Uncertain future ahead for international labor migration

Santo Koesoebjono, Wasenaar, The Netherlands

The recent world population prospects of the United Nations state that people will have less children, live longer and become older. The drop in births is the primary cause of population aging and underlies a declining size of manpower. Rising labor shortages may mean that countries restrain their human resources from going abroad. Such a policy will desiccate international labor migration.

The aging of populations is a recent phenomenon in the history of human populations. The process is kicked off by the fall of fertility followed by the decline of mortality. The number of births is shrinking, the lengthening of the average life span results in a growing number of elderly people and they even become older. Fewer children will go to school and afterward a decreasing number will enter the labor market. This may lead to labor shortages. In the course of this century almost all countries will experience a rising number of elderly persons and a need for manpower.

The immigration of people of working age is at first glance a straightforward solution to offset labor shortages. Moreover it helps reduce the financial burden of taking care of elderly people such as the costs of pensions, health care and other social provisions. But, most young labor immigrants remain for a longer period, even till after their retirement as experienced by Western European countries.

They will age and become senior citizens themselves. Studies demonstrate that immigration can only offset population aging if persistent huge numbers of inflows take place over a longer period of time. Such a situation may cause social unrest and ethnic conflicts in the receiving country and is therefore not an absolute solution.

Developed countries experiencing declining fertility are confronted with labor shortages of various sorts. IT workers recruited in developing countries easily obtain the Green Card. Other experts are given special treatment when no nationals can be found from member or associated countries of the European Union and will earn over a certain amount per year. Work demanding low education is mostly taken by undocumented workers and bogus asylum seekers who often have less schooling.

The outflow of labor as illustrated by Indonesian workers to Singapore and Malaysia, the Middle Eastern and developed countries generates large flows of remittances profitable for the state and their families left behind. There is a general increasing trend of official registered labor migrants and remittances in the period 1983-2000. The remittances exceeded US$1 billion in 2000 and $1.48 billion in 2003/2004 according to the World Bank ($126 billion at global level in 2004).

To these official figures should be added the undocumented labor migrants and those transactions of money through informal channels. Remittances tend to grow with the rising flows of labor migrants. Huge as this amount may seem it represents less than one per cent of the gross domestic product (GDP) of Indonesia. It is to be argued whether this labor migration contributes notably to reducing unemployment.

At the same time these remittances are a valuable source of income for households of origin. Remittances can significantly increase household savings and facilitate the purchase of goods. This contributes to improving the living standard of families and the education of children, although in general only a small part is invested in income-employment generating activities.

As time passes, developing countries will improve their economic development. These countries will attract companies that are outsourcing their activities such as call centers and IT services moving from Western European countries to India. The currently developing countries will need highly qualified people.

Governments may restrain these precious human resources from going abroad. The crux of the matter is whether the future holds hope for people who prefer to stay at home instead of going abroad to earn a living. Researches show that the great majority of people do not migrate (less than 3 percent of the world population lives outside their country of origin) and that a dynamic social and economic situation will put a brake on migration.

Besides, Asian workers are staying in general for a limited period of time abroad till they obtain their targeted savings. As a domestic worker in Jakarta said, if factories are set up nearby Yogyakarta, Central Java, people will not move away to find a job in places like the densely populated capital city of Jakarta and others will return to work near their village as my daughter did. Right she is.

Countries experiencing labor shortages should make great efforts to treasure their manpower. Anticipating the advent of a declining number of births and economic progress developing countries should seriously consider investing in the education and training of their people to upgrade their skills. It takes time to reap the fruits of such investments.

The rising valuation of labor and better prospects would reduce the drive of people to offer their services abroad. If then international labor migration still proceeds, it will be based on equal terms between countries, not by mere luring away specific qualified manpower and cheap labor for dirty and dangerous jobs.

International competition in the workforce would be tougher. The view that international labor migration is instrumental to offset the consequences of population aging and manpower shortages would be less evident.

The writer is a lecturer at the UNESCO/IHE Institute for Water Education, Netherlands.