Cashing in on immigration
For all the squabbling over immigration today, there's no stopping the migrant masses. Business 2.0's Chris Taylor tells you why that's good for business.
SAN FRANCISCO (Business 2.0 Magazine) -- Hear that giant sucking sound in the distance? It's not the roar of American jobs fleeing to developing countries, as Ross Perot famously warned more than a decade ago. It's the clamor of U.S. employers sucking in workers from developing countries to do the jobs we'll all be too old to manage ourselves in the not-too distant future.
As most everyone who pays into Social Security knows, this country (and all others in the developed world) is facing a retirement crisis. It starts this year, as the oldest Baby Boomers - also dubbed the "pig-in-a-python" demographic - hit 60 and decide that playing a round of golf every day beats sitting in a 6 ft. by 6 ft. cube.
Here's the bigger news. Once the developed world goes gray, it's going to stay that way. By 2050, a third of the U.S. population, or 130 million people, will be over the age of 60 (compared to 55 million, or one-fifth the population, today).
Faced with far more retirees than workers, we have two options: up the retirement age to keep workers slogging away until their 80th birthdays; or, let the world's youth do the work while paying our Social Security along the way. In return, we get to spend our golden years drinking Pina Coladas in Palm Beach. Which do you think we'll pick?
Breaking down barriers
It's an easy choice to make. The developing world's population will peak at 7.7 billion in 2050, compared to a mere 1.2 billion in the developed world. What's more, a whopping 6.3 billion of the developing world will be under 60 years old.
This is far more people than the developing economies have jobs for, and so we're talking about generations of disaffected youths in the Global South with nothing better to do than sit around and watch movies about the good life in the Global North. Everybody wins if they aspire to come here instead of wallow in envy.
Don't think the ongoing row over immigration will keep the migrant masses at bay. We'll limit the number of visas for overseas workers. We'll build walls along the border. But no matter what we do, we can't stem the tide of economics. Just ask the residents of Berlin, separated for decades by a wall that couldn't contain capitalism.
The U.S. barricade will come under even greater pressure: The demographic shift projected between now and 2050 promises to be the largest macroeconomic trend in history, resulting in an unprecedented case of supply (cheap labor in the Global South) and demand (the need for cheap labor in the Global North).
Another factor worth considering: Immigration isn't such a big deal for today's youth. Field Poll after Field Poll shows that 18-39 year-olds are consistently and significantly less concerned about illegal immigration than their elders. Their ambivalence makes sense, since they're growing up in an increasingly cosmopolitan world.
Just as newer generations stopped worrying about how many American jobs were taken up by immigrants of Scandinavian or Irish or German origins - all hot-button ethnic issues in the 19th century - by 2050 we'll no longer care if our workers hail from Brazil or Bangladesh or sub-Saharan Africa.
Chasing a golden opportunity
What does this unstoppable migration mean for budding entrepreneurs? Plenty. There's tons of money to be made helping people to move from South to North - and the transfer of wages from North to South. "Remittances," a catchall term for the cash that immigrants send back to their poorer relatives back home - are already playing a major role in the global economy.
According to the World Bank, immigrants in developed countries last year shipped $250 billion back to developing countries - more than twice the amount sent as international aid. Today, one out of every six people get remittances in the world. They flow along all sorts of routes you wouldn't necessarily expect, like the U.K. to Poland and Italy to Kenya and Japan to North Korea. In some Latin American countries, remittances bring in more money than the nation's largest export.
Remittance fees, which are mostly handled by wire services rather than banks, typically run at about 10 percent of the amount sent, which makes them ripe for undercutting by any company that wants to scale up to a global remittance operation. Already, mounting competition has cut the average fee in half since the mid-1990s.
Not only are wire transfers a huge growth business, but so too are phone calls. The more connected the developing world becomes, the more immigrants will be in the market for dirt-cheap modes of communication, whether it be phone calls over the Internet or virtual reality hangouts with avatars controlled by family and friends.
Hungry for home
Finally, immigrants abroad become so nostalgic for food and drink from their home countries that their newfound purchasing power revives dying brands like Mexico's Jarritos soft drink (see "Give me your poor, your tired, your beloved products," from the October 2005 issue of Business 2.0). Importing brand-name products from around the world into niche immigrant communities in the U.S. is already big business; it's only going to get bigger.
That giant sucking sound heralds not only a major change in the American workplace, but also an incredible opportunity.
Correction: An earlier version of this story incorrectly stated that 6.3 billion people in the developed world will be under the age of 60 come 2050. Business 2.0 regrets the error.To send a letter to the editor about this story, click here.