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Wednesday, October 23, 2013

The Labor Brokerage State

Imagine a world where if you wanted to work abroad, your government was there to help.

Such is the nature of a labor brokerage state.  It's an old idea with a new veneer.  When states feel the pinch of labor shortages, other states have been more than willing to seize the opportunity to send a portion of their population abroad to fill that need.  This is just as true of the 21st century as it was of times past.   The bracero programs between the US and Mexico meant a flow of experienced farm labor for US agriculture.  During the 1950's and 60's Germany signed agreements with Italy, Turkey, Morocco, and other countries for low-skilled labor to work in their industry during economic booms.

The example before us today is the Philippines.   In Migrants for Export Robyn Magalit Rodriguez describes an entire state apparatus built to market that country's labor to the rest of the world and to facilitate the ability of its citizens to work abroad.  Having worked in my time for both temp agencies and multi-national consulting companies,  I had a sense of déjà vu as I read.  The difference, of course is that  my country was never involved in my seeking and gaining employment abroad.  It required a mental leap to consider a situation where the home country takes the place of the temp agency/consulting company.

The very start of state intervention, says Rodriguez, is the authorization to leave, also known as a passport.  No migrant goes very far without papers and what is usually required is a passport issued by the sending country and a visa issued by the receiving country.  Behind every passport are breeder documents which are issued and/or validated by the government.  That is the very first level of control over the movement of any country's people (there are exceptions to this but it is generally the rule).

An American, a Canadian, a German, a Filipina and a Brazilian are all required to ask for permission to leave the country.  Perhaps you find that characterization a bit strong.  Freedom to leave one's country is enshrined in international law, you might say, and no country can deny you that right.  My answer would be to suggest that you go and look at your country's passport issuance procedures and find all the ways they can decide to legally deny you those documents you need to travel outside your country.

In general countries trust other countries to issue valid papers that do not require intense scrutiny or extensive investigation on the arrival side.  Too many people moving about the world and not nearly enough resources to check the documents behind each and every passport.  "International migration, in other words, relies on relations of trust between nation-states secured through process of 'authorization'."

Making it possible for citizens to leave is not the same as encouraging them to do so.  To my knowledge the French Republic does not invite its citizens to seek employment outside of Europe.  The US certainly does not do this either.  And neither engage in global marketing campaigns to extol the virtues of their workers with an eye toward finding them jobs elsewhere.  The Philippines does.

In fact the Philippine government has an entire agency devoted to this task.  It's called the Philippine Overseas Employment Administration (POEA).  Like private temp agencies and consulting companies this agency performs the following services:

Market research:  The POEA actively scours the world for opportunities for its workers.  It's not just about a potential receiving country's labor needs, it is also about the immigration laws.  The anti-immigrant rhetoric of many governments be damned, there are almost always loopholes.  If the local laws don't welcome one kind of labor, Filipinos can be retrained in what that market allows and needs.

Business opportunities:  They also keep a keen eye on potential biz ops.  In a 2007 POEA report, Rodriguez says, "the US Marines relocation to Guam is identified as a potential source of jobs..."  Canada was another example, with companies like Microsoft establishing subsidiaries in that country. If Microsoft in the US isn't hiring because of US immigration law, then perhaps Canada is a better bet.  Same company - different location.

Marketing:  The POEA has a marketing branch which produces glossy brochures that explain all the advantages of hiring Filipino labor.  Included in these brochures are assurances that Filipinos are modern, skilled, English-speaking and have a good work ethic.  There are direct-mail campaigns targeting certain industries abroad and even exhibits at international trade fairs.

All the above could be and are done by the private sector but there is one area where only the Philippine government can act:  government to government negotiations and accords.

Bi-lateral Agreements:  The Philippines has signed a surprisingly large number of bi-lateral agreements and memorandums of understanding with countries (clients) all around the world.  It's not just countries in the Middle East but also nation-states in Europe and North America.  Many Canadian provinces have such agreements (Alberta, British Columbia and Manitoba) and the POEA website has announced a new MOU with Saskatchewan signed on October 7, 2013.

None of this activity is top secret.  In fact the Philippines is quite transparent about what they are doing and why.  A good place to get a feel for how this works is to look at the POEA annual report which reads very much like the annual report of any business - there is even a financial statement at the very end.

As I said before this is not a new idea.  States have always had reasons to encourage short or long-term emigration.  It serves all kinds of purposes from reducing the local ranks of the destitute and unemployed (and thus reducing the likelihood of social unrest), to raising or maintaining standards of living back home through remittances and investment from abroad.  Sending states have always recognized that emigration was "politically beneficial and economically profitable" (Green & Weil 2007).

But what the Philippines does goes far beyond simply providing the necessary documents and then waving good-bye and saying "auf Wiedersehen".  This is emigration as a state-sponsored enterprise with every citizen a potential overseas worker, and leaders of the country as managers of a global employment agency.

Because the state is so involved there is a certain expectation that the government look out for its overseas work force and protect them when necessary.  Easy to promise, hard to do.  When a migrant is physically present in another state, all kinds of things can happen and the sending state (be it a powerful state like the US or Canada or a less powerful one like the Philippines or Mexico) has only limited means at its disposal to enforce agreements and ensure that workers (their citizens) are treated fairly.   Some horrendous things have happened to Filipino workers in foreign countries.

