Perspectives on immigration and long-term economic and political forecasts from the Azores, Madeira, and the Canary Islands

Some perspectives from reading the guidebooks and listening to tour guides in Portugal, the Azores, Madeira, and the Canary Islands…

Low-skilled immigration makes a country poorer according to the Lonely Planet Portugal guidebook, otherwise filled with politically correct sentiments:

In 1974 and 1975 there was a massive influx of refugees from the former African colonies, changing the demographic of the city and culturally, if not financially, adding to its richness.

The fewer immigrants the better according to Lonely Planet Canary Islands:

Migration from Africa has also stabilized with just 288 migrants arriving here in 2014, compared to a staggering 32,000 in 2006 when some days several hundred Africans would reach the islands in their rickety wooden boats.

Guides in the Canaries told us that, in addition to using military force to resist immigration from Africa, they use police and regulations to resist immigrants from other parts of the EU. To stay in the Canaries one must have either a W-2 job or prove to authorities that one has sufficient savings and income to sustain oneself without collecting welfare.

The accepted narrative in guidebooks and among locals is that population growth historically led to unemployment and poverty for which the only relief was emigration. This is where the “tough to make predictions about the future” angle of the title comes in. During the last 120 years or so, the countries that seemed the most promising destinations for ambitious young Atlantic islanders: Cuba, South Africa, Venezuela. (A lot of folks ended up bouncing back, sometimes a couple of generations after emigrating.)

Separately, for those who didn’t emigrate you might ask what life is like. On the Azores the answer is “awesome.” The islands have fantastic roads, considering the mountainous terrain, which are never crowded. “All of these roads and tunnels were funded by the EU starting in the 1990s,” explained our guide. Every small town has a festival at least once per year and residents will party until sunrise. “There are a lot of little towns here,” explained our guide, “so we’re usually at a festival about once every week.” This prompted a Swiss tourist to mutter “When do these people work?” Locals stress the safety and security of their lives on the islands, the good schools for their children, and the strong connections to family and neighbors. The economy of the Azores is built on agriculture and some islands are just covered in dairy farms. The farther south you go to Madeira and the Canary Islands the more it feels like an artificial tourist outpost, but the locals express some of the same sentiments as do those in the Azores. One thing these folks love is transportation. Towns are clustered around harbors and airports are built absolutely as close to a town as possible. Nobody complains about overflight noise of inter-island turboprops or jets from the mainland.

17 Comments

  1. Jackie

    October 6, 2017 @ 2:31 pm

    1

    The EU spread a lot of road building money all over southern Europe. I think it was a win-win for the Germans (or at least for the big German corporations) – a way to stimulate the southern economies so that they would have money to buy more Mercedes and VWs and then when the road were done people would drive even more because now there were road to drive on. Imports would get hauled around on the new roads in German trucks. German engineering and construction companies, heavy equipment manufacturers, etc. – they all loved it.

  2. the other Donald

    October 6, 2017 @ 3:43 pm

    2

    It”s amazing how far the money goes if you don’t spend it on F-35’s and aircraft carriers. The American version is “invade a Southern country so it can use more war stuff”‘. Boeing and Lockheed Martin are still loving it.

  3. Neal

    October 6, 2017 @ 4:51 pm

    3

    >otherwise filled with politically correct sentiments

    This seems to imply that the analysis in these guidebooks is somehow relevant to the current political discussion around refugees in the US. It’s hard to see how that could be:

    – “massive influx” of refugees vs. the tiny trickle into the US (immigration is much more significant, of course, but still amounts to less than 15% of the population spread over 50 years).

    – tiny, isolated, agricultural economy vs. massive, integrated, highly diverse economy,

    – low per capita GDP vs. high per capita GDP

    After our discussion of “How can a family that can’t afford to pay market prices for housing possibly provide a net boost to the U.S. economy?” in the “Why isn’t our government running a shuttle service to get people out of Puerto Rico?” thread, I happened to walk by my neighbor’s house as three workers were finishing a new brick facade around the porch. I didn’t speak to them, but they were probably immigrants (not refugees) from Mexico. I don’t know what they were being paid, but it probably put them into the income bracket we were discussing in that thread. I realized that it wasn’t just their employer who was capturing the value added by their labor. My neighbor will enjoy that facade for decades (with cooperation from the San Andreas), and it even contributes (a tiny bit) to the value of other homes in the neighborhood including mine. I find it very hard to believe that those three don’t provide a “net boost” to the economy, even if they do collect more in government benefits than they pay in taxes, especially since they probably do pay market prices for housing and most of any benefits they collect would be for healthcare (which we agree should be universally available) and education for their children (which could be considered an investment by society).

