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Monday, May 6, 2013

More Data about Americans Abroad

Americans abroad are proof that countries of immigration can also be countries of emigration.  Flows in and flows out, mes amis.  This is why the net migration rate is something to watch. 

Emigration from the United States is pretty low.  There are an estimated 6 million Americans living outside the United States which is a drop in the bucket compared to the over 300 million Americans living in the homeland.

Not a lot is known about these 6 million U.S. citizens living outside the U.S. and both the American public and government are rather disinterested in them.  Unless of course they write a book (fairy tales really) about having "escaped" America to Belize or retired to France to rebuild a stone farmhouse.   These stories are always about individuals and their adventures and as such threaten no one.  They certainly do not inspire homelanders to look a bit deeper to see how common or uncommon such stories are.

Americans abroad are not part of the U.S. census so no one really knows how many of them there are.  The U.S. government does not officially track them when they leave the country and there is no requirement that they register with the local U.S. Embassy or give any indication of their whereabouts except on the hated tax forms. Even less interest is shown in their offspring who are, in most cases, also American citizens though they may have never set one foot on American soil and may or may not speak English.

The lack of solid information about Americans abroad means that fantasy is the order of the day.  Some are convinced that they are a bunch of hippy dippy lifestyle migrants (who vote Democrat).  Most are dead certain that they are rich tax evaders.  The only common opinion in this sea of speculation is that there is something a bit fishy about them.

As for the Americans abroad themselves, most simply want to be left alone.  Having removed themselves from the national territory, they want nothing more than to go about their lives.  Most will never write a book or a blog or join one of the many American clubs and communities that can be found all over the world.

Americans abroad and homelanders had for many years an uneasy truce based on willful ignorance on all sides.  Americans in the U.S. didn't really want to know how many people leave America and Americans abroad, in general, didn't want to be found.  This worked quite nicely and served everyone's interests until that day when the U.S. government changed its mind and decided that the American diaspora might be useful after all.  It was not the content of their characters, their role as a promoter of U.S. interests abroad or their inter-cultural and linguistic skills that made them interesting - it was the contents of their bank accounts.

Talk about putting the cart before the horse.  Here is a population that the American public and government know next to nothing about and yet, somehow, these people are supposed to singlehandedly put a large dent in the national debt - something that pleases the homelanders greatly since it kills two birds with one stone:  They believe it will mean no (or fewer) tax hikes for them and they can experience a perverse pleasure in punishing those who had the temerity to leave the United States for distant shores.  It might even serve as a sort of prevention - after all, we wouldn't want other homeland Americans to emulate them.  Like, for example, that large population of the young groaning under the weight of student debt that they have no hope whatsoever of repaying.

Where once we all (Americans abroad and homelanders) had an interest in ignoring each other, today Americans abroad have a very good reason to come out of the shadows:   The lack of information about us is being used against us.

One effort to shed some light on America's "domestic abroad" is a recent study conducted by Dr. Amanda Klekowski von Koppenfels of the University of Kent in Brussels.  She has been studying the American diaspora since 2007 and in 2012 she conducted an on-line survey and gathered information from over 800 volunteer participants.  The results of her research will be published in 2013 but she has been releasing some of her data on-line and it makes for fascinating reading.  Here are a few of her findings:

