Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Stocks Correct into Bitcoin Happy Thanks Halving - Earnings Season Buying Opps - 4th July 24
24 Hours Until Clown Rishi Sunak is Booted Out of Number 10 - UIK General Election 2024 - 4th July 24
Clown Rishi Delivers Tory Election Bloodbath, Labour 400+ Seat Landslide - 1st July 24
Bitcoin Happy Thanks Halving - Crypto's Exist Strategy - 30th June 24
Is a China-Taiwan Conflict Likely? Watch the Region's Stock Market Indexes - 30th June 24
Gold Mining Stocks Record Quarter - 30th June 24
Could Low PCE Inflation Take Gold to the Moon? - 30th June 24
UK General Election 2024 Result Forecast - 26th June 24
AI Stocks Portfolio Accumulate and Distribute - 26th June 24
Gold Stocks Reloading - 26th June 24
Gold Price Completely Unsurprising Reversal and Next Steps - 26th June 24
Inflation – How It Started And Where We Are Now - 26th June 24
Can Stock Market Bad Breadth Be Good? - 26th June 24
How to Capitalise on the Robots - 20th June 24
Bitcoin, Gold, and Copper Paint a Coherent Picture - 20th June 24
Why a Dow Stock Market Peak Will Boost Silver - 20th June 24
QI Group: Leading With Integrity and Impactful Initiatives - 20th June 24
Tesla Robo Taxis are Coming THIS YEAR! - 16th June 24
Will NVDA Crash the Market? - 16th June 24
Inflation Is Dead! Or Is It? - 16th June 24
Investors Are Forever Blowing Bubbles - 16th June 24
Stock Market Investor Sentiment - 8th June 24
S&P 494 Stocks Then & Now - 8th June 24
As Stocks Bears Begin To Hibernate, It's Now Time To Worry About A Bear Market - 8th June 24
Gold, Silver and Crypto | How Charts Look Before US Dollar Meltdown - 8th June 24
Gold & Silver Get Slammed on Positive Economic Reports - 8th June 24
Gold Summer Doldrums - 8th June 24
S&P USD Correction - 7th June 24
Israel's Smoke and Mirrors Fake War on Gaza - 7th June 24
US Banking Crisis 2024 That No One Is Paying Attention To - 7th June 24
The Fed Leads and the Market Follows? It's a Big Fat MYTH - 7th June 24
How Much Gold Is There In the World? - 7th June 24
Is There a Financial Crisis Bubbling Under the Surface? - 7th June 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Governments Give Migrants a Disastrous Mix of Social Welfare and Bureaucracy

Politics / Immigration Sep 15, 2015 - 07:41 PM GMT



Justin Murray writes: On August 27, 2015, seventy-one refugees were discovered suffocated in an abandoned, locked transport truck in Austria just across the border with Hungary. These individuals, reported as refugees fleeing from the civil war in Syria, made a trek of over 1,000 miles. This is just a long string in the growing refugee and migration crisis hitting Europe over the past few years, with 2,500 estimated deaths from capsizing ships in the Mediterranean alone, of the nearly half million people crossing into Europe over the course of 2014–2015.

The problem is not unique to Europe. Many of these same migrants find their way to Brazil then die through the various jungle crossings attempting to reach the United States. This was true for five migrants from Ghana, an African nation, found dead in the jungles along the Panama-Colombia border This is a terrible loss of life and while most agree that “something” must be done, we have to question first what the underlying cause of this migration is and what that “something” should be.

Underlying Cause of the Migration

Much has already been written by the degree of instability caused by foreign war policy and the distorting effects of foreign aid that usually props up corrupt military dictatorships. The more interesting observation of the latest migration crisis is not that it is happening, but where the migrants are headed.

In the past, refugees usually trekked the minimal distance necessary to escape fighting with a few politically popular groups receiving airfare to further distant nations, like the Somali refugees relocated to Minneapolis, Minnesota. The rest find their way to the closest safety zone away from the fighting. However, this latest wave of refugees and migrants are passing through numerous safe nations, purchasing airfare across oceans and braving a travel path that is far more dangerous than remaining at home. For example, the aforementioned seventy-one Syrians found dead in Austria chose to bypass and ignore nearly a dozen other safe countries and make their way into Austria and, presumably, further on. It is odd that a Nepalese refugee will purchase airfare to Sao Palo, Brazil then travel by roads through the Amazon jungle and cross the US-Mexico border if it was just war or natural disaster that they were fleeing.

