Immigration Policy and the Philippine Diaspora


Screen Shot 2013-04-27 at 3.44.58 PMI’ve spent the past seven years living in foreign countries, almost all of that time with my wife (who I met at very early in this journey) who hails from the Philippines. One thing that made us a great couple was that neither of us had a strong desire to go home, so the whole world always seems at our fingertips. We’ve wound up, for now, in what is essentially a fishing village in the South China Sea just off Hong Kong Island. We’ve talked about going back to America, looked at jobs in UK, made serious plans for Australia at one point, and I’ve recently even floated the idea of Myanmar or Manila. On a very personal level, I get the positive side of immigration and the free flow of people because I live it every day.

Paul Collier, of The Bottom Billion fame, has penned a new book called Exodus that highlights the downsides of immigration and calls for restrictions. A summary on Tyler Cowen’s blog reads:

…those who migrate from the poorest countries, primarily though not exclusive the young, tend to be the best educated and most energetic in their cultures. And while migrants often benefit economically, the larger impacts of mass migrations remain unsettling. The danger is that both host countries and sending societies may lose their national identities– an outcome that Collier suggests would be disastrous as national identity is a powerful force for equity. Collier asserts that migration must be restricted to ensure that it helps those who remain in sending countries and also benefits host societies that make the investment on which migrant gains rely.

The Center for Global Development‘s Michael Clemens, who I usually agree with, said he was “stunned” by this argument. Along with many other development scholars, he has been making a strong case lately for the economic benefits of migration. The one-sidedness never sat right with me, and though I thought Collier’s cultural argument wasn’t a strong one, the description of the immigrants as “[tending] to be the best educated and most energetic in their cultures” was spot on, if partial. In the Philippines, a global diaspora extracts both the most talented from the top and the most desperate at the bottom.

Because of the sheer scale of the issue, the Philippines is a useful place to see where (or if) immigration has gone too far. More than 10% of the population has left the country to find work elsewhere. My wife’s family is a case study of white collar immigration in the Philippines: of a family with three children, the two highest achievers left the country in their mid-20s. And they were high achievers – my wife graduated at the top of her class and went to a top university on academic scholarship, her sister works in international banking. The third sibling, who never finished college, stayed behind. Of my wife’s friends who stayed behind, two of the closet friends married men who work abroad. Two of my wife’s aunts even live in Japan. On the lower end of the human capital scale is our (very part-time) housekeeper. She left her two kids, husband, and a one hectare farm behind to work in Kuwait and now Hong Kong (her unemployed husband has taken to keeping the farm farm).

Everywhere you look in the Philippines – from the most remote island to Makate – are reminders of the diaspora: Western Unions, ads for foreign work, ads for nursing qualifications, and people with friends and relatives in far flung lands. A jeepney driver I befriended during my research told me stories of driving lorries through Basra during the Iran-Iraq War. During that same trip, the son of the owner of a turo-turo in the Science City of Munoz repeatedly asked me how to find overseas work in power station engineering.

The country, as a whole, gets one thing out of this: remittances. Overseas Filipinos send back about $2 billion a year, which comes out to about 10% of the GDP. The government originally encouraged this migration to make up for foreign reserve shortages in the 1980s. Since then, the economy and education system has become aligned and dependent on this migration and remittances.

Externalities

But there are social and economic externalities and opportunity costs. My wife and sister-in-law are exactly the kind of people the Philippines should needs to retain. The country invested in them and it paid off in human capital: they’re well-rounded, dynamic problem-solvers, highly skilled, and potentially entrepreneurial. Instead, they’re examples of and the decimation of a domestic middle class.

This decimation of the middle class is a complex, non-linear economic problem. It’s not just people leaving bad economic situations. It’s also that people leaving makes the economic situation even worse, creating feedbacks for ever more exodus. It’s extremely difficult to build and sustain a middle-class economic infrastructure if most of the people who reach the middle class vanish. There are fewer people to build mid- and high-end restaurants for. There are fewer people to build that boutique shop for, to sell smartphones to (who would also demand a decrease in the import taxes on products like that), or build affordable middle class housing for.

The social and political externality is displaced hope – a hope for a better life somewhere else, rather than the hard task of staying and collectively remaking the country into something they would want to live in. They’re the people you want involved with, if not inside, the government. These are the people who get get frustrated with status quo problems and are most likely to be agents of change.

They’re the kind of people who would push for meaningful legal reform, stronger anti-corruption programs, and have no patience for the entitled offspring of families who’ve been running the country (into the ground) since America handed the country over to them more half a century ago. Each case of middle class migration amounts to a forfeiture of the countries future to those entitled families who run the economy and government. It’s one less challenge to the existing social and economic order. The Aquino and Arroyo daughters stayed, of course, while the Montellano daughters fled to neighboring countries – taking their skills, energy, and plans for a better future with them.

That hope for something better somewhere else acts as a social and political pressure valve. Instead of taking that energy for reform and change to the streets and ballot boxes, it gets directed to Ninoy Aquino International Airport. Why stay and fight when you can just leave? Especially if you can make orders of magnitude more money in the process. It’s not surprising, then, that the society James Fallows described in the mid-1980s sounds almost word-for-word like Philippine society in 2013, which he thought sounded remarkably similar to descriptions of  Philippine society at the end of the 19th century. Say what you will of the developmental problems of China, at least they’re mostly a new set of problems.

Returning to my housekeeper, on the lower-end of the human capital scale is something altogether more sad. She and 150,000 other Filipinos work six days a week, often for the entire day, to then sleep on a mat next to a washing machine. The inequity of a poor mother (which almost all of them are) leaving her family to raise a richer persons children thousands of miles away has never ceased to disturb me. While the economic externalities are less evident, one can’t deny the social externalities of single-parent households and displaced women, many who find they have no legal recourse to sexual abuse and being cheated out of already minuscule pay.

