The number of people who migrate in search of work opportunities to improve their livelihoods is on the rise worldwide (ILO, 2017, ILO, 2015). At the same time, migrant workers have also been vital in responding to international labour market demands (ILO, 2015). However, migrant workers often encounter several challenges and difficulties in their country of destination, which are associated with costs and increased vulnerability. These challenges may not only include economic costs, but also health, social, and legal costs (Martin, 2010, Basaran and Guild, 2018).
Economic costs of migration
Migrant workers experience several economic costs, which are related to access to information and documents, health checks, and fees (Martin, 2010). Such economic costs are even more pronounced for low skilled migrant workers, as costs tend to be more significant the lower the skills level (Martin, 2010).
According to a report from the International Labour Organization (ILO), “worker-paid migration costs can be as high as a third of what low-skilled workers will earn in two or three years abroad in certain migration corridors” (2016, p. 1). To cover costs to migrate, workers may borrow money at high rates, resulting in debt and to the “need to work overtime or even take a second job abroad” (ILO, 2016, p. 1-2). The general findings in literature, according to the ILO report, reveal that “migration costs are regressive – costs fall as workers’ skills and wages increase” (ILO, 2016, p. 2).
A report from the International Organization for Migration (IOM) has found that people often move with the expectation that the benefits of moving will be higher than costs (Martin, 2010). However, migrant workers encounter several costs, which contribute to their vulnerability.
According to the IOM report, most common economic costs for migrant workers are related to (Martin, 2010):
- Information – obtaining information about jobs abroad (as most migrant workers find employment abroad through private recruiters)
- Documents – required documentation for legally moving to the country of destination. Obtaining documents needed when migrating for work such as passports, visas, work contracts, and health certificates. These documents “cost time and money, and particularly low skilled migrants rarely know how to navigate bureaucracies at home or abroad” (Martin, 2010, p. 4).
- Transportation – travel costs involved in migrating. Those migrating for work in neighbouring countries have a lower economic cost as they generally travel by bus or a van, whereas those migrating to more distant destinations have more variable costs.
Beyond economic costs: The migrant premium
Beyond economic costs there are other less easily quantifiable barriers faced by migrant workers, such as social, legal, and health costs. This diversity of labour migration costs was denominated ‘migrant premium’ and categorised as follows (Basaran and Guild 2018):
- Pre-departure – such as visa costs, travel costs, pre-departure loans, document fees, and health test costs.
- Conditions in the destination country:
- Wages and work conditions (wage gap, right to change employment, representation in labour unions)
- Living standards and health (health care, housing, illnesses, occupational hazards)
- Family (family reunification, children, education)
- Contributory schemes (social security and unemployment insurance)
- Non-contributory schemes (health care, income support, and child support)
- Access to justice (access to courts, legal aid and assistance)
- Remittance and return costs - including portability of social security, and losses due to migrant workers’ legal status through fines, confiscation or expulsion.
Other such costs experienced by migrant workers can include (Martin, 2010):
- Psychological - costs of separation from family and friends
- Political – costs of not being able to participate in the political process in the country of destination
Implementing social protection to mitigate costs for migrant workers
Migrant workers, in special seasonal temporary workers, are often excluded from social protection systems and are particularly vulnerable to economic shocks, unemployment and poverty (Hennebry, 2017). Access to social protection coverage in their new country of residence, such as social security and health care, could help reducing the vulnerability of migrant workers and decrease certain costs involved in labour migration.
Social protection could be ensured to migrant workers by states through the establishment of:
- Bilateral Labour Agreements (BLA) – Agreements that describe the responsibilities and actions to be undertaken by each of the parties involved in order to accomplish their goals. BLAs impart legally binding rights and obligations (Wickramasekara and Ruhunage, 2018).
- Memoranda of Understanding (MOU) - General agreements for cooperation between states. MOUs are characterised by a broader framework, describing common goals and plans between parties. These agreements are generally not legally binding (Wickramasekara and Ruhunage, 2018).
