By Jonny Lupsha, Wondrium Staff Writer
Spanish police arrested a group smuggling migrants into the E.U. from Bosnia. The organization collected money from those fleeing to Europe and stuffed more than 75 at a time into trucks. Immigration affects both involved countries’ economies.
An illegal immigration operation centered in Spain led to several arrests Thursday. Spanish police arrested the group’s leader and 15 employees, who reportedly made millions of euros trafficking paying immigrants across the Balkans to the European Union (EU), beginning in Bosnia and ending in Spain. Francisco Davila Gutierrez, head of the illegal immigration unit for Spain’s national police, said in a press conference that migrants were primarily Pakistani nationals.
Even when done through the proper legal channels, immigration of workers from one nation to another affects the economies of both countries involved. In his video series America and the New Global Economy, Professor Timothy Taylor, Managing Editor of the Journal of Economic Perspectives, explained how sending and receiving nations change with immigration.
Migration Trends
According to Professor Taylor, in the mid-2000s, the world had 180 million migrants—that is, people living in a different country from the one in which they were born. This was roughly 3% of the world’s population. In 1960, there were 75 million migrants, but that was still 2.5% of the global population at the time. While the per capita rate of immigration has increased, it hasn’t gone up by as much as we imagine.
“The big change in the world is not the total level of world migration, but a difference in where the movements are coming from and where they are going,” Professor Taylor said. “For example, if you look at the high-income, developed economies of the world, in 1970, 3.6% of their population was international migrants. By 2000, it was up to 8.7% of their overall populations.”
North America led the pack in this change. In 30 years, from 1970 to 2000, the number of migrants in the United States and Canada rose from 5.6% of the population to 12.9%. It’s also a given that people leaving low-income countries for high-income countries experience a huge increase in their standard of living. It’s also the largest effect of immigration, period.
“When you look at the costs and benefits of immigration for every side—the sending country, the receiving country—probably the single biggest effect is the gains to the immigrants themselves,” Professor Taylor said. “There’s nothing wrong with that, but as a public policy, it sort of feels like a lottery. That is, there is a relatively small number of winners with relatively concentrated gains.”
However, he noted, there is a tendency sometimes to ignore the migrants themselves and focus on how immigration affects the citizens of the sending country and the receiving country. The effects are considerable for both countries.
Hello, Neighbor
How does receiving immigrants affect an economy? According to Professor Taylor, high-income countries receive a small but overall positive gain from immigration, citing a National Academy of Sciences study that said the U.S. economy gains $10 billion per year. However, there are drawbacks, as well.
“There are some other studies in the United States that suggest that wages for low-wage workers might over time be something like 3% to 5% lower than they would have been if immigration hadn’t been so high,” Professor Taylor said. “That’s real, especially if it’s you that’s experiencing a 3% to 5% lower wage, but it’s a relatively modest difference.”
That difference could also be offset by the benefits to the economy, more competitive businesses, or cheaper goods in some areas, but a lot of it comes down to opinion.
The other often-cited negative aspect of receiving immigrants is the effect on government budgets. The federal government receives more money in taxes from migrants than their local and state counterparts do. Those entities are the ones paying bills related to schools, parks, police, and local services. The federal government often promises relief to areas affected by heavy immigration, but according to Professor Taylor, they often fail to deliver.
When You’re Gone, I’ll Go Mad
“Those in countries that send emigrants might suffer from ‘brain drain,’ as it’s sometimes called, but they might also benefit if the emigrants send home remittances,” Professor Taylor said. “A remittance is just a payment that an immigrant makes back to their home country—remittances are just huge. Toward the tail end of the first decade of the 21st century, they’re on the order of $250 billion a year.”
Remittances are larger than foreign aid.
“Brain drain” refers to the fear that skilled, motivated, educated workers will injure the economy of a low-income country by leaving for a high-income country. Is it better for them to stay and help the low-income country’s economy or to go to another country and potentially send back huge remittances? The debate continues.
Immigration is an incredibly complex economic web with no simple or absolute answers. Much of any person’s or country’s stance on immigration involves personal beliefs and opinions as much as facts.