Commodification, Informality and International Migration

Commodification has social meaning and social impact. It is also impacted by socio-political forces. Commodification can refer to a transformation of entire societies or cultures, a specific exchange between two people, or can even refer to the changes in the perceptions of a single person. From a business perspective, commodification refers to the way products in a market become largely undifferentiated (except by price). From a Marxist perspective, as it is often called, commodification refers to changes that take place under a capitalist system that alienate people from their humanizing traits associated with their intrinsic worth.

Informality often refers to the way people operate outside of the bounds of laws and regulations. Informality has been described historically as something that is undesirable and must be fixed. However, increasingly, some scholars contend that informality fills a need that cannot (or will not) otherwise be filled. Informality can be a case of “entrance” in which individuals, businesses or families choose to operate under a system of informality to increase their benefits and decrease their costs. It can also be a case of “exit” in which people, families and businesses are systemically forced out of formal systems often through interpersonal, systematic or institutional discrimination. These also choose to leave a system of formality because the (potential) benefits of formality do not outweigh the (potential) costs. But what is more than that is that in many cases, informality appears to be the only choice available to certain marginalized individuals in a society. The extreme poor are especially unable to survive under formal systems. For the extreme poor, obtaining a business license to conduct micro-business activities is prohibitive because those business activities often produce just enough money for survival.

Migrants are a group that often feel low status in society, and often are unfamiliar with policies and procedures involved in starting a business. This is evidenced in the way migrants often establish their businesses through social connections with earlier migrants or others in their ethnic group. They often depend on those who have gone before in order to know how to navigate the policies and procedures involved in starting a business.

At the intersection of these three bodies of literature is a fascinating opportunity to better uncover experiences in what have been termed “ethnic economies”. So often, informality comes about as a result of the state’s failure to attend to certain marginalized groups. Unable to have their needs attended to by the state, many turn to informality. Such is the case with slums throughout the world. The state looks the other way as millions of their population live in subaltern conditions. As slums and other kinds of informality spring up throughout the world, commodification often seems to be at the center of it. Whatever the cause, governments are rarely turning their backs on the wealthy elites of society, but on those with less “market value”. Additionally, market policies and procedures such as free trade, outsourcing and off-shoring can take opportunities away from the poor and destitute within a country. In short, there are several implications for the way commodification as a process, justifies the state’s inattention to the destitute within its own boundaries. Additionally, informality intersects with migration, as many migrants are marginalized in their host societies. Migrants need not be the most poor and depraved of society as they are often portrayed. Many high-skilled migrants are quite the opposite. However, it is the case that many migrants (if not the majority) are refugees, low-skilled, less educated or are victims of discrimination or other undesirable situations in the home country. In the language of migration literature, many (perhaps the majority of) migrants migrate in response to push rather than pull factors.

As a result, there are many migrants that enter a new country with lower income, less education, and with less confidence. Migrants often feel low status in their new countries (Gold 2010). While the opportunities to such migrants are varied based on each circumstance and the specific countries involved, migrants are often involved in informality. Informality provides a way to survive for those who are in just the situation described above: low education, low income, and low social status. As mentioned above, many migrants have strong social networks and are also very determined and hardworking (John FC Turner in Weinstein 2014). As a whole, they are also healthier than their native counterparts. All of these things point to rich opportunities in informal sectors where opportunity is available to those who do not understand or are unable to navigate complex processes, policies and procedures; who cannot afford to do so; or who are unable to do so because of interpersonal or systemic discrimination. Informality does not require the ability to do so because it occurs outside of official policies, procedures, laws and regulations.

While informality provides many opportunities to many migrants, it is not completely beneficial to them. Informality provides opportunity due to the lack of government oversight but also deprives those operating thereunder. Many government policies are restrictive (and asymmetrically so toward underprivileged groups) but government policies also attempt to ensure safety, healthier environments, crime control, social equality and other things that are often seen as desirable for the human condition.

Outside of government auspices of formality, many marginalized and underprivileged groups (including many migrants) find opportunity to survive, but also find themselves left on their own regarding many services that are often best left to the state such as military and police protection, healthcare, safety regulations and civil rights legislation.