- Social Security Agreements (SSA) - agreements between two states which have two key objectives. The first objective is to prevent migrant workers from paying social security contributions in two countries, that is, their country of destination and their country of origin. The second is to coordinate the provision of benefits to allow migrant workers to have equal treatment abroad. SSAs certify that the social security rights in the host country of the migrant worker are maintained (ILO, 2017).
The potential of BLAs, MOU, and SSAs has been recognised by the ILO (Wickramasekara and Ruhunage, 2018; ILO, 2017). By developing BLAs, MOUs, and SSAs that specifically address social protection terms and provisions, states could minimise challenges faced by migrants and promote better livelihoods for migrant workers.
Bilateral agreements between governments could serve as tools for improving protection for migrant workers, through specific terms such as guaranteeing social security, pension, as well as protection from exploitative work practices, high recruitment and remittance fees (ILO, 2017). Despite the potential of such agreements for protection of migrant workers, they are still far from ideal. The ILO, for example, has stated that the monitoring of BLAs is substandard and that adequate administration is needed (ILO, 2019).
Research conducted by the ILO has also shown that not all agreements include specific terms to address social security (Panhuys et al., 2017). Moreover, while SSAs are more detailed than BLAs and MOU, especially with regards to the responsibilities between the parties, there are still categories of workers and benefits that are not covered by SSAs (ILO, 2017).
Therefore, bilateral agreements, such as BLAs, MOUs, and SSAs, have the potential to aid in reducing some of the costs burdened on migrant workers. However, including specific terms for social protection of migrant workers and adequate monitoring of agreements are needed in order to ensure better outcomes.
Basaran and Guild (2018) Global labour and the migrant premium: the costs of working abroad. Routledge. 132p
Hennebry, Jenna (2017) ‘Securing and insuring livelihoods: migrant workers and protection gaps’. In. McAuliffe, M. and M. Klein Solomon (Conveners) (2017) Ideas to inform international cooperation on safe, orderly and regular migration, IOM: Geneva. 6p. Accessible: https://publications.iom.int/system/files/pdf/securing_and_insuring.pdf
ILO (2019) Bilateral agreements and regional cooperation. Accessible: https://www.ilo.org/asia/areas/labour-migration/WCMS_226300/lang--en/index.htm
ILO (2017) Study on bilateral labour and social security agreements in north africa. International Labour Organization (ILO). 53p. Accessible: https://www.ilo.org/wcmsp5/groups/public/---africa/---ro-addis_ababa/---sro-cairo/documents/publication/wcms_621046.pdf
ILO (2016) The cost of migration: what low-skilled workers from Pakistan pay to work in Saudi Arabia and the United Arab Emirates. International Labour Organization (ILO). 50p. Accessible: https://www.ilo.org/wcmsp5/groups/public/---asia/---ro-bangkok/---ilo-kathmandu/documents/publication/wcms_514127.pdf
ILO (2015) Fact sheet: labour migration highlights, N. 4, International Labour Organization (ILO). 4p. Accessible: https://www.ilo.org/global/topics/labour-migration/publications/WCMS_384861/lang--en/index.htm
Martin, Philip (2010) Background paper WMR 2010: the future of labour migration costs. International Organization for Migration – IOM. 16p. Accessible: http://publications.iom.int/system/files/pdf/wmr2010_labour_migration_costs.pdf
Panhuys, C. et al. (2017). Migrant access to social protection under bilateral labour agreements: a review of 120 countries and nine bilateral arrangements, ESS - working paper n. 57, International Labour Organization. 54p. Accessible: https://www.social-protection.org/gimi/gess/RessourcePDF.action?ressource.ressourceId=54405
Wickramasekara, P. and Ruhunage, L. K. (2018). Good practices and provisions in multilateral and bilateral labour agreements and memoranda of understanding, International Labour Organization. 92p. Accessible: https://www.researchgate.net/publication/330933589_Research_report_on_good_practices_and_provisions_in_multilateral_and_bilateral_labour_agreements_and_memoranda_of_understanding