A Diverse Population:  A term like "lifestyle migrant" is not only a poor one but it is grossly inaccurate when it comes to describing Americans abroad.  Some are indeed rich but most are middle or lower-income.  Most work and they represent a variety of professions:  English teachers, interpreters, IT workers, secretaries, small business owners, contract workers...
Americans living overseas are retirees, whose dollars go further in Mexico, Costa Rica or
Thailand than they do in Florida. They are students, they are veterans, they are NGO workers, intra-company transferees. They are spouses of foreigners, and are stay-at-home mothers and fathers. They live and work overseas.
Here is her breakdown by profession/sector:
  • "Ca. 20% are involved in education in some way, either teaching and/or researching in secondary or higher education or teaching English. By comparison, ca. 2% of the US population work in education.
  • Ca. 20% of Americans overseas work in the IT or communications industry. By comparison, ca. 2% of the US population work in the information sector. 
  • Ca. 10% are retired; 
  • Ca. 8-10% are involved in arts or entertainment; 
  • Ca. 5-10% are home-makers; 
  • Ca. 5-10% are students; 
  • Ca. 5% are lawyers; 
  • Ca. 5% are authors or journalists; 
  • Ca. 5% work in the finance or insurance sector, with less than half of one percent overall at the managerial level. By comparison, ca. 5% of the US population work in the finance sector as well. 
  • Others run small “bed and breakfast”-type inns, others work in a variety of professional or technical services, including translation, others are social workers and in many more types of employment. "
Settlers versus Sojourners:   There are those who go abroad short-term to work or travel (sojourners) and there are those who settle in and stay long-term.  Koppenfels says that many Americans abroad are "accidental migrants":
These are US citizens who never meant to leave the United States permanently, but may have gone abroad for a study abroad program, an internship or a six-month backpacking trip, only to meet a partner or receive a job offer, with the result that the initial “temporary” stay has become one of 25 years. Some 40% of Americans living overseas have done so for more than 10 years.
Different Countries, Different Profiles:  Different countries attract different Americans.  Here in Paris, for example, I meet quite a few people in the "creative industry":  musicians, poets, writers, painters and the like.  Many of them are African-Americans and there is a history there that merits far more attention than it gets.    In Tokyo the profile was very different and the Americans I met there were mostly ex-US military.  Koppenfels implies that the same is true of Germany and one would imagine other places where the US military has a strong presence:
...perhaps 15% of Americans living in London are employed by a US-owned company, this percentage drops to just 1 or 2 % in Germany. On the other hand, in Germany, a number of former US military have remained after their last tour of duty, or have returned, often marrying German women, a pattern that is repeated in many countries with a US military presence. Some one-third of Americans in Germany are self-employed, the majority of those working as free-lance translators or English teachers. In short, patterns that are seen in one city or country are, for the most part, not indicative of Americans living overseas as a whole.
Reason for Leaving:  The question of why Americans left the U.S. and why some stay abroad long-term is one that few ask openly.  There are almost no studies about this which says to me that, on some level,  homelanders would really rather not know and Americans abroad would rather not say unless they can answer anonymously.  Oh, homelanders will ask an individual for his or her reasons but the question is rarely seriously studied at a higher level.  The exception to this, of course, is when an interest group in the U.S. wants to make political hay in support of some change they would like to see in the homeland.    Other than that, it is a topic that is whispered about  entre nous. (Another topic that is just as taboo is the number of Americans renouncing.) 

To the first question, "Why did they leave?" Koppenfels has some interesting data (and a hat tip to Roger Conklin who mentioned her findings and inspired me to look for more information):
  • "The largest single group, ca 25%, are individuals who have married a non-US citizen living outside of the United States.
  • Ca. 5-10% are former US military who have either stayed in their last country of posting or returned to a country of former posting.
  • Ca. 15% came to pursue studies/ study abroad/ internship.
  • Ca. 10% applied for and received a job overseas.
  • Ca. 5-10% accompanied a partner/ spouse who was moving for employment, most likely as an intra-company transferee.
  • Ca. 5% left the US on an intra-company transfer.
  • Ca 5% were looking for a more affordable quality of life.
  • Some 3 to 5% were born overseas to US citizens and have either remained overseas or returned to their country of birth.
  • Other US citizens left the US for a variety of reasons, including having been born to non-US citizens only temporarily in the United States, and leaving as infants. "
What is fascinating about this breakdown is what you don't see.  Where is that category "evil rich disloyal tax evader living it up on the Riviera?" that we hear so much about?  

Instead what you see are Americans who are raising families, Americans who work, Americans who served, Americans who study and are curious about the world, and retirees on fixed incomes.  In short, Americans very much like their compatriots back in the homeland.  

And if I may be permitted to vent for one brief moment?  

Shame on those back in the homeland, both the general public and the U.S. government, for treating them like criminals, for not caring for or about them, and for projecting their fantasies onto them of which the most laughable is the idea that these teachers, IT workers, homemakers, former military, students and retirees have enough cash to put a serious dent in the homeland's budget woes.

Dream on, America, dream on.....


bubblebustin said...

I'm so happy that this study was done and my husband and I chose to participate in it. I wonder though, which group of expats was more likely to have participated in it, the IT worker or the yacht cruising billionaire?
I can't wait for the results to be released. Thanks for the teaser!

Rosy the Riveter said...

Well said, as usual, Victoria. Well, if the US administrations didn't know much about Americans residing abroad before, thanks to our favorite FATCA, they will now. And what a surprise that will be ! Not filthy-rich yacht owners floating, champagne flutes in hand, off Monte Carlo, but ordinary hard-working joes. I for one came over because I couldn't get a job teaching languages in US universities because nobody wanted to learn them. Science and IT were in, foreign culture was out. So cheers! And have fun filling out the TDs and FBARs and assorted silliness.:-)

P. Moore said...

Super post, Victoria! When I think of all the headache & heartache that FATCA is causing and all the ridiculous costs involved in compliance only to see there is nothing in it with respect to Americans abroad, I don't know whether to laugh or cry. Of course, in my several decades living in Canada, I have yet to meet a rich tax evading fact I don't know any rich Americans living in Canada. Your blog is full of evidence which shows what little value the US gets out of its Congress and tax policy.

Anonymous said...

.... my research and, by extension, you, were mentioned in a recent article in the International Herald Tribune:
she was hoping to have her book published within a few months of the following article Thank you again for participating in the survey!!

a list of her books can be found here

SwissTechie said...

