(Statistics Canada actually estimates this stuff)
(Who says the Government isn’t good for anything?)
(Pew Research estimates $150B left U.S. in 2017)
(UN encourages remittances for economic development)
1. Important Links
CLICK HERE, for StatsCan data on remittances.
CLICK HERE, for advice from the Government of Canada on how to send your money out of the country. No, not joking.
CLICK HERE, for some estimates by Pew Research, 2019.
CLICK HERE, for the UN encouraging remittances in 2012, while noting the “brain drain” economic immigration causes.
CLICK HERE, for a 2014 article from Toronto Star.
CLICK HERE, for a Vancouver Sun Article, $24B in 2012.
CLICK HERE, for CNBC arguing U.S. needs immigration to prevent “brain drain” in Silicon Valley, CA.
CLICK HERE, for ACORN wanting lower fees.
2. Context For The Article
Why should we care? Aren’t people working for their money, and isn’t it theirs to keep? And aside from fake refugees and welfare cases, this is a valid point.
However, it stands the argument for economic immigration on its head. How so? We are told repeatedly that we need increasing levels of economic immigration every year. GDP will rise, and their will be more economic activity. That money will then keep circulating through our society, creating even more wealth and jobs.
However, remittances do the opposite. This is sending money OUTSIDE of the country, typically to family members. That money is then used to stimulate OTHER economies. True, this is not the worker’s entire wage, but often amounts to a substantial portion of it.
If we had hired Canadian workers instead (or citizens of whatever host country), then this would not a nearly as much of a problem. That spending would still happen, but the money would stay here.
And while individuals and their families may benefit from economic immigration, what happens to the communities they leave behind? If all their talent is scooped up, how do those countries benefit? Instead of improving things themselves, all that is left is aid.
3. The American Situation: $150B in 2017
Pew Research, among many other things, tracks and estimates remittances sent back. The numbers are staggering, particularly in the U.S. An estimated $150 billion was sent outside the country in the year 2017.
Just think. All that money could have funded Donald Trump’s border wall. In fact, it would fund it several times over. Let’s take a look
|Rank||Nation||Est. ($ Billions)|
This table only covers the top destinations for the remittances out of the U.S., but the point should be obvious. It doesn’t really stimulate the “American” economy when so much money is being sent overseas. It disproves (to a large degree) that there is any real economic benefit to this immigration system.
Also worth noting is that large amounts of foreign “temporary” labour has the added effect of driving down wages, as more people will be competing for the same job. This creates an employer’s market. And as we all know, these aren’t really “temporary” workers. Most will try to stay.
True, this focuses on the U.S. situation, but it’s worth covering, as Canada faces the same issues that our Southern neighbours do.
4. Toronto Star Article On Topic
It’s nice to see Toronto Star, of all newspapers, covering this issue. Enormous sums of money are sent out of the country annually. This money is used to support relatives, and it also has the effect of stimulating economics elsewhere (basically everywhere except the host country).
What stops the article from being great, however, it the platitudes towards diversity and multiculturalism near the end. Still, it is an interesting read.
5. Vancouver Sun Article On Remittances
Another interesting article on the subject of remittances came from the Vancouver Sun. It echoed the World Bank’s estimate of $24 billion leaving Canada in 2012, but covered other relevant points as well.
Some valid points here. This is a form of socialism, as one or a few people will be working and then sharing it with the entire family, and possibly extended family. It can be difficult for many to control their spending when it was earned by someone else. As well, who is to say the money is even going to the people who it is earmarked for?
Also, the morbid issue of inheritance is touched on. Is the person feeling pressured to remit money to ensure they aren’t left out of their parent’s or grandparent’s will?
Yes, it may seem relatively small, but it is exporting a portion of the overall wealth and being used to finance activity elsewhere. This isn’t what the public is told when we hear “economic migration”.
Spot on. It is a form of foreign aid.
