Category: Research 12th September 2019
Migrant labor is a term used in the United States to refer to the laborers who travel from one place to another to find an employment, for instance, to harvest crops that need picking immediately after the crops ripen. Migrant laborers are a common phenomenon in the United States, even though it has also picked up in other countries such as Canada, Australia, European countries, and Africa. These laborers may either move on their own or under a contractor that has hired them for the job. The present business world has experienced a massive shift towards dependence on migrant labor. Migrant labor, also known as offshore outsourcing, is the practice of hiring external employees or technical staff members, who have the duty of executing certain business functions in a company, business, organization, or country. However, these employees usually come from external countries, hence the name “migrant labor.” They are laborers or workers who have migrated from their countries of origin in order to find employment opportunities that offer better working and payment conditions than their parent countries. Several factors force countries to embrace migrant labor. On the other hand, there are factors that may trigger people to prefer offering their labor services to foreign countries rather than their home countries. This form of labor has its benefits and demerits to the individual, the home country, and the foreign country that is using the immigrant to supply labor services.
Migrant labor can also be in the form of locating production centers in foreign countries that offer favorable economic conditions in relation to the domestic country. The essence behind migrant labor is using personnel that are not from the domestic country to execute services that belong to the domestic economy. Economic experts have argued for and against the act of using migrant labor in executing local production services. One of the key arguments against sending personnel to foreign countries that have high wage rates is the impact that the move has on the domestic country. Such a move is likely to reduce the domestic wage rates, employment rates, and the rate of investment. For example, in the United States, many customer service jobs and information and technology sector has suffered massively as a result of migrant labor, specifically, offshore outsourcing.
Conflict on the use of migrant labor comes from economies that pursue different ideologies. The two key ideologies are protectionism and free trade. Protectionists argue that the use of migrant labor is a potential threat to the domestic job market in the developed countries. This calls for protective measures in for these developed countries. On the other hand, the countries that receive the migrant laborers often consider this as an opportunity. Free trade advocates argue that the use of migrant labor has a high affinity of creating mutual benefit to both countries involved in the process of offshore outsourcing.
People tend to move from one country to another for employment purposes because of the difference in business and economic conditions in different countries. For instance, if the average wage rate of a country is relatively high as compared to another country, there is a high likelihood that people will move from the country with low wage rates to the one with high wage rates. This occurs because individuals always want to get remuneration that matches with their qualifications. Primarily, migrant labor is a situation where people move from one country to another in order to supply their labor to the country of destination, which happens as a result of a number of factors, which we will highlight in further stages (Report Drafting Team 2012).
Migrant labor involves many units of the economy. Individuals who move from one country to another to supply labor are the primary players in migrant labor. This is because they hold the power to decide on whether to join the labor force of the other country or to remain in their domestic country. This means that an individual must compare all factors in the two countries and come up with the decision on providing labor services to the country of destination. However, the countries involved also have a role to play in determining the use of migrant labor. For instance, there are certain countries that have policies which hinder the smooth entrance into their economy as foreign laborers. Other countries have friendly regulations to the admission of migrant laborers into their country. Thus, governance and government policies also determine the occurrence of migrant labor (Report Drafting Team 2012).
Some of the countries that provide migrant labor services include India and Mexico. These two countries have specialized in the provision of Full Spectrum services. Ukraine, on the other hand, is a specialist in the provision of Programming, research, and development services. Bolivia has specialized in providing software engineering services and information technology support services. Recently, China has also embraced the issue of migrant labor and now provides programming, data entry, and customer support services to foreign countries.
Migrant labor is a common phenomenon in industries that need technical personnel, and yet the technical personnel are not available in the domestic country of the industry. For example, if the manufacturing industry in developing countries is in its primary stages of development, there is a possibility that the developing country may not have the necessary technical staff to oversee the transition process in the industry. In such an instance, the domestic government may outsource laborers from another country that has a sufficient supply of technical individuals in the field. Thus, we can conclude that migrant labor occurs where an economy lacks specialists in a certain field and, therefore, requires outsourcing from another country that has the experience and expertise in the field. The agricultural industry has also been a key consumer of migrant labor services (Canadian Council for Refugees 2012).
