Friday, December 11, 2015

Effects of Migrant Workers on the Local Labor Market & Economy

The frustration on the face of the site supervisor is palpable; the project is running behind schedule and over-budget. His problem is the work ethics of the local labor force. To create temporary employment for the local youth population, the Ahoada local government in Rivers State had instructed the contractor handling a hospital project to employ auxiliary and non-technical labor from this specific pool. Therefore, daily labor like masonry, block molding, foundation work, and site clearing jobs were assigned to the local, mostly inexperienced, youths.
Miles away from Ahoada, at the construction site of a mini shopping mall in Ojodu at Ikeja, Lagos state, work is going on at a breakneck speed; temporary day laborers are dashing up and down the makeshift wooden stairs moving mixed concrete and cement up the second level for the decking, and the foreman can be heard from a quarter mile away bellowing orders and threats of dismissal to the panting mix of muscular and skeletal staff.
At a farmland in Arochukwu, Abia state three young men in their mid-twenties are gathering and setting fire to brushes as fast as possible, discussing among themselves in a dialect alien to the indigenous owner, though in Igbo language.  At a corner of the farm, an elderly woman is busy preparing meals for the young men. A couple of hundred yards  from the farm is another, much bigger, piece of farmland where an elderly couple, four young men and a girl, are busy doing the same things as the young men in the first farmland, except that the pace is much slower and the level of urgency was evident in its absence. The male adult spends much of his time sighing and urging the young men to pick up the pace.
At a soak-away construction site behind a newly-finished single family home at Afugiri village in Umuahia, two young men covered waist-high in red mud huddled in deep conversation; a third is on the phone while leaning on a shovel, while another walks to and fro a nearby stream fetching and emptying buckets of water into a drum. It is 11:00AM in the morning, and the freshly mixed cement and stone is beginning to cake under the hot sun; a half case of Gulder beer sits under a large mango tree, and  three empty bottles litter the work area, along with cigarette butts, while three other half-empty bottles sit in close proximity to the young laborers.
What is wrong with the different scenarios described, and how can they be explained? This is the question this commentary will attempt to address in an effort to explain the effects of migrant and transient workforce on the local labor markets and economies.

Decision-Making Powers & Flexibility
In the Ahoada example, contractual restrictions limited the recruitment of casual labor to a specific pool – the local unemployed youths; this reduced the power and flexibility of the contractor to source for cheaper and more qualified labor elsewhere, thereby creating a laisse-faire environment at the site. This attitude resulted in delays and cost overruns. The indigenous staff, immune from severe discipline – including termination –was lax in their work ethics. Oblivious, or in spite of, cost overruns, they view any delays in completing the project positively as extra paid workdays for them; so, there is no incentive to put in their best efforts since they cannot be replaced with outside labor.
Contrast this with the scenario at mini mall construction site in Ikeja where the contractor is under no such restrictions; majority of the day laborer are transported daily from outside communities as far as Surulere and Oshodi, and have no ties to the local community. Daily pay rates and targets are pre-negotiated, and expectations are communicated to everyone prior to arriving at the site. Therefore, desirous of a good day’s wage, and protective of their good work ethic, the laborers have no alternative than to put in their best efforts.
There exists a relationship between the two scenarios above and the two farmlands at Arochukwu. The young farmers at the first site are seasonal migrants from Afikpo in Ebony State who migrate in the local communities/villages during the farming season, with a long history of farming. They have no strong communal ties beyond their farming services for a moderate fee. To continuously attract job offers, they must offer their best services to their clients. The situation at the second farm, where a detectable level of laxity exists, is due to the close personal relationship between the owners and the workers. So, even though these men are contracted at the same going daily rate of N1000, their output is less than those of their counterparts from Afikpo; unfortunately, unlike in the first farm, the owners of the second farm are hesitant to exercise any form of discipline due to familial and communal ties to the workers.
What is going on at the single-family soak-away construction site is akin to the situation at the second farmland; the owner is closely related to the man filling the drums with water who serves as the project supervisor, and he has recruited his friends to construct the soak-away. This close relationship with the laborers erodes his authority to hire and fire; therefore, the project is expected to suffer delays and cost overruns. Preference for a migrant workforce in the community, which is in abundance from as far away as the Southwest and as close as South-south states of the federation, would have resulted in meeting project deadline and cost-savings.
Beyond the exemplary difference in work ethics between indigenous and migrant workers, there are several other effects migrant workers – transient and resident – have on their host communities. 