The 2011 POEA report talks about Worker Protection and about policing local private recruitment agencies and providing repatriation services for overseas workers who need to come home.

But they also mention enforcement of Republic Act 10022 signed in 2009 which was written with the protection of overseas workers in mind.  It says:
"In the pursuit of an independent foreign policy and while considering national sovereignty, territorial integrity, national interest and the right to self-determination paramount in its relations with other states, the State shall, at all times, uphold the dignity of its citizens whether in country or overseas, in general, and Filipino migrant workers, in particular, continuously monitor international conventions, adopt/be signatory to and ratify those that guarantee protection to our migrant workers, and endeavor to enter into bilateral agreements with countries hosting overseas Filipino workers."
"Deployment of Migrant Workers. - The State shall allow the deployment of overseas Filipino workers only in countries where the rights of Filipino migrant workers are protected. The government recognizes any of the following as a guarantee on the part of the receiving country for the protection of the rights of overseas Filipino workers:
"(a) It has existing labor and social laws protecting the rights of workers, including migrant workers;
"(b) It is a signatory to and/or a ratifier of multilateral conventions, declarations or resolutions relating to the protection of workers, including migrant workers; and
"(c) It has concluded a bilateral agreement or arrangement with the government on the protection of the rights of overseas Filipino Workers:
Provided, That the receiving country is taking positive, concrete measures to protect the rights of migrant workers in furtherance of any of the guarantees under subparagraphs (a), (b) and (c) hereof."
This is a social contract enshrined in national law between emigrants and the state.  Filipino labor migrants are "heroes" who sacrifice something to work abroad (not unlike the way the Portuguese government portrays its emigrants) and they are expected to send back remittances to support the home country.  In exchange, the Philippine government provides the necessary documentation (passports), training, opportunities, and finally, protection while abroad.

Is this a good deal for the Philippine state and citizens alike?    Rodriguez is skeptical and she uses a frame and language I would describe as "anti-globalization" to make her points.  Fair enough but I would have liked her book better had there been a bit more of the migrants speaking for themselves.  The question I asked myself at the end was simply this:  If there are that many abuses and this represents sheer exploitation on the part of the Philippine state and its clients, why do Filipinos and Filipinas continue to work abroad in large numbers?  Are they simply deluded poverty-stricken pawns being gently coerced into something resembling modern indentured servitude or are they actors with agency and an agenda of their own?  

I can't answer that question. In all fairness to Rodriguez the book was not intended as a exploration into the motivations and feelings of Filipino migrants.  Her job, as she saw it, was to describe the history and the functioning of the state apparatus.  And yet, with the language she uses, she is making value judgements about that system from her perspective as an American academic.  Like so many Americans, she may be the child of immigrants but she is not one herself.  That is something that needs to be taken into account while reading her book.

That said, I liked this book and I will add it to my international migration reading list.  However, I will also go looking for other books that provide the Filipino migrant perspective. Would they agree with her assessment or do they have another?  As James C. Scott says,  "Every subordinate group creates, out of its ordeal, a "hidden transcript" that represents a critique of power spoken behind the back of the dominant."  


Tim said...

I posted the following comments on A Christians blog today. I thought they might be relevant to your post.

One thing New York, Toronto, London, and Paris all have in common is that their local economies are heavily denominated by large financial insitutions despite the fact all four cities are in different countries and cultures. On the otherhand cities like Boston, Montreal, and Seattle are decidedly less so denominated by big banks.
Big banks really hate restrictions on the flow of capital and desperately wish to avoid things the FATCA 30% witholding tax. In turn politicians representing cities such as NY, Toronto, Paris, London etc are going to tend to support the hometown industry and support policies supporting the free flow of capital such as the signing of FATCA IGA's. Most importantly if given a choice of choosing to have either the free flow of labor or the free flow of capital the big banks will choose the free flow of capital as it is essential to their modern business models.
In Boston for example big banks are not the dominate employers or sources of institutional power. Instead entities such as universities(MIT and Harvard), Medical facilities(Partners Healthcare/MGH/Brigham's), biotech/pharma companies, and software/technology companies are the "heavy hitters" in the local political power structure. These entities at some level could care less about the free flow of capital however, the free flow of labor is absolutely essentially to their institutional business models of sucking in the best and brightest from all over the world to Boston and Cambridge. Restrictions on labor mobility such as other non US countries imposing citizenship based taxation, "full" FATCA reciprocity on US Financial institutions, etc would all be deeply harmful to entities such as Harvard, MIT, Partners Healthcare et all and their institutional models of recruiting the best doctors/researchers/scientists in the world to join their organizations. On otherhand if necessary to keep the free flow of capital worldwide institutions such as Goldman Sachs and JPMorgan could probably live with other countries imposing citizenship based tax on their US "resident" citizens and being required as USFI's to provide FULL FATCA reciprocity to US FATCA IGA partner countries.
In many non US countries the largest companies and institutions are often the large internationally active money center banks. In these non US countries such as France, Germany, Canada, the UK etc you really don't have the institutional counterbalance against the largest banks that you might have in the US explained above. What is interesting in the US if it came down to knife fight between those in favor of capital mobility(like Goldman Sachs) vs those in favor of labor mobility(such as MIT) it is not exactly clear to me which side would have the upper hand. It is true that Goldman has a lot of friends at IRS/Treasury and the Treasury Dept as an institution has always favored the large money center banks. However, Massachusetts has just as many Senators as New York State does plus after the 2008 financial crisis the large New York City banks are hated and vilified by many. The "mistake" the largest US banks in favor of capital mobility over labor mobility may have made is to have become way to geographically concentrated in the NYC metro area

Tim said...

