Global Labour and the Migrant Premium

The Cost of Working Abroad

Tugba Basaran, Elspeth Guild

• Publisher: Routledge
• Year: 2018
• Print ISBN: 9781138606999
• eBook ISBN: 9780429884467
• Topic: Politics & International Relations
• Subtopic: Labour Economics
• Index: Politics & International Relations

This book provides the first systematic account of the premium costs that migrants pay to live and work abroad.

Reducing the costs of international labour migration, specifically worker-paid costs for low-skilled employment, has become an important item on the global agenda over the last years and is particularly pertinent for the UN's Global Compact on Safe, Orderly and Regular Migration. Recruitment costs alone amount in most migration corridors to anywhere between one and ten months of foreign earnings and many migrants may well lose between one and two years of foreign earnings, if all costs are considered. This book is intended as a primer for evidence-based policy for reducing the costs of international labour mobility. The contributors include academics from law, economics and politics, but also authors from international organizations, non-governmental organizations, as well as the voices of migrants. The hope of the editors is that this small collection sets the basis for evidence-based policies that seek to reduce the costs of international migration.

This book will be of interest to scholars and students of migration, globalization, law, sociology and international relations, as well as practitioners and policy makers.

1 The premium

Tugba Basaran and Elspeth Guild

We will commit to reducing the costs of labour migration …

(New York Declaration for Refugees and Migrants 2016, para 46)

Over previous years, reducing the cost of migration has become central to the global agenda.¹ As high-skilled workers are enticed to cross borders by the promise of higher wages and lofty benefits, low-skilled recruits are considered indefinitely dispensable and bear tremendous costs for working abroad.² For low-skilled employment, including domestic, agricultural, factory and construction work, recruitment costs alone can amount to ten months of foreign earnings and many are likely to lose one to two years of foreign earnings, if all worker-borne costs are considered. The poorest and most marginalized often pay the highest premium.³ This collection provides the first systematic account of costs borne by migrants, that is the premium that migrants pay to live and work abroad. In the following, we seek to reveal what these premium costs entail, how they are distributed and who encounters them where.

An inquiry into the migrant premium appears particularly pertinent today. In 2015, an estimated 244 million persons lived in a country other than where they were born, with a large majority moving for purposes of employment.⁴ The international community has repeatedly asserted the benefits of international migration, particularly for sustainable development: at more than US$430 billion, recorded remittance flows of migrants and diasporas to developing countries are more than three times the official development assistance and commonly higher and less volatile than foreign direct investments.⁵ For many countries, remittances represent the largest source of foreign exchange earnings, and for some even more than one-fourth of their GDP.⁶ Migration is increasingly conceived as a (potentially) triple-win situation, beneficial to sending countries, destination countries and the migrants themselves. In spite of the numerous benefits of migration, nonetheless it remains excessively priced for the majority, with workers in low-skilled occupations carrying the highest burden.

In this collection, we focus on the premium that low-skilled migrants are exposed to. Contrary to many other studies, our conceptual framework, the migrant premium, illuminates the core actor, the migrant. It requires data-collection and analysis centred on migrants and their journeys, underlining costs and burdens that they encounter in countries of origin, destination and transit – a holistic analysis of the migrant premium.⁷ This collection is intended as a primer for evidence-based policy for reducing costs of international labour mobility.⁸ Our contributors include academics from law, economics and politics, but also authors from international organizations, including the United Nations, World Bank, ILO, non-governmental organizations, as well as the voices of migrants. Each contribution provides a short and concise expertise on the migrant premium.

Analysing the premium

So far studies on costs of labour migration have largely focused on up-front financial costs, comparing them with the promise of foreign earning streams at later time periods (returns) in an effort to analyse the micro-level decision making process of individuals and households (Sjaastad 1962).⁹ In contrast hereto, in this collection, we investigate all additional costs for international (compared to national) labour throughout the migration cycle. The disparity of costs between national and international workers is calculated as the sum of (a) up-front costs for recruitment, but also (b) differentials in wage, working and social conditions in the destination countries, as well as (c) return costs. We state that there is a significant differential between net foreign earnings and the “take-home pay” received after many years abroad, if all costs are considered. Migrants relinquish a significant share of their foreign earnings during the migration cycle, leaving them with severely diminished returns due to direct and indirect costs (differentials, deductions, portability of contributory schemes). But financial costs are only one set of costs encountered by the migrant. There are also less easily quantifiable burdens, barriers and vulnerabilities that migrants are exposed to, including social, legal and health costs. It is the variety of these migration specific costs and burdens that we refer to as the migrant premium.