Public Benefits Create the Incentives

A major driver creating the incentives to make this dangerous, life threatening journey can be summed up with a single photo:

Above is a photo of a reference card created by human smugglers obtained by Frontex, the European Union’s border control agency. Smugglers throughout the Middle East, Turkey, and North Africa produce such cards and hand them to potential clients. In effect, refugees have ceased seeking the nearest safest refuge and are now shopping the best nations to flee to. This has created the issue that people are no longer fleeing from conflict or poverty, but fleeing toward the most lucrative benefit package. The above cards do warp the legal systems by implying that showing up is sufficient cause for asylum and the benefits are permanent and for life. However, the presence of such benefit packages does exist and is a major incentive for migrants. This explains why people fleeing Libya are crossing the Mediterranean in rickety, overcrowded boats and people are passing through four or five perfectly secure nations to reach the EU. Part of this large humanitarian crisis is generated by dangling the incentives that anyone who arrives will be given a host of benefits that are, relatively speaking to the recipient, opulent.

The United States provides similar resettlement benefits and even includes the possibility of full family unification. With the United States, further issues exasperate with the treatment of Unaccompanied Minors, who are advertised as given an almost full ride by showing up. This accounts for the surge of fifteen-to-eighteen-year-old males crossing the US border under dangerous conditions.

Lots of Government Paperwork

Another driver of this behavior is how states handle migration and border control. Legitimately crossing into the nations of the EU and North America is a bureaucratic nightmare. Migrants following the rules have to obtain identity documents that are not readily available in their home nations. For example, with the United States, the petition time tends to be lengthy, requires travel to inconvenient USCIS locations in the home nation and is limited to people who have existing families or job offers because of qualified skills. If one looks at the Green Card FAQ there is little recourse for a low-skilled worker seeking a better life apart from a narrow and difficult asylum process. The entry process into the EU is similarly difficult.

I can speak from personal experience traveling to Switzerland for my MBA that even as a US Citizen seeking a one year visa in the Schengen area is a complex, difficult task. It is hard to even comprehend what someone from Syria or Ghana has to go through to obtain legitimate entry. Even the $1,010 application fee, which provides no guarantee of acceptance, while not unreasonable by Western wealth standards, represents multiple years of earnings for some migrants. Even with legitimate refugees, the process is difficult and, with existing quotas, it would take nearly a decade to process just those displaced by the Syrian conflict.

By making legitimate entry points all but inaccessible to most desirable migrants, the migrants are funneled through non-standard routes such as the dangerous Panama-Colombia crossing or under razor-wire fences at the Hungarian border or associate with criminal cartels that will just as readily enslave, rob, or murder the migrants as assist them across borders. These routes are selected over safe alternatives because the safe alternatives have been made unavailable by government policy.

The Perfect Storm

Either of the above policies creates problems, but together, we get the perfect storm. By dangling a rich benefits package in front of potential refugees and migrants, governments are creating incentives for individuals to make the journey. But by making those said benefits impossible without running a dangerous gauntlet, we end up driving more people through quite literal meat grinders. This combination is almost cruel in a sense — great benefits, but near impossible to get to them.

The Solution

The key solution to this problem is two-pronged. First, guaranteed public welfare subsidies for refugees needs to be curtailed or outright eliminated. By removing the incentives, people enticed to migrate for public benefits will disappear, greatly reducing the apparent reward for undertaking the trip. The cost of the dangerous trip remains, but the reward has just vanished. Those who are truly desperate will no longer have the incentives to travel beyond the nearest safe location.

Second, the Byzantine, lengthy and costly system of legal migration needs to be scrapped. This is not entering the debate on open borders, but whether one supports open borders or not, it is difficult to argue that the current system of migration is costly and difficult for all but the best educated and most well connected. Those who seek to migrate and contribute to the host society are by and large cut off from legal avenues, leaving only the very dangerous routes available.

While influential voices like the Pope are correct that this is a travesty, the policies promoted by him and other government officials will only make this worse. Offering assistance to migrants by rescuing them when they become troubled or allowing migrants to remain without changing the underlying bureaucratic issue will only create greater incentives for more and more people to take the same dangerous routes. Risk compensation has to be considered — the greater the safety mechanisms in place, the more risky the behavior will become. Unfortunately, the current solutions presented by officials will likely result in boats even more overloaded with people and even greater numbers traversing dangerous jungle passes.

By Justin Murray

Justin Murray received his MBA in 2014 from the University of St. Gallen in Switzerland

© 2015 Copyright Justin Murray - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

© 2005-2022 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in