India reproduces, US seduces

A survey by Gallup widely reported in India found that 100 million from the world’s populous countries would like to migrate to the US permanently. Of these, 19 million are Chinese, 13 million from Nigeria and 10 million from India. One would think most want to move because of jobs and the prospect of a better life than the ones they endure at home; most would be right. If one is not picky and most immigrants are not, the US does have jobs for the immigrant, legal or illegal.

Migration and opportunity

In fact, the economy depends a lot on migrant labour, and that is the disconnect and a point of discord between the American policymaker and those who drive the economy; what the Obama administration wants is not what the economy needs or thinks it needs. America wants cheap labour, low unskilled labour even though it may be in the IT sector. Companies such as Google, Microsoft and some others that employ highly educated Indians and Chinese may lend credence to the notion that America is in need of highly productive and talented labour; it may, but the critical issue is that it should be cheap in the bargain and no one comes cheaper than the immigrant.

What the American economy really pays well for is the innovative skills of a tiny minority that drives technological change in leading firms such as Corning, Google or Microsoft in leading universities and labs and on Wall Street firms that employ Math and Physics graduates — from Russia or China — to constantly come up with profitable and arcane financial products.

Skills? What skills?

But once the innovation passes the commercial litmus test, its mass production really depends on a labour force whose job requirement is as routine as a bank clerk’s. And this is where immigrant labour comes in, fired by zeal to improve a life, constantly compared and judged by the yardstick of what has been left behind at home.

And the American entrepreneur knows that and endorses a favourable migration policy; in the process the work “ethic” of the immigrant eager to please the host country so as to stay on produces a mythology that works to the detriment of local “native” labour; those same codes by which America produced its early foundational wealth — hard work, a rugged individualism, ambition, commitment to family — now apply with equal force to the immigrant.

A New-Age Profile

The Migration Policy Institute (MPI), a Washington DC-based think tank, did a study in 2011 on Indian Immigrants in the US. The data it provides offer a revealing profile of India’s contribution to the American economy.

The study also reveals how much of that demographic dividend policymakers and middle-class urban Indians feel so proud of is slipping away to the US.

In 2008, America had around 1.6 million India-born migrants most concentrated in California and New Jersey, New York and Texas; regions of high employment, growth and the IT healthcare industries and Ivy League colleges.

The MPI tells us: “Relative to other groups, the Indian-born population in the United States grew rapidly during the 1990s and 2000s, increasing by 1.2 million — or about 65.000 per year — since 1990.” So significant was this influx that in 2007-08, “the Indian foreign-born population surpassed the Chinese and Hong Kong population” to become the third largest group after those from Mexico and the Philippines.

Of those who came into the US in the 1990s and 2000s (1990-2008 to be precise) three-quarters were armed with at least a bachelor’s degree. Over a quarter of employed Indians work in the IT sector. One-third worked in management business finance and information technology. The MPI found that “Indians were less likely to live in poverty than natives.”

That may well be true; it may explain why so few come back. But it doesn’t rule out uncertainty. The American economy welcomes immigrants because they come cheaper than home-grown workers — this applies at all levels of the work place.

cheap and virtuous

But the bottom line too is important. While a great deal of emphasis is placed on “productivity”, equal stress is laid on making sure that the firm’s liabilities are as few as possible. Outsourcing and contractual terms flourish in an economy dedicated to lowering costs and increasing profits and shareholder value.

Almost all backroom IT-related services are outsourced to third-party agencies or consultants who hire out, on hourly wages, skilled personnel, very often from India.

Outsourcing of labour services is big in America; the Democrats oppose “off-shoring”, the export of jobs to China, for instance, of which the late Steve Jobs was an ardent exponent even as Apple products were being peddled as icons of American enterprise. It is only the more perceptive who denounce outsourcing, too; Barack Obama did during his race against Mitt Romney but dropped it because of its lack of appeal; technically, jobs are in America though many go to those migrants who work far more for far less than the native Americans.

Work yes, strike, no

Nothing shows up the ironies of American business’ love for migrant workers than the strike at a frozen pizza factory last August for better wages and working conditions and the right to unionise.

The management responded by asking more than a third of the workers, some 89 immigrants, to provide proof of their legal status in the country, threatening, in effect, to sack them!

Now the Gallup Poll tells us that 10 million more Indians would like to make the US their home. If wishes were airplanes, those future immigrants could help America’s demographic nightmare, an ageing population, become a dream. Ten million Indians, 13 million Chinese, willing to soak in the mythology of hard work at less pay would turn America into a competitive labour market.

India’s demographic shifts could become America’s dividend.

COMMENT NOW