This is the second comment I made on Allison's blog. Note the reference to Washington State:

I was actually trying to find a different article but the one below somewhat makes the same point about the decreasingly competitiveness of NYC and NY State vis a vis not just "red" southern states but also California.

Well, as it turned out, California knew a lot about baseball and many other things that let, using a quintessentially New York City metaphor, the Golden State eat New York’s lunch. What were they? Apart from weather, I believe four count, but there are surely more. First, it was suddenly the fastest growing state. So, it had “the new” going for it – always an advantage in a nation where “adventurous consumers” are a unique aspect of our economy. Americans continue to prove that for us “the new” makes us perk up and pay attention. When easterners could really get to see what California was all about, thanks to the plane and television, it turned out its charms, including its exploding economy, were hard to resist.

Second, it was inventing its future, a non-agricultural future, without the burden of much of an old industrial past. The artifacts and ghosts of a once dominant manufacturing economy didn’t hang over it. There was no golden age of the canal in California. The Gold Rush was not an economically sustaining experience. Western states bought typewriters — they didn’t really make things (do movies and wine count?), rather, they grew fruits, nuts, figs and vegetables. Money came from the ground – oil and cash crops. California had little in the way of heroic industrial achievements reaching much before World War II when it, and Washington State, began to dominate “new” metal fabrication on a grand scale. California built ships in just days! And it knew how to make aluminum into airplanes.

Third, California faced the new “new” world, the Pacific Basin. Japan was an economic colony of the United States for a long time after the war and California was its gateway. Korea demanded that California dominate wartime shipping long after the European Theatre of WWII had recovered its economy. Nixon’s trip to China in 1972 was of the greatest consequence in shifting the American worldview toward Asia and California stood the most to gain as a matter of geography.

But, in that which matters most to any state’s economy in the emerging post-industrial age, California was winning the human capital race. By 1970 California was the undisputed home state for technology research. Its powerful public university system and its eminent private institutions were outperforming New York’s equivalents by whole magnitudes. By 1970 California’s research universities enjoyed a threefold advantage in funded research (the basic work that often finds its expression in new companies), on a per capita basis, over New York’s schools! The nascent venture capital industry came together in California in the early seventies largely to exploit the research conducted in its universities. New York’s canal route had modeled the Silicon Valley in the industrial age but it couldn’t keep up in the intensely research-based age of the semi-conductor.

To my original point as New York, Toronto, and Paris have lost competitiveness in other industries they have become more and more dependent on banking and financial services and the free flow of capital whereas to California the free flow of the labor is much more important.

Victoria FERAUGE said...

@Very interesting analysis Tim. There is a very good book I will dig out for you about the modern city-state.

What is interesting about Paris or New York or San Francisco is that they do not always agree with the policies of the governments of the territories in which they find themselves. In the big cities in California their view of immigration is very different from that of the state as a whole or of the US. I think Paris is the same.

Tim said...

Interesting. I would say their are exceptions to your rule the Cities of Boston/Cambridge and the State of Massachusetts have in modern times always been closely aligned in policies and viewpoints.

There are some exceptions I can think such as the statewide abolition of Rent Control in Massachusetts(passed by a statewide majority of voters over wishes of those in Boston and Cambridge. Rent Control was really only in effect in those two cities).

The point I was trying to make to Allison was in most big European cities(London, Paris, Frankfurt, Amsterdam, Milan, Madrid etc) the "Big Banks" are the dominant business institutions. Some of this is do to the fact that every EU country wants its own "National champion" banks(And thus every EU country wants to sign up to FATCA to protect its national champion banks). On the other hand cities like Seattle, San Francisco , and Boston don't really care anymore about having "big banks" headquartered in town.

I would say in my experience Paris as the largest city in France bar none is almost by default going to have a very high concentration of businesses. However, in France for example many of the best high profile companies and industries are located outside of Paris. I am thinking for example Airbus and the airplane industry centered in Toulouse and Bordeaux. Then you have Michelin based in the Massif Central and the chemicals and pharmaceuticals companies based in Alsace.

Lets put it this way if the US passed for the Foreign Tire Control Act designed to "regulate" the operations of Michelin in Clermont-Ferrand I suspect the politicians in the Massif Central would be up in arms protesting at the US attack on "their" industry. Yet the politicians in Paris and the banks seem to have this go along to get along mentality with regards to FATCA.

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