Many organizations and individuals view the use of migrant labor as a form of reducing the costs of running a process or service. The primary advantages of using foreign labor include the reduction in project time durations and savings on the financial costs of labor. This is because the migrant laborers may have a highly technical capability, which has the potential of reducing the timeline of completing a project, as compared to when the organization could have used local personnel to execute the project. On the other hand, the migrant labor could be available at a relatively lower cost in comparison to the cost of similar individuals in the domestic economy. However, a number of challenges the organizations face depend on migrant labor. Such companies incur costs such as legal costs and transition cost. Thus, despite the fact that outsourcing labor from foreign countries offers companies certain benefits, the costs involved in acquiring the immigrant laborers and initiating them into the domestic system of the organization leaves several questions on the credibility and necessity of outsourcing labor. The returns on investments from projects that involve migrant laborers do not provide satisfactory evidence of the essence of using foreign labor. Businesses must conduct a detailed examination of the goals, mission, and objectives before deciding on outsourcing labor from other foreign countries. The following are some of the key factors that affect the decision of using migrant labor in organizations and businesses (Forde & MacKenzie 2009).
Most companies and businesses argue that this is the main reason why they outsource labor from foreign countries. According to these organizations, certain projects require the use of expertise that may not be available in the domestic country of location of the company. At the same time, the requirement may not be full time. Thus, it would be beneficial if the company outsourced experts from a foreign country that has a stable supply of competent personnel to meet the technical requirements of the project. There are certain countries that have excess supply of laborers in a certain field of specialization. For example, India is famous for producing highly competent medical practitioners. Many individuals have ventured in the field of medicine in India, a factor that has led to the excess supply of medical officers in the country. This excess supply of medical officers in India has led to some of the officers migrating to other countries such as the US and Britain to provide their labor services to people in these countries. Thus, it is right to say that companies embrace the use of migrant labor in the event that the domestic labor supply does not meet the technical requirement and expertise of the domestic projects and services (Johnson 2011).
Organizations that operate in highly risky industries prefer to insure the risk by delegating these programs to foreign companies that are specialized in the services. This is because the delegated organizations will execute the services with the necessary level of expertise, which minimizes chances of occurrence of unexpected happenings. Thus, the level of risk involved in an industry affects the rate and likelihood of a company outsourcing labor from foreign countries.
The risk involved in an industry within a country affects the rate at which people move from one country to another in search of jobs. For instance, a domestic market is highly risky and uncertain in terms of the market conditions, wage rate stability and other working conditions. In this case, individuals are likely to move from such a country to other countries, which provide favorable working conditions that have minimum risks and uncertainties. Workers prefer to work in an environment that has minimum risks and predictability of key elements such as wage rates. Workers will tend to move to locations that offer them stable working conditions. Most developing countries have unstable and highly volatile wage rates. This is why many people move from the developing countries to the developed economies in an effort to get remuneration that matches academic qualifications and experience (Buchori 2012).
Political stability of a nation is another factor, which affects migrant workers. Many individuals prefer to offer their labor services in countries that offer a peaceful and stable political environment. Political stability increases the level of productivity of employees or an organization, which consequently affects the economic growth of such a country. The vitality of migrant labor in the modern world has continued to increase due to the challenges that economies face.
The use of migrant labor by organizations offers organizations a number of challenges and benefits, as evident in the above illustration. Companies tend to consider all the above mentioned factors before making the decision to use or employ migrant labor force in the organization. The fact that migrant labor offers an organization or an economy a variety of options does not imply that there are no challenges that come with obstacles. For instance, integrating foreign workers in an organization may require adjustment costs. An organization must invest in training the new laborers to embrace the new culture of the designated country and the organization.
Most of the camps where the migrant workers live often have poor sanitation and hygiene. This is because the migrant workers always move in large numbers. Thus, there are chances of overcrowding in the camps, which leads to poor cleanliness levels and general maintenance of the workers.
Migrant workers who move from one country to another to provide services on agricultural farms or related industries have suffered from low wage rates. This group of migrant workers receives the lowest pay among all other categories of migrant workers. This has made these workers continue living miserable lives due to inadequate resources that can improve their living standards (Florida Department of Health 2012).
Cultural differences between the domestic and the country of destination of the migrant laborers remain a key challenge to the use of migrant workers. Companies tend to incur massive costs in training and adjustment of the new migrant laborers into the system or culture of the organization and country. Migrant laborers need to adapt to the new culture and system of the organization where they should offer their expertise and skills. Cultural differences have been the most common challenge for countries that want to outsource taskforce from foreign countries.
