In the global economy’s current state of financial crisis, the three economically and culturally divisive aspects of migration discussed above will likely be intensified by drastically changing labor market conditions. According to a 2009 report by the Migration Policy Institute, declining GDP in most developed countries has already led to a decreased demand for labor, with migrants bearing the brunt of job loss in areas such as construction, manufacturing, and services (Fix et al, 2009).
With trade and foreign direct investmentThis category refers to international investment in which the investor obtains a lasting interest in an enterprise in another country. Most concretely, it may take the form of buying or constructing a factory in a foreign country or adding improvements to such a facility, in the form of property, plants or equipment. (FDIThis category refers to international investment in which the investor obtains a lasting interest in an enterprise in another country. Most concretely, it may take the form of buying or constructing a factory in a foreign country or adding improvements to such a facility, in the form of property, plants or equipment.) severely faltering in the year following the financial crisis of 2008, many migrants in the export sector lost their jobs and were forced to return home, while many potential migrants from developing countries have been deterred from making the trip across borders. Although it is still too early to gauge the true impact of the crisis thus far, many economists believe that this turnaround in migration flows is potentially the biggest since the Great Depression (Fix et al, 2009).
In China, internal, cyclical migration from rural areas to industrialized coastal regions is a widespread phenomenon; workers spend much of the year living away from home and instead in eastern provinces where they can find manufacturing work and return home briefly to celebrate the Chinese New Year with their families. In the year after the recession, however, approximately 12 million of these migrant workers were unemployed and remained in their home provinces after their yearly vacation, rather than returning to the coastal area (Fix et al, 2009).
Similarly, in the year following the economic crisis migration from Mexico to the U.S. declined notably, from 1 million immigrants annually during 2006 to just 600,000 in 2009. Much of this decrease was due to lower numbers of undocumented immigrants, while legal immigration streams remained relatively fixed. Significantly, the number of Mexican immigrants who returned to Mexico during the same period continued to be quite low, despite the high unemployment rates for Mexican immigrants during this time (Fix et al, 2009). While Mexican migration to the U.S. has not yet reached pre-recession levels, the first half of 2012 saw cautious increases in migration flows compared to the previous three years (Mexican Migration Monitor 2012).
In many countries, the volatile global economy has already exacerbated domestic pressures for government restrictions on immigration. In Russia, for example, Prime Minister Vladimir Putin enacted a policy intending to reduce the level of foreign workers in the country, while at the same time encouraging a youth branch of his Unified Russia party to engage in a campaign to “reclaim jobs for Russians that are occupied by foreign migrant workers”(Migration, Globalisation and Poverty, 2009; Synovitz, 2008).
In Australia, where violence against foreigners, primarily Indian immigrants, surged after 2009, the government reduced its intake of migrants to mitigate the effects that the financial crisis is expected to have on ethnic relations in an increasingly competitive job market (Bartlett 2010), Countries like Japan and Spain have tried an alternative approach to lessening the political and financial burden of immigrants by offering them cash incentives to return home.
In Europe migration trends between Europe, South America, and Africa reversed during the Economic Crisis. In search of work, young Portuguese are migrating to Brazil, Mozambique, and Angola, while young Spaniards are heading to Argentina, Chile and Uruguay. French, Italian and Spanish immigrants are heading to Brazil as well. In 2008 and 2009, more than 100,000 Europeans, including those with dual nationality left Europe to live in South America or the Caribbean (The Portugal News Online, 2012).
With some migrants losing their jobs and returning home, the financial crisis thus may have an indirect effect on economies in developing countries through its impact on migration remittances. As explained above, many countries, such as Mexico and Tajikistan, rely heavily on money sent home from compatriots working abroad to increase their domestic GDP and spur on economic development. As the global economic slowdown forces many of these remittance-sending migrants out of a job, it is the families and communities who rely on these payments as a major source of income who suffer as well (Fix et al, 2009).
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