  4. Anonymous

    October 6, 2017 @ 5:13 pm

    4

    Neal,
    Labor costs are small proportion of house construction and renovation costs, in my area locals work in constrauction and renovation making $25 – $45/hour and house construction and repairs are much cheaper then for my shore-dwelling friends who employ MS13 members for such tasks.

  5. philg

    October 6, 2017 @ 5:22 pm

    5

    Neal: I think you’ve laid out a plan for the U.S. to become much wealthier. We bring in 1 billion workers with no skills. They get paid minimum wage and pay market price for housing (maybe 10 or 15 people can share a 2BR so that it is affordable). They rip out ugly invasives and plant repeat blooming Endless Summer hydrangeas, which everyone loves and can enjoy for decades to come. They and their children get free health care in the world’s most inefficient system. Their children get free education in a below-average-for-the-OECD (as measured by the PISA test) educational system.

  6. Neal

    October 6, 2017 @ 5:41 pm

    6

    @philg: That is your plan, not my plan. I don’t think it will work.

  7. Karen J

    October 6, 2017 @ 6:44 pm

    7

    Always surprised by the liberal focus on the supposed economic benefits of bringing in immigrants. Shouldn’t we be accepting immigrants because it’s the moral, humane thing to do, particularly when the alternative to accepting and integrating immigrants is that they die in horrific ways (shipwrecks in the Mediterranean, mass killings by cartels in South America).

    I remember reading a NYT series on a Canadian family that took in a family of Syrian refugees. After a year of attempting to integrate the Syrian family into the Canadian way of life, the Canadian sponsors expressed shock that, upon the end of the sponsorship, the Syrian father promptly withdrew several thousand dollars from his bank account to become eligible for the Canadian welfare system. But what other outcome could they have expected? That a 40 year old Syrian ex-farmer and patriarch, traumatized by war, with a third grade education and no English skills, could reinvent himself in a year as a middle class Canadian office worker?

    I actually think American and European liberals might have more luck persuading conservatives to accept immigrants if they were honest about the fact that many immigrants probably will be a (white man’s?) burden, at least for the first generation. But we have to accept them because the alternative (letting immigrants, particularly immigrant children, simply die at our front door) is just too horrific and inhumane.

    Those with a more cynical view of the situation might see a kind of grim justice to the current waves of immigration stressing European welfare systems. Just as colonial Europeans exploited the peoples of Africa and Asia several generations ago, so too do current waves of immigrants from Africa and Asia exploit the wealthy European countries and their systems.

  8. Neal

    October 6, 2017 @ 6:52 pm

    8

    Karen J: You make good points, but I think they apply to one particular type of immigrant (refugees) not necessarily immigrants in general.

  9. philg

    October 6, 2017 @ 11:52 pm

    9

    Karen: Thanks for the perspective, but wouldn’t someone whose main passion was helping refugees use the funds available to make the refugees comfortable in a country with a lower cost of living? Instead of providing one family with a house, health care, food, etc. in New York City, for example, we could probably do that for 10 families in a (just as safe if not safer) place where these items are less expensive.

  10. Tom

    October 7, 2017 @ 3:33 am

    10

    “Shouldn’t we be accepting immigrants because it’s the moral, humane thing to do, particularly when the alternative to accepting and integrating immigrants is that they die in horrific ways (shipwrecks in the Mediterranean …)”

    Give me free room and board and money and license to steal, rape and murder for life for me and all my relatives … or I drown this baby.

  11. philg

    October 7, 2017 @ 9:41 am

    11

    Neal: If three low-wage immigrants building an attractive facade make the country somewhat richer, why don’t 1 billion low-wage immigrants doing attractive landscaping make the country way richer? If we want to maximize the per-capita standard of living for existing U.S. residents, what is the optimum number of low-wage immigrants that you say will provide a “net boost” to the economy? What is the mechanism by which accepting immigrants beyond this number ends up making current U.S. residents worse off?