Countries that do not speak the same language usually have problems in using migrant labor in their economies and companies. For example, an English speaking country can have hard times in absorbing French speaking citizens into their organizations. Companies prefer to source labor force from countries that speak the same language with them in order to reduce the costs involved in training the new staff members of the home language. However, there are some countries that are specialized in the provision of the services in certain fields. In order to access such services, companies must, therefore, invest in training these foreign employees in using the language of the domestic country. For example, China and India have been on the forefront in the provision of outsourcing services. The two countries have excess supply of laborers in their fields of specializations, such as programming in China and medicine in India. These two countries are the best providers of these services to the companies in US and Britain, which are the largest outsourcing countries. They have no choice but to invest in training of these foreign employees on how to speak the domestic language. This increases efficiency of organizational operations.
Most governments have had to impose regulations and requirements that control the inflow of immigrant labor into their countries. For instance, in the Great Britain, foreign individuals must acquire work permits before they can get the permission and freedom to offer their services to the domestic country. Governments tend to enact policies that govern the inflow of immigrants into their labor force. These governments argue on the lines of protective grounds, with the main objective being to protect the local citizens from suffering from lack of employment. Countries with protective policies argue that allowing inflow of foreign laborers into the economy will increase the competition for the few job opportunities, which are available in the domestic economy. Thus, the only way of ensuring the safety and availability of jobs for local citizens is by enacting laws and regulations that control the inflow of immigrant workers into the economy. However, other countries pursue free trade policies. Such countries enhance the movement of labor force in and out of a country. This enhances the use of immigrants in the provision of labor force in key industries that need experts that can manage and execute the responsibilities and duties pertaining to the jobs (United States Department of Labor 2012).
The lack of peace and political instability in a nation can affect the degree at which foreign individuals are willing to offer their services in the nation. For instance, it is hard for individuals to accept employment opportunities in a country such as Iraq, which has been consistently experiencing war and religious clashes. This has been a common obstacle to the use of migrant labor for organizations located in such countries. In the event that these companies manage to convince the migrant workers to relocate to such areas, the companies have to incur large costs to pay for the risks that are at disposal to the workers.
The use of migrant labor has positive impacts on both the domestic country and the country of destination of the workers. Both the nation and the individuals benefit from it.
When people move from one country to another to offer labor services, the domestic country enjoys a number of benefits from this movement. First, the domestic country will benefit from inflows from the individuals that work in the foreign countries, which is an income source for the national domestic product of the country. Money from Diaspora is a large component of the national output of most of the developing countries. Local citizens who are working as migrant laborers in other countries send this money to their folks at home, which is part of the national output computations of a country.
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The domestic country also benefits from supplying migrant labor in the sense that the individuals who have moved to other foreign countries to offer labor services acquire experience and additional knowledge, which is beneficial to the domestic country. When such individuals come back to their domestic countries, they bring additional technical labor that may be suitable in steering the different upcoming sectors and industries in the domestic countries. Migrant laborers can also bring new technology and superior means of production to back to their domestic countries. Such a move is likely to help in improving the production levels of the domestic country, since most of the countries that import labor force have superior technological and production systems.
Migrant workers are often reliable because they have the experience of executing the duties assigned to them. This increases the productivity and reduces the time taken to complete certain jobs. This explains why contractors prefer to have a group of migrant workers, even if it means moving with them from one location to another.
The other benefit of using migrant laborers is the fact that the workers often have an understanding of each other. This is because they usually have a common goal, and since most of them also have a common origin, it becomes easy to understand each other, which reduces conflicts during service delivery (Doyon 2007).
The hiring country also benefits from the use of migrant labor in a number of ways. The most notable benefit, however, is access to expertise and technical skills that are scarce in the country. The use of migrant labor allows a country to acquire experts from a country that has specialists in certain fields. This increases the quality of service delivery in these organizations.
Secondly, the countries of destination also benefit from the low costs that the outsourcing countries offer their jobs. For example, countries such as India offer medical workers and other services at a favorable fee, affordable for many organizations in the United States and Britain. Thus, one can say that the countries of destination save on the costs of producing or running their programs from the use of migrant labor.