It is important to point out that the economic analysis of the premium must be understood in the context and subject to states’ obligations under international human rights law. We have looked at that in a sister volume already published, but we would like to reiterate here that international human rights obligations almost without exception apply equally to citizens and migrants.¹⁰ In undertaking international human rights obligations, states commit themselves to a floor of rights applicable to everyone, and below which they must not fall, without risking violation of their international duties. First and foremost among those international human rights obligations is the obligation of non-discrimination (and equal treatment) in the delivery of all human rights. Discrimination against migrants on the basis of their status as non-citizens is subject to two regimes in international human rights law. First, for non-derogable human rights such as the prohibition on torture, discrimination on the basis of status is never lawful. Second, for derogable rights, such as family life, any difference in treatment between citizens and migrants must be justified normally to the standard of necessity in a democratic society. Hence, the migrant premium should not only be considered as an economic transaction cost that needs to be diminished, but also analysed in relation to international legal instruments. The reduction of the migrant premium and associated costs may be, under certain conditions (such as prohibited discrimination), not only a desirable outcome, but an international obligation. The table in this introduction (Table 1.1) anchors the migrant premium firmly within the requirements of international human rights law complemented, where applicable, by other international instruments, such as international labour law, refugee law and the sustainable development agenda.

Lastly, we would like to underline that, while the migrant premium is a universally valid concept, it is important to keep in mind that the premium is exposed to strong contextual fluctuations. It varies widely according to journeys and migration corridors, and determinative factors, such as legal status, the destination country (and even locality), the work sector and family composition, strongly influence the premium. Transaction costs are imposed by political, economic and legal institutions. The premium is extracted by various actors, including the destination state directly (i.e. visas, integration tests, language test), indirectly (such as rendering family reunification difficult) and market costs (i.e. wage differentials and housing prices), including an array of public, semi-public and private actors. Therefore, our starting point of analysis must be the economic lives of migrant workers.

Economic lives

The economic lives of migrant workers and the capital accumulation process are anything but smooth. The wages received by migrant workers need to cover not only their own consumption in the host country, but family consumption at home, and generate a surplus for investment at home: minor investments in a house or in a small business, possibly also for retirement. The aspirations of migrant workers and their families are not much different from those of citizens. These small objectives are put to the test abroad, however, due to the migrant premium. Migrant workers are burdened with additional costs throughout the migration cycle: limited channels for travelling to the host country and finding employment, coupled with high cost for intermediaries, visas and also uncompetitive rates for travel are only the starting point. Living separated from their families requires payment for a second house, food and often also for the care of children as well as grandparents and relatives. After consumption here and there, covering the foreseen and the unforeseen (calamities, sicknesses, funerals), the migrant worker still needs to accumulate investment capital. To send money home, migrant workers will also have to pay for financial services. Many cannot rely on banks, even if they have an account; service to their regions of origin are limited and at fees that can even outbid alternative money transfer services. Of course, this does not yet include the non-quantifiable factors – the mental stress, children growing up without one parent (or sometimes both), the impossibility of caring for grandparents. Then, there are a particular set of costs for returning to the home country: if migrant workers opt to go home after years of ser...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright page
• Table of Contents
• List of illustrations
• Notes on contributors
• List of abbreviations
• 1 The premium
• 2 Legal status and vulnerabilities
• 3 Precarious work and residence
• 4 Worker-paid recruitment costs
• 5 (In)equality in wages and working conditions
• 6 The health costs of irregular migration
• 7 Migrant risks and insurance
• 8 The criminalisation of irregular migrants
• 9 Access to justice
• 10 Migrant incomes, Big Issue sellers, penalties and confiscation regimes
• 11 Agricultural workers
• 12 The migrant tax – how children and young people pay to exercise mobility rights
• 13 Migrant remittances in the face of securitization
• 14 Gan’s journey from Thailand
• 15 Then and now, here and there: personal and academic perspectives on migration
• Index