  12. Neal

    October 7, 2017 @ 11:42 am

    12

    >If three low-wage immigrants building
    >an attractive facade make the country
    >somewhat richer, why don’t 1 billion
    >low-wage immigrants doing attractive
    >landscaping make the country way
    >richer? What is the mechanism by
    >which accepting immigrants beyond
    >this number ends up making current
    >U.S. residents worse off?

    This begs the question that if we “accept” 1 billion low-wage immigrants they will come. Setting that aside for a moment, the answer to the question is that there isn’t sufficient demand for attractive landscaping to absorb 1 billion low-wage immigrants doing that work. Once the supply of labor significantly exceeds the demand you enter a different regime and the economics changes.

    Circling back to the “will they come?” question, there is strong evidence that immigration is moderated by labor demand and they would not come. It isn’t apparent with legal immigration because the system is too inflexible and acts as a choke point buffering the supply of legal immigrants, but illegal immigration waxes and wanes with US labor demand.

    >If we want to maximize the
    >per-capita standard of living
    >for existing U.S. residents, what
    >is the optimum number of
    >low-wage immigrants that you
    >say will provide a “net boost”
    >to the economy?

    This is exactly the kind of question which I would expect someone who “believes” in markets would want to answer using the most market oriented approach possible.

  13. philg

    October 7, 2017 @ 12:57 pm

    13

    Neal: Why aren’t people in Singapore smart enough to figure out that they can easily become wealthier? They have a much higher labor force participation rate than the U.S. and also a much lower unemployment rate. Thus their labor supply is much tighter than here in the U.S. So why do they use a minimum wage law to make low-skill immigration effectively illegal?

  14. Neal

    October 7, 2017 @ 3:49 pm

    14

    philg: I am not party to the deliberations of the people in Singapore who make these decisions so I can’t answer your questions. However, whatever the wisdom or folly of their policies with regard to Singapore, the country is so economically, geographically, demographically, and politically different from the U.S. that I’m not sure it is particularly relevant to this discussion.

    “They have a much higher labor force participation rate than the U.S. and also a much lower unemployment rate … why do they use a minimum wage law to make low-skill immigration effectively illegal?”

    Isn’t this evidence that a minimum wage law doesn’t always cause ruinous unemployment as is usually claimed here? What are the specific conditions which make a minimum wage right for Singapore but wrong for the U.S.?

  15. philg

    October 7, 2017 @ 3:59 pm

    15

    Hmmm… I thought that Singapore had no minimum wage for locals, but did impose one for foreigners. But http://www.mom.gov.sg/faq/work-permit-for-foreign-worker/is-there-a-prescribed-minimum-wage-for-foreign-workers-in-singapore says they don’t have one for anyone.

  16. philg

    October 7, 2017 @ 4:02 pm

    16

    https://en.m.wikipedia.org/wiki/Immigration_to_Singapore says there is a minimum to get a “pass”

  17. Neal

    October 8, 2017 @ 11:30 am

    17

    philg: Since you seem to be having such trouble with the anti-immigration side, allow me to give you some hints. Immigration may lower wages for native Americans, immigrants may bring beliefs or cultural practices which conflict with fundamental American values, immigration requires expansion of some government services and additional investment in infrastructure, immigration further stresses limited resources, and immigration may expand our footprint on the ecology. Of course, I would add reducing immigration would require costly adjustments throughout the economy, could throttle economic growth, would make it more difficult to address the challenges associated with an aging population, could adversely affect existing immigrant communities disproportionately, and would hasten the adjustment of America’s international geopolitical position relative to larger countries with rapidly growing per capita GDP.

    I think the problem isn’t that we have too much or too little immigration per se. The problem is that only government can manage immigration and the issues presented by immigration in our modern economy are too complex and dynamic for existing government structures to handle effectively.

    We could have quite an interesting conversation about market oriented approaches that government might use to more effectively manage immigration. But first, I would want to acknowledge that racial and ethnic animus is behind some significant fraction of the energy behind the debate. There is evidence for this proposition right in this thread. It is important to acknowledge this reality so we can then reject racial and ethnic animus as a legitimate consideration.

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