In addition, the foreign countries also have an opportunity to import technologies and production techniques from countries that offer the migrant labor services. The government can use the imported technology to restructure the internal training and the education system of the country in an effort to improve the quality of workforce of the country. Thus, the country that is using the migrants as labor force can also benefit from the technological diversity from the country of origin of the laborers.
Individuals that offer labor in foreign countries benefit in several ways. For instance, the workers have an opportunity to work in better working conditions than the ones in their home country. Such working conditions may include the high wage rates and worker compensations, high safety provisions, and many others. In addition, the individual also benefits by having access to multiple opportunities that may not have been available in the home country.
The use of migrant labor also has a number of negative impacts on the economy of both the home country and the country where the workers are offering their labor services.
The use of migrant labor by contractors denies the migrant workers opportunities to exploit other options or careers in an economy. Contractors tend to retain these workers in one position or role for a long time, which kills social mobility, which is a necessary aspect of any country that needs development.
When individuals move from a country to another to offer labor services, there is a void in the economy of this country, which comes as a result of the departure of some of the best suppliers of services in the economy. This is a common element if the main reason for the departure of workers from the country is access to better working conditions and high wages rates. The domestic economy remains without the necessary technical manpower to oversee the development process and operation of local industries.
Secondly, the domestic country also suffers from reduced wage rates due to minimum competition in the labor market. People prefer to work in other countries. This implies that there would be inadequate competition in the labor supply for the positions available in the domestic country, which is a factor that leads to poor wage rates (Ngai & Yan 2011).
Brain drain is another argument that has come out against migrant labor usage. As much as countries such as the US and Britain offer better working conditions and wage rates than other developing countries, it is difficult to neglect the essence of brain drain that such movements of labor cause to the home countries. The movement of skilled personnel from their home countries to the developed countries leaves the home countries deficient of skilled personnel, which is a requirement for the development and growth of an economy (overcomingapartheid 2012).
The country involved in hiring migrant labor also suffers from a number of challenges and implications. The most common argument of the implication of migrant labor usage is the element of increased competitiveness of jobs available in the country. Protectionists argue that allowing the use of migrant labor imposes a threat to the employability of the local citizens of the country. The reason behind this argument is that there are few job opportunities in these countries; therefore, the admission of foreign individuals to the labor force would act as a threat to local government policies. For instance, many governments have objectives of reducing the rate of unemployment among the local citizens of the country. One strategy of creating job opportunities would be to implement restrictions on the inflow of immigrants into the labor force. Thus, when organizations and companies admit foreign individuals into their labor force, in one way or another, they are frustrating the efforts of governments to reduce unemployment.
Developed countries have been on the receiving end of the migrant labor force, with most of the industries in these developed countries depending on personnel from foreign countries, to supply technical expertise. On the other hand, the developing countries have specialized in the provision of labor force to the developed countries, and the exploitation of available opportunities in developed and other developing countries. However, in recent days, governments have enacted measures, meant to control the movement of workers in and out of a country.
Governments such as the United States’ have recently enacted legislation that restricts free inflow of foreigners into the US economy to supply labor. The purpose of the policy is to spare the number of jobs available for the domestic citizens. The US government has initiated programs to create jobs and reduce the unemployment rate in the US economy. One of the strategies aimed at the realization of this macroeconomic goal is the restriction of admission of foreign workers into the system. In addition, the country has also banned the outsourcing of activities and programs to foreign companies in order to ensure an adequate supply of jobs for youth and the entire workforce of the nation (United States Department of Labor 2012).
The other policy has been the investment into research and development. The lack of expertise and technical ability has been the main reason for the importation of labor force from other countries to the United States. The government, in response to this shortage of technical personnel in some fields, has embarked upon a large-scale investment in the department of research and development. The objective of this program is to ensure that the country can raise local experts in all the key industries in the US economy. This will reduce the cost of production of products and services, since the use of migrant labor costs organizations additional resources, which includes payment for relocation, training of the employees, and the time taken by the employees to adjust to the culture and business environment of the United States. When a country invests in research and development, there will be an adequate supply of technical individuals who can meet the technical demands of the industries in the local economy (Seung & Hwan-bong 2012).
Other countries have come up with requirements that govern the employment and allocation of job opportunities by organizations. For instance, there are certain countries which require that a certain minimum percentage of workers of every organization or industry must be citizens of the country.