Very nicely written, thanks so much!

Anonymous said...

Law makers don't care about collateral damage, the purpose of FATCA is to keep the wealth from leaving the United States and to force home a lot of the wealth that has already escaped.

It's not about the wealthy, it's about the soon to be wiped out middle class, laws are passed by not by telling the truth but by telling a certain narrative that can be sold to the voters.

Renounce before you can't, things are going to get a lot worse and more laws will be passed to try and pressure you back to the homeland.

Innocente said...

Thank you for this well-written and thoughtful piece on Americans abroad. One of my favorite sentences in the summary of Prof. von Koppenfels' research is: "Overall, my research suggests no connection between popular images of Americans living overseas as uniformly quite wealthy and the diverse reality of Americans living overseas." This conclusion seems realistic for those of us who rely on public transportation to work and for shopping.

Professor von Koppenfels also reported her research in another format available at the ACA website:

Victoria FERAUGE said...

@bubblebustin, I participated too and was fascinated by the results. It confirmed a few of my observations about ex-military and surprised me with the low numbers of company transfers. I'm eagerly awaiting her book and I just looked and don't see it on Amazon. The title is supposed to me American Transnationalism in Perspective.

@rosy, I've been thinking of you lately. When you have a chance come over for a cup of coffee and we can sit in the garden. I love how you described why you left - science and IT in and foreign culture out. I wonder if that is still true today in the US?

@P.Moore, Thank you! Yep, I've never met any of those rich tax evaders either. Clearly we are not moving in the right (or the wrong) circles.

@anonymous, Thank you so much for the links. Looks like I have a few more titles to explore.

@Swisstechie, Thank you for your kind words and for visiting the Flophouse. :-)

@stateless, I agree and I think that narrative is so powerful (and has been bought hook, line and sinker by homeland voters) that I honestly think efforts against citizenship-based taxation won't yield any fruit anytime soon. Renouncing may be the best bet.

Tim said...

P. Moore

My sense is if you want to run into wealthy Americans abroad more often or not London is the place to find them. This of course is tied to the Finance and Insurance industries. Whenever you run into people who defend FATCA there defense inevitably tied to the financial services industry along the following lines:

1. A lot of non US banks ala SocGen, RBC, BNP Parisbas really want to do business in the US. FATCA is simply a legitimate cost of business imposed on them by the US for the ability to do business in the US.

2. A lot of Americans living abroad make a lot of money working in banking in London.

3. The financial services sector in London tends to be more loosely regulated than in New York. More lavish entertaining, more visits to strip clubs, more prostitution, heavier drinking and drug use. (All true and completely irrelevant to the issue at hand and besides it is not as if NYC is shrinking violet in the areas above).

Anonymous said...

Very nice post. But you forgot to mention expat small business owners.

There are plenty of them out there and they get punished the worst.

The CFC laws are so complicated it may as well be just plain illegal for an American to own a small business outside the Homeland.

Unknown said...

There is one thing about the FBAR and Form 8938 that drives me nuts and, surely in some circles, tends to reinforce the "fat cat" image: try selling a small apartment, receiving the money in a checking account then, while you wait to pay for your next apartment, distributing it among the various interest-bearing accounts you may have, then transferring it back into the checking account to pay for the new apartment. The same money will appear in each of those accounts as the highest amount in the year... makes this particular retiree and self-employed translator look pretty well off!

(Thanks for this posting, Victoria! and for the concentrated tidbits from Amanda's great research...)

Victoria FERAUGE said...

@anonymous, You are absolutely right and I know a few here in France (independent contractors too).

@Lucy, Good point. And it happened to us when we sold our two little apartments in Toulouse and then bought our house a year or so later. I filled out the 8938 last tax season and it was so silly - just a rehash of what they had already asked for on the FBAR.

Both scare me because my entire financial life is one those forms which I then mail to the US. If someone with evil intent got ahold of them they could have a great time.

Rosy the Riveter said...

I've been thinking of you too, Victoria, and will be over ASAP. I'm still in Italy where I've been doing conferences at 2 universities. Funny how the students here are hungry for American stuff. Yet not too many Americans I know back home are interested in our lives over here. Meantime, as my trip winds down and I contemplate arriving home to the mess I left there, I know the first thing I have to do is FBAR and TD and 1040 myself to Kingdom Come - for absolutely no good reason. But I'm VERY VERY VERY GOLAD YOU4RE ALRIGHT! :-)

Rosy the Riveter said...

P.S. About those forms, use registered mail - or take them to the Embassy. There's a nice fellow in there who will take them.

bubblebustin said...

Haven't heard much from you lately, I hope you are ok, or are you just overwhelmed with your move and all? In case you don't know, Dr KvK has a new survey for expats out! Take care.