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Polish remittance during the recession

The effects of the recession on to the UK migrant population

           The answer to the question ‘Did the remittance flow decrease during the Recession?’ would seem to be an obvious one. There is no doubt that the recession in 2008 affected the migration flow worldwide, in one way or another. A report commissioned by the BBC World Services shortly after the global recessions onset revealed that the economic situation had affected the level of immigration, as fewer people were moving abroad in search of work. At the same time, the majority of migrants already working abroad were not returning to their home country even though there was a considerable risk that they could lose their jobs. Inevitably the uncertainty and fear of unemployment lowered the levels of remittances sent by migrants to their home countries, but how much did the recession really affect the remittance market? And how much was a UK immigration influenced by that in the following years?

Countries hit by the recession 

Many Central and Eastern European migrants working in the UK  returned to their home countries, while the WRS (Work Registration Scheme) stated that the volume of new arrivals from the A8 countries (the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia and Slovenia, who all joined the EU in 2004) had declined during the recession. Despite these declines in the levels of immigration, the inflow of Central and Eastern European migrants was still substantial, with around 30,000 per quarter during the time of the recession.  Moreover, in the following year over 118,000 immigrants from across the world arrived in the UK, which exceeded the number of migrants leaving in 2008, therefore allowing Britain to retain its ‘cheap’ work force. 

Polish immigration is probably the most obvious example : there has been an increase in the Polish migrant flow from 95,000 in 2004 to 550,000 in 2010 (according to the Migration Watch). This data shows that after an initial hit to the immigration flow, the recession did not pose any significant influence. This initial decline in immigration to the UK could have come from fears of unemployment and overly dramatized media coverage. However these ‘fears’ were soon outlived by the realization that it is possible to earn four times as much money in Britain than in their homeland, even if paid just minimum wage.  The seeming ‘disregard’ for the recession appears to be a trend only for the Central and Eastern European citizens (which have been a noteworthy minority in Great Britain, but still and ‘immigration minority’ as in 2007 only one in four foreign born workers in the UK was from the A8 countries). In contrast, the number of non-European migrant workers halved between 2004 and 2010, partly because of the economic downfall and the restrictions imposed by a government that was faced with an increase in eastern European immigration. 

Cuts for immigration flows

The economic crisis resulted in the loss of millions of jobs in some of the more affluent countries, making these governments particularly squeamish regarding the impact of immigration on the countries demand for indigenous labour. Immigration has always been the easiest target to blame for a lack of jobs for indigenous people. Now that the UK population is facing a double dip recession, is the same pattern going to repeat itself again? And if the immigration flow was to stop, what would happen to these countries whose economy is kept alive from remitted money? 

Immigration is one of the rare cases where loss is a beneficial thing: ironically it is a blessing for the countries that “send away” their inhabitants, even though they will lose their taxpayers at the same time. For the receiving countries such as the UK on the other hand, the flow of immigrants into the country often represents a huge problem (for example job losses as mentioned above) which they tend to solve radically and efficiently. But their bouts do not always meet with success and the immigration phenomenon does not conform too well as we can see just in the case of Britain: despite of the Government´s effort to significantly cut the immigration flow into the country, net migration rose in the first year following the election. Moreover, the cuts are hitting the European Union as Brussels bureaucrats are demanding that the UK open its depressed jobs market to millions of Romanian and Bulgarian workers and Britain has been threatened with legal action and a fine from Brussels over claims that restrictions on immigration break European law. Therefore, the UK can´t close its gates, even though it would like to. With the onset of the double dip recession and the possible outcome that this could decrease British immigration, it might come out of it with a clean slate in the end: it is likely that the immigration flow will cut down naturally and that the UK will therefore ‘have one´s cake and eat it too.’

In conclusion we can say that the remittance flow between the UK and the rest of the world is inevitably going to decrease, however it will always be present in a substantial manner. The world economy depends on the development of the EU and just as we can see with the continuous bailouts, Remittance money is one of the keys to keeping this Union alive.