Last Hired, First Fired — Financial Forces on Migrant Workers
Last hired, first fired — so is the plight for migrant workers. This certainly was the case during the 2008–2012 global economic crisis where major layoffs often started with the dismissal of temporary workers. Migrant workers who managed to remain employed saw a drastic reduction in pay, hours, and working conditions. Nevertheless, the share of foreign workers continued to grow during this time period. In 2012, there were 25 million foreign workers over the age of 16 in the US labor force, representing a total of just over 16% of the country’s workforce. According to a 2014 Global Employment Trends report issued by ILO, a considerable portion of these foreign workers were relegated to the ranks of unemployment during the last economic crisis, forcing many into becoming working poor or accepting vulnerable employment propositions.
The proportion of people in vulnerable, precarious employment has the potential to affect over 50% of today’s employed population, according to ILO. Migrants tend to be among the people who are hardest hit by economic downturn for many reasons. To start, their labor is often considered a buffer, aimed at maximizing growth and minimizing unemployment. This not only means that they’re the last hired and the first fired, but that their employment relationships are frequently in poorly regulated sectors. Furthermore, in times of economic hardship, foreign and temporary workers are easy scapegoats, becoming targets of xenophobic sentiments and discrimination. This is not only expressed in hostile political discourse, but also in calls for the exclusion of migrants from access to labor markets and protection benefits. The more drastic and deteriorated situations become, makes the reliance on whatever money migrants send to their home countries an even more crucial lifeline for their families as well as local communities.
So how do we properly address migrant workers in a time of crisis? The increasing consensus is that the act of sending and receiving money should be seen as a positive force for economic development, and thus stability for migrants worldwide. For example, efforts to promote and encourage international money transfers in Columbia have paid off, now accounting for 4% of the country’s GDP. These resources directly benefit approximately 3 million Columbians, who in turn, spend 80% of those funds on education, food, rent, and public services. Current policy reviews include how to make these payments easier to send and receive. This is where blockchain can have the power to shine. This technology is promising to provide an innovative solution to the current issues facing migrants in times of global financial crises. Not only can it speed up and simplify cross-border payment processes, it also cuts out many of the traditional middlemen, making it much more affordable. Until recently, the cost of sending and receiving international payments hovered around 5–10% of every transaction. With blockchain, that figure dwindles to less than 1%. Perhaps more importantly, blockchain promises to provide safe, guaranteed, cross-border transactions.
Minority-owned software company Uulala is using blockchain technology to empower not only the unbanked but the millions of migrant and minority workers who lack access to banking. It recently announced it’s launch in Mexico, a country that heavily relies on workers living in the US to send money back home. Almost $25 billion (US dollars) was sent back home in 2016, more than what Mexico currently earns from its oil exports. The company’s mission is simple: to help the citizens of Mexico build their credit and help local businesses generate incremental revenue. Through their peer-to-peer loading locations, a user can load cash into their digital wallet and once the funds are loaded, they can be leveraged to build credit. With Uulala’s banking core technology, mobile app, and partnerships, they’ve set to facilitate and accelerate financial inclusion of the many people of Mexico who may rely on international payments to avoid being caught in the middle of a financial crisis.
If we accept the primary drivers of the 2008 financial crisis to be a mix of lack of transparency, multiplied by a superfluous trust in banks, disrupting the banking industry’s ledgers look like a promising solution for all affected. Maintaining financial security by way of increased transparency of capital flows is one of the key areas where blockchain technology could play its part in avoiding the next big financial disaster. This would also provide a radical answer — one that translates to blockchain’s technology having the capacity to redefine the entire global financial system. Blockchain, therefore, deserves to be supported through the launch of well-tailored projects, such as Uulala, that would benefit not only migrants but working people worldwide.