Paulo Abarcar, a Filipino economics and public policy PhD student at the University of Michigan, disagreed with my analysis. “The whole reason these folks migrate is in fact because the option to stay is much worse for the family, no?” It’s difficult to even begin situating a reply, as this is amongst the most ubiquitous but flawed lines of thinking in development. It’s replete with neoliberal assumptions – especially of Pareto efficiency in economic transactions. It’s the same logic that built the arguments in Matt Yglesias’s horrendous Slate post arguing that Bangladesh should have dangerous factories because that’s clearly what the poor want.

The short reply is that we can explain these situations as someone choosing a bad situation over an economically worse situation, but we should never use this as justification for the continuity (or expansion) of a bad situation. Nor should we so easily let economic Pareto efficiency (and/or optimality) mute out social externalities. Yes, my housekeeper is bringing in more income for her family than she otherwise would – but she’s also reducing the quality of her life and at least one aspect of the life of her children in the process. The social cost is her only coming home once a year, of being permanently isolated from friends and family.

There are also economic opportunity costs, like the abandoned farm and whatever businesses she might have started had she stayed home. As with the middle class exodus, there are likely also feedback loops with the lower classes that make domestic helper migration lead to more migration.

Policy

Policy-wise, this is a human and social capital hand-out. A poor country invests in education, only to watch the returns fly off in the wind and land in other countries. Hong Kong and Singapore landed this capital with no prior investment. Looking long-term rather than short-term, I don’t see how remittances make up for this loss of human an social capital. Especially as so many of the Filipinos I’ve met who left have no desire to return. As I wrote on Twitter, this looks more like a bleeding out than a healthy circulation of capital, people, and ideas.

How are governments and societies to handle immigration and migration then? I am only advocating a balanced approach. I think migration can be a good thing, but diaspora isn’t. It’s never a good think when people flee, in masse, from one place to another: whether it’s from the rural interior to cities, or from one country to another. Rather than encouraging this flight, we should focus attention on fixing the policies and economic situations that fuels the flight.

And governments can and should restrict the flow of immigration when it hits a crises level, becoming a genuine diaspora. One of the easiest ways to do this in the Philippines would be to enforce existing recruiter regulations and crack down on violators. One the blue collar end, domestic workers are often loaded down with debts for training and recruitment far outside the legal limit.

On the white collar side of recruitment, my wife was promised a very different work environment than the one she landed in. The recruiters lied about working hours (almost 50% more than what was in the contract), holidays (she and her Filipina coworkers worked a twelve hour shift on Christmas), and the location of the workplace (it was an hour from downtown, she was told fifteen minutes). The government does almost nothing to stop these abuses.

Cutting back on the abuse and profitability of businesses that verge on human trafficking looks a lot different from the “holding guns to heads” that Michael Clemens supposes migration restriction to look like. Policy makers and planners that wish to restrict something can, and should, start with policies that slow promotion.

 

 

 

 

 

 

 

 

2 Comments

  1. Paolo said:

    Hi Trey, I would still have to disagree with you. The very fact that domestic helpers have little economic choices available to them, as you say, is NOT justification to limit their choices even more, by restricting migration. Note: the Philippine government is not coercing these workers to migrate in the first place; these households do it out of choice, out of a careful calculation of whether this is better for their households or not. Yes, there are costs to having a family member overseas, but there are also benefits, and since families do this a lot, it would seem that they think it is on net beneficial to them. Otherwise, you would have to assume that households are intentionally making themselves worse off, or they are systematically misled, which I do not think is true at all.

    You told me to be careful of “ascribing decision-making to agency in situations of economic desperation.” But on the flip side of the coin, we should also be careful of ascribing no agency to these people, and think we know what’s best for them, when it is them who could best decide. Else, we end up calling them simply as our “exports,” as the government unfortunately often does.

    April 27, 2013
    Reply
  2. Trey said:

    I note you didn’t really address the middle class exodus. Do you agree with that part?

    Per the domestic helpers, I need to be careful with the comparison here, as it isn’t direct, but… there’s roughy one sex worker in the Philippines for every ten Filipino OFWs somewhere else. According to the ILO, only 4% say they do it because they enjoy it or think it’s easy work. The other 96% are in the business because of poverty. I bring up prostitution because it has the “ick” factor and few people think that’s a business people *should* be engaged in.

    I bring up sex work everything you wrote about would apply to that too: “there are costs to having a family member [in sex work], but there are also benefits, and since families do this a lot, it would seem that they think it is on net beneficial to them. Otherwise, you would have to assume that households are intentionally making themselves worse off, or they are systematically misled, which I do not think is true at all.”

    Note two things: in both situations, poverty is a problem that women bear more than men. Second, in both situations the women wind up socially alienated.

    When I say we should be careful “ascribing decision-making to agency in situations of economic desperation,” I mean that we can’t look at these sorts of the decisions the same way we’d analyze how a successful academic chooses which university to work at, or how you choose which bank to use, or how I choose which laptop to buy.

    They’re very different types of economic decisions because the choice architecture is so fundamentally different. When I last went computer shopping, I could afford 80% of the laptops on the market. Or gone with a desktop. Or maybe even just continued using my old laptop.

    The conversations I’ve had with my domestic helper show she really had two choices. Her husband was a miner and the local mine shut down. Barring him finding more work (unlikely, due to his age and disposition), they could either rely on a single hectare of hillside farmland for subsistence, or she could move abroad as a domestic helper. To me, that looks like 10-20% choice and 80-90% economic determinism.

    April 28, 2013
    Reply

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