Developing countries have responded to the migration of labor force to developed countries in a number of ways. One significant step has been the diversification of the job opportunities through increasing the government expenditure in key industries. Government expenditure is a key determinant of the number of jobs created in an economy. In addition, monetary policies, such as the rate of interest in an economy, also determine the level of investment, which consequently affects the number of jobs available for local citizens. Thus, governments of developing countries have embarked on restructuring of their monetary and fiscal policies, aimed at improving the competitiveness of their economies. This is a way of attracting domestic workers to seek for employment in the domestic economy rather than in foreign countries (Beijl 2000).
Another action taken by developing countries is investing in technological advancements, which should increase the level of productivity of the domestic industries. Investment in research and development is the latest option that developing countries have taken in an attempt to ensure that countries can produce individuals that can meet the technical requirements of the development process.
Occasionally, the policies implemented by governments in response to the use of migrant labor in their economies have been effective. For instance, policies such as the introduction of restrictions of entry into countries for employment purposes have been effective to a certain extent. In the United States, for example, the regulation of entrance of immigrant workers in the economy has effectively managed to reduce the number of people entering the country for purposes of seeking for employment.
However, policies such as the adjustment of fiscal and monetary policies in developing countries have proved to be ineffective due to the weaknesses in the internal structures of governments in these developing countries. Aspects such as corruption have continued to frustrate the efforts by such governments to implement policies that would regulate the usage of migrant labor. A common phenomenon is the corruption involved in the recruitment processes, which discourages workers. This makes the workers prefer to look for employment in other countries that offer fair selection processes and equal employment opportunities to all job seekers in the economy (Forde & MacKenzie 2009).
The policy that requires companies and industries to have a certain minimum percentage of workers from the domestic country has also been effective to a certain extent. Organizations have often evaded this requirement by hiring employees from foreign countries on a temporary basis, which does not require documentation of such individuals as workers of the organization.
The use of migrant labor, often referred to as offshore outsourcing, has fetched contradicting views on the vitality of the activity in an economy, both in the home country and the country of destination. In reference to the challenges discussed in the above section, it would be advisable for governments to consider the following recommendations and proposals, in an effort to eradicate the negative impacts and implications of migrant labor usage. It is essential to realize that the recommendations vary according to the type of the country -whether a country pursues a protectionist or free market approach.
Migrant workers are an essential aspect for many industries. However, the attention and recognition that industries give to these individuals does not match the jobs that they do. The wages and living conditions of migrant workers in the US are pathetic. This is common for migrant workers who work on agricultural firms.
In order to reduce the outflow of skilled labor from countries to other developed countries, governments of the developing countries must invest in restructuring of government policies. The first step in doing this would be examining and researching the working conditions that lead to the movement of workers from the country to other nations. This means that one must identify the working conditions that are available in the developed countries and compare them the conditions in the home country. This comparison will help in determining the key areas that need adjustment.
Most developing countries tend to suffer from brain drain through the movement of the best and most competent workers to other countries. In the spirit of enhancing free and fair international trade, the developed countries must consider the establishment of a mutually beneficial relationship with the developing countries. For example, if teachers move from Kenya to the United States to provide their services as teachers, it would be only fair if a number of specialists in a certain field, such as IT specialists, moved from the United States to the Kenya. Such an arrangement will enhance the general benefits for the entire economy from the migration of labor within the globe.
Reduction of barriers to movement of labor force across borders would be another proposal aimed at eradicating the costs of production to organizations. When countries reduce the legal requirements for immigrants to work in a certain country, the cost of acquiring such personnel from countries that have excess supply would be affordable to upcoming companies, which will enhance global economic growth.
Governments must intervene in the plight of migrant workers. The work of migrant workers must equate to the wages and living conditions offered to them by the hiring contractors. The use of labor from foreign countries remains a controversial issue in the present economic world. Governments have failed to strike a balance between accessing superior technology and expertise from foreign countries and the need to protect domestic employment opportunities. The acquisition of labor from foreign countries reduces costs of production and enhances productivity due to the use of experts in executing job operations. However, the costs of relocating staff to other countries and threats to domestic employment have frustrated the success of migrant labor usage. In my opinion, the benefits that would accrue from the free movement of labor from one country to another exceed the negative implications of migrant labor usage. However, all countries, especially the developed countries, must ensure free and fair interchange of labor with the developing economies. This will create a mutually beneficial structure for both countries involved.