Furthermore, it is a brain drain. While the developed country (arguably) receives some benefit from the immigration, what about the nations that are left behind? When their talent and skilled labour leaves for better opportunities, who picks up the slack?
6. U.N. And Resulting Brain Drain
The U.N. fully and freely admits that the money sent back as remittances is used to stimulate other economies. However, it has an interesting critique as to a downside of economic migration: brain drain.
This is surprising to see the U.N. of all places write this critique. To be fair, it was 2012. It’s true though. Creating economic incentives to leave a developing nation results in having their talent “poached” by wealthier nations. This leads to them falling even further behind.
Does it help a nation when most with medical or scientific training leave for better opportunities? On a societal level, no. It means less educated and qualified people needed there, and it’s the people who have contributed to that education in the form of taxes.
What is going on here? The Toronto Star, and now U.N. say things that are perfectly reasonable. That same U.N. now advocates for mass migration as a human right, and an entitlement to have social services provided for. Interesting how philosophies change. Don’t worry. I haven’t gone soft of the U.N. But valid arguments are to be commended, regardless of who they come from.
7. Economic Migration As Argument To Prevent Brain Drain In Developed World
This CNBC article argued some of the same points, but came to a different conclusion: continued immigration is necessary to prevent a brain drain from developed countries such as the U.S.
There is a huge backlog in Canada as well, but that is to hide the full scale of mass migration going on. Perhaps the U.S. is in the same dilemma.
True, and that outlines a huge problem: getting permanent resident status in Canada is far too easy, and far too quick. We hand it out to people who are still strangers, and whose interest here is at best unclear.
Of course there is no mention of the countless U.S. citizens who are college educated, but struggle to find meaningful work. No mention in the glut of graduates or young people who vastly outnumber the available positions for them. Citizens should come first. There was a time when they did.
Are there not plenty of Americans who could fill those American jobs? Are there not plenty of Canadians who could fill those Canadian jobs? There are, but having a surplus of labour allows wages to be pushed down. It becomes an employer’s market.
8. Statistics Canada And Remittance Estimates
Even StatsCancan taken quite an interest in the remittance issue. It fully admits that it’s a huge industry, and will not slow down soon — if ever. StatsCan tries to get a grasp on the scale of it. Here is a 2018 posting from the Canadian Government.
In fairness to StatsCan, this is probably a huge underestimate. People aren’t likely to declare anywhere near the full amount if they are worried about taxes, fees, or government clampdown.
Interesting. So by sending this money back, is it in fact helping to finance the next wave of students and “temporary” workers?
Nice to hear it being said so bluntly. The remittances are propping up many economies.
Yes, ignore the issue of money leaving the host countries in huge amounts. Let’s just make it cheaper to do so.
9. Thoughts On The Issue
Both Canada and the U.S. are discussed in this article as they face the same issues here. And there are interesting facts about both.
While the World Bank estimate is a starting point, it could be easily far less than the reality. The $24B estimate was from 2012. The Toronto Star and Vancouver Sun articles came in 2014. But it’s now 2019. Assuming that estimate was remotely accurate, how much is it now? $25 billion? $30 billion? $40 billion? This is money that is taken out of Canada, and the U.S. situation is much worse.
It is entirely correct to point out that remittances are a form of foreign aid and they are used to prop up national economies. It’s also fair to wonder where exactly the money goes afterwards, and if families are really the ones benefitting.
The point was raised that economic immigration causes a sort of brain-drain. This is true, as we are giving financial incentives for the most accomplished to leave their homelands instead of helping to improve them. We take only the best (theoretically), when their presence is really needed at home. Nations should be putting their own people to work — meaningful work — before importing foreign labour.
Of course this doesn’t even account for the vast cultural differences and tensions that are created by mass migration to other nations. But that topic has been covered elsewhere.
While remittances do make an argument in favour of economic immigration (helping out families), they also make some compelling arguments against it. Immigration should be about more than just money.