy committee, said last month there was little evidence that immigrants from eastern Europe had depressed the wages or employment chances of British workers.

They’re not – they’re saying that migrants have caused wage growth to fall (first sentence) but it has remained positive (second sentence), meaning that wages themselves are not falling – but it does raise a key point in understanding why people feel economically cheated in an environment of high immigration.

Suppose that Price Inflation tomorrow is equal to Wage Growth today minus a bit related to “real” growth in the economy (which is plausible), but when considering their Wage Growth today, workers compare it to Price Inflation today. Then we might have (all figures are percentages):

Inflation today: 2

Without immigrants
Wage Growth today: 3
Perceived benefit: 3-2 = 1
Inflation tomorrow: (3-n)
Actual benefit: 3 – (3-n) = n

With immigrants
Wage Growth today: 1
Perceived benefit: 1-2 = -1 (!)
Inflation tomorrow: (1-n*)
Actual benefit: 1 – (1-n*) = n*

If you also suppose, as the BoE clearly believes, that the ‘n’ actually increases with immigration (n* > n), then people are unambiguously better off with immigrants coming in, but believe that they are worse off.