Migration and their effect in Cypriot economy

Migration has a misconceived interpretation in economies and the last years the effort of its restriction through stricter actions, becomes more intense. If migration isn’t harmful and if it is beneficial, then why is there a negative reputation around it?

The truth is that the nationalist element sometimes creates a negative effect on the idea of migration but it’s not just that. One of the most serious problems is mainly behavior. Basically, migration can interact to an economy in two ways. It can create more competition in particular fields that tends to reduce the salaries.  This can reduce the living standard of  local people who are preoccupied with the affected fields. On the other hand, the cheaper workforce interacts as a technological development in the country, since the economy produces the same product with less cost. This keeps the living cost of the economy, low.

Which of the two opposite effects is larger? The important thing is that migration doesn’t happen randomly. The selection of a country and the movement is targeted. Immigrants move to a country which is in search for their services. This means that the interaction to the salaries and the displacement of the local people from particular fields is small. On the other hand, the increase of production is usually very beneficial.

For Cyprus, the last decades the increase of productivity was null. How can technology reduce the cost of the touristic product?  If cooks and waiters aren’t replaced with machines, it is hard for technology to reduce the cost rapidly. The important reduce came to Cyprus from the exploitation of the immigrants who have increased productivity. In a more simple way, in Cyprus, “souvla” is accessible because the one who takes care of the animals is an immigrant, the workers in the slaughterhouse are immigrants, the cook and the carrier are immigrants and the middle class Cypriot can consume cheaper products.

There are definitely examples of local people who are affected by the migration and here is the problem. Usually, if we can imagine something, we consider it much worse than something that could be more painful but more indefinite (availability cascade by Kuran and Sunstein 1999). The image of a local  losing his job and probably his  house, with his children to be afraid for their future, is a bad image that easily comes to our minds when we hear for migration and the ’’stealing of jobs’’ from  foreigners. This image, though, is easily connected with immigrants but when we consume the traditional souvla, none of us associates its cost with the immigrants. The image of the poverty stricken local man is very strong.

Someone could say that. After crisis, when many Cypriots were forced to look for jobs that traditionally were done by immigrants, the displacement of the local people from foreigners hasn’t been worsen? Look at the graph below where the blue shows the migration in Cyprus and the red one the migration of Cypriots to other countries. After the crisis, the advent of foreigners has stopped so the hypothetical problem is solved on its own and it is as we have described it. Immigrants do not move randomly, but targeted where there are necessary as every production factor.

The most important thing is the movement of Cypriots to other countries, which is increased after crisis. It is at least ironic to stand against migrations to Cyprus the same time that when a problem appears we are willing to move to countries with more working opportunities.