Economic crisis and the limits of the dual frame of reference

Many first-generation migrant workers put up with salary cutbacks and reductions in working hours, underemployment and unemployment in part because, as Binford (2009) claims, following Waldinger and Lichter (2003), migrants use a dual reference structure, to compare the salaries and working conditions in destination countries with the much lower income and poorer livelihood conditions of the majority of families in their origin countries. Canterbury (2012, p. 50) argues that “the tyranny of the exchange rate” operates in the capitalist system in these cases. With the relatively high exchange rate of the US dollar in peripheral countries, migrants from these countries can have a real or illusory feeling that they earn more than they would working in their own countries.¹

Why does this “dual structure” continue to operate during periods of weak economic growth? In reference to our case study, what happens when the US economy experiences a recession, accompanied by layoffs, reduced working hours and cutbacks in pensions and welfare programs? Canterbury’s analysis (2012) of migration to the United States from 2000 to 2009, and particularly during the Great Recession (2007-2009), offers insights to debate the reach of neoclassical and neoliberal theories in migration and return. They allow us to explain why, despite the last crisis, an important proportion of the immigrants that we studied stayed in the United States.

Under these circumstances, politics and political factors tend to take a predominant role in the reduction of migration in countries with a high level of concentration of capital. On the one hand, the intervention of elites of the dominant classes argue for restrictive measures and the contention of migration, while another sector of capitalists—linked to the construction sector, services and agribusiness—employ immigrant labor, offering low salaries to reduce the costs of production in order to stimulate the economy and lift it out of crisis. The characteristics of the US economy, Canterbury argues, reveal that the crisis is embedded in the deep structure of US capitalism. It is not a cyclical, exceptional or temporary phenomenon, subject to a dynamic that can be reversed and restore lost jobs, impoverished homes, livelihoods and former working conditions.

We subscribe to Canterbury’s central argument that it is the level of capital accumulation in a country and not the economic growth in the previous period that is important to people when they make decisions about migrating, staying there or returning to their countries of origin, even when the destination country suffers an economic crisis. With a high level of capital accumulation, a country can sustain an elevated standard of living with respect to other countries, independently of being in an economic and financial crisis (2012, p. 47). Although the economic crisis can be severe, in countries that expel labor and those that absorb it, the high level of capital accumulation in the latter countries continues to provide more opportunities to poor immigrants. Canterbury points out that workers can lose their jobs in both places, but compared with origin countries, the net social security can be much more solid and better buffer unemployment in destination countries. In our study, we verified the relevance of this explanation when analyzing the selectivity of return migration.