The disconnect between reality and perception of the impacts of migration suggests an important role for community investors
Ignited largely by the Syrian refugee crisis, an intense debate over the public value of immigration is now playing out across the political agendas of several migrant destination countries, including Germany, the United States and the United Kingdom. The debate has led to a recent surge in research on the economic impacts of migration. While the impacts of migrants depend on their socio-demographic traits– some older migrants will likely have negative impacts on the fiscal purse – most studies find that on average, migrants are younger and better educated than previous generations and contribute more to taxes than they withdraw from social assistance programs and public institutions. Even the most vulnerable migrants – refugees – contribute significant economic dividends for host countries.
Despite the emergence of empirical evidence demonstrating the net positive impacts of migration on their host economies, in general, the public perception of migration is becoming increasingly negative. Migrants are seen as over-burdening public schools, affordable housing programs and transportation systems, while contributing little in return to their host economies.
This disconnect between public perception and empirical evidence is deeply concerning for the trajectory of public policy and the resulting impacts on global financial markets. Indeed, Brexit has been largely attributed to the fear and contempt displayed by the British working class for migrants. This negative public perception could continue to cast a dark shadow over political agendas of many migrant destination countries, influencing how political leaders respond to future refugee crises and shape broader immigration policies.
For many, the solution for laying to rest these harmful myths around migration can be found by demonstrating the business case for investing in welcoming and integrating migrants. For example, philanthropist George Soros committed last month to investing $500 million in global refugee integration to “show how private capital can play a constructive role helping migrants.” Similarly, several public corporations have committed to investing in hiring migrants and refugees on basis that attracting international talent and diversity is good for business. Governments are also investing in migrant settlement and integration programs, using innovative pay-for-success models to demonstrate the public value of migration, including diversity, increased innovation and new sources of talent, to name just a few.
While initiatives such as these are encouraging, a recent report by the OECD suggests that they will not be sufficient to address negative public perceptions of migration. The report explains that public perceptions of migrants are often formed at the local-level, while academic studies focus on the impacts of migrants, such as on wages and unemployment, at the national level. Moreover, since migrants tend to concentrate in urban regions when they resettle in their new host societies, the impacts of migration are not evenly spread across the country. This uneven distribution can have negative impacts at the local level due to perceived competition between locals and migrants for limited resources and services, such as affordable housing units, public transportation and access to education, even though at the national level the net impacts are often found to be positive.
In other words, the impacts of migration at the macro-level are not simply the sum of the impacts on the local economies. Therefore, addressing the complex dynamics of migrant integration at both the local and national levels is key to changing negative public perceptions.
Local investors with intimate knowledge of their communities, such as credit unions, community development financial institutions and community foundations, have a key role to play in addressing negative public perceptions of migrants. Given their deep understanding of the local economies, these community investors can help to direct capital investments into social initiatives that are under the most pressure by increasing migration.
For example, the Vancouver City Savings Credit Union (Vancity) has invested in Refugee Welcome House, a short-term housing and resource center for new refugees. The credit union has also introduced interest-free loans to members who renovate their homes to build new rental suites for refugees. By implementing innovative solutions to address the potential pressure that migration can place on affordable housing, in a city where affordable housing is in desperately short supply, community investors such as Vancity can help to alleviate local pressures of migration and reverse negative public perceptions toward migrants and refugees.
However, community investors acting alone will not be able to achieve the scale that is required to reverse negative public sentiments toward migration. Large investors and governments can look for opportunities to partner with community investors in order to deploy investment capital for migrant integration more effectively and to maximize the potential of these investments to shape a more positive public narrative on migration.