Effects on Labor Supply & wage Costs
1.       The availability of non-specialized migrant workers in any community results in an increase in available workforce in the local labor market, or increase in the supply of labor; this excess supply causes a depression or downward trend in the cost for labor, thereby creating a favorable buyers’ market. In the example of the Ahoada hospital, if the contractor had the flexibility to hire from outside the indigenous pool, he could have recruited from the migrant pool at a very low daily rate; thereby not only saving labor costs, but completing the project on time. The same applies to the second farm and the soak-away projects. The possible savings from labor costs could be re-invested in other construction materials, or in hiring additional labor.
2.       Apart from forcing a depression in labor costs, Migrant workers introduce new skills and innovative technology into the local labor force that may have been previously lacking; new blocking molding technology that could either doubles production quantity or uses less combination of cement and sand mix while retaining desired quality. New power tools that enhances speed and efficiency cutting, drilling, or scooping, leading to reduction in completion time and project costs.
3.       One major disadvantage of migrant workers in the community is the increase in unemployment among the local workforce. Migrant workers undercut the bargaining power of the local pool, and force them to accept the same daily wage as their guests, which is usually much lower than what they usually get without competition. This “encroachment”, initially, causes resentment towards the migrants and, in most cases, resulting in invasion and blockade of construction sites for extended periods of time. On the positive side, the presence of migrant workers could force a change in work ethics of the local labor force, and result in a healthy competition with the migrant workers. Therefore, it is safe to speculate that though in the short term, presence of migrant workers could have a negative impact on the local labor force; in the long run, their presences does effect a positive change in the work ethics of the local labor force, and the host community is the main beneficiary.

Social & Economic Impact
Migrant workers also introduce their cultures, customs, traditions, and habits into their host communities, resulting in a rise in new businesses catering specifically to these needs, either short or long-term. For example, a migrant Yoruba or Idoma community in faraway Okigwe, Ahoada, or Kazaure will have to source for their unique needs within the host business community; this desire to satisfy a need results in establishment of new businesses, or extension of existing ones, to accommodate these needs.  The increase in business activities results in increased tax revenue over time which is applied to improving social services like road, school and hospital repairs, culminating in the creation of more employment opportunities not only for the duration of the work season but, in most cases, for the long term. For example, the influx of Akwa-Ibom house helps to the Port Harcourt and Lagos metro areas led to an increase in the string of businesses catering to their specific needs - especially consumer goods - and forcing existing ones to diversify their product and service offerings. Altogether, the creation of new business and expansion of existing ones created more employment opportunities within and around impacted communities. This multiplier effect is recreated in many communities where large migrant workers exist.
Because most migrant workers are transient and leave their families behind in their native communities, they remit most of their earnings back home; therefore, they are not able to make substantial capital investments in the economies of their host communities. Their major investment is in consumer goods like food, clothing, daily hygiene needs, and rental accommodation which account for between 25 – 50% of their earnings. Depending on the type and extent of the economic activity – road and housing construction, farming, and/or harvesting – which could last anywhere from 3 to 18 months, most beneficiaries of migrant labor investments are landlords, restaurant and saloon owners, food vendors (or mama put), tailors, cobblers, and the local churches. Other beneficiaries include the local consumer markets, local clinics and pharmacy and, where available, prostitutes.

Cultural Benefits
For the few among the migrant workforce who have no family ties – wives and children – in their native towns, opportunities exist for inter-marriage and blending of different cultures and customs. This new relationship results not only in an increase in the local population over time, but also in making substantial investments in capital goods and property in the communities due to a reduction or outright elimination of remitted earnings.  Small, low capital businesses, like bicycle repair, vulcanizing, technology products repair services, cyber cafĂ©, carpentry services, and provision stores, are some of the favorite businesses of migrant workers. These small businesses create apprenticeship opportunities for the locals, and the competition with existing like businesses create a downward trend in cost thereby favoring the consuming public.
 Apart from the few listed benefits – low labor cost, improved work ethics, and introduction of new technology, improved efficiency, and increased business activities - of migrant workforce in host communities, they change the social, economic, and cultural dynamics of host communities, especially through inter-marriages and cultural affiliations. Though in the short-run, migrant workers face hostilities and suspicion from their host communities; eventually, with continued interactions, they are accepted and gradually assimilated in the community and this result in a mutually beneficial relationship in the long term.

Felix Oti

Arlington, Texas
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