People line up for petrol in Vienna, Austria, on Dec. 14, 1973.Bridgeman Images/Reuters
Randall Hansen is the Canada Research Chair in Global Migration and the director of the Global Migration Lab at the Munk School of Global Affairs & Public Policy at the University of Toronto. His latest book is War, Work & Want: How the OPEC Oil Crisis Caused Mass Migration and Revolution.
As the 2024 World Migration Report reminds us, we live in an age of mass migration. There are at least 280 million international migrants across the globe. For 50 years, the United States has been the world’s premier destination for migrants, and the number of foreign-born in the country has quadrupled: from less than 12 million in 1970 to more than 51 million today. Germany comes in a distant second at 16 million. Canada is the world’s eighth-most popular destination, with 8.3 million immigrants. As a percentage of the national population, Canada hosts more foreign-born people than the U.S.: 23 per cent vs. 15 per cent.
The forcibly displaced are also at a global high: 117 million, including 68 million internally displaced people (who flee to another part of their country), 43 million refugees, and almost seven million asylum seekers.
The majority of international migrants – 169 million – are migrant workers, and most are low-skilled. Since wealthy receiving countries fetishize high-skilled migration and deny their need for low-skilled labour, immigrants use smugglers to reach North America and Europe. Many are trafficked. Thousands die along the way every year: they drown in the Mediterranean, die of thirst in the desert or suffocate in trucks.
Fifty years ago, on the eve of the OPEC oil crisis, no one would have predicted a world addicted to mass migration. Policy-makers did everything they could to restrict immigration. The United States introduced, for the first time in its history, a cap on Latin American migration, and Mexican immigration was at a historic low. The country had, since the 1920s, strictly controlled southern European, Jewish and Asian immigrants. No politician thought the 1965 Immigration Act would mark the start of a new wave. Asylum applications were at a trickle – generally, refugees from Soviet communism who were welcomed in the West because a) they were few and b) they stood as a mark of the West’s moral superiority.
The public supported tight immigration restrictions: American and European public opinion has for decades been resolutely hostile to current levels of immigration. In short, there was to be less, not more, immigration. Yet, it has tripled in absolute terms. Why?
Four horsemen riding through the streets of Amsterdam on a 'motorless day', when cars are prohibited due to the global oil crisis, on Nov. 4, 1973.Keystone/Getty Images
The answer is found on Oct. 17, 1973. On that day, the Organization of Petroleum Exporting Countries (OPEC) announced production restrictions that led to a quadrupling of oil prices within a year. The Arab OPEC member states also announced a complete boycott on oil exports to the U.S., Canada, Japan, the Netherlands and Britain (later extended to Rhodesia, South Africa and Portugal) because of their support for Israel. The oil embargo lasted six months; the price surge lasted a decade.
It changed the global economy forever. The price surge resulted in a permanent halving of economic growth in the U.S. and across the West. We went from a world in which economic growth averaged 5 per cent per year, and often hit six, to one in which it averaged 2.5 per cent. As growth halved, inflation surged, making consumers poorer by the day.
Politicians and commentators responded by defining inflation as a wage problem – the result of greedy unions. With the active collusion of the state, firms destroyed the unions: they outsourced jobs to Asia; they closed unionized companies and reopened them with non-union labour; they moved from the union-friendly Midwest and Northeast to the union-hostile South, and they paid an army of lawyers and management consultants to block organization efforts. In the European Union, where unions remained stronger, firms went around them with the creative use of piecework. A 1996 European Union directive allowed firms to hire workers in any part of the EU, to pay them wages and benefits found in their home country, and to post them in another part of the EU. Romanian workers received Romanian wages to build condos in Paris and Berlin.
Across the West, unionization rates plummeted (from a peak of 35 per cent in the 1950s in the U.S. to 10 per cent today). Working-class wages followed, taking workers’ livelihoods – and sometimes lives – with them.
As wages fell, they reached a point where domestic workers were no longer prepared to accept them. Nationals exited entire sectors by skilling up or leaving the labour market for unemployment and, all too often, alcohol and drug addiction. The “deaths of despair” of white working-class men through alcoholism, drug overdose and suicide are inseparable from the way in which American and global capitalism restructured in the aftermath of the oil crisis. As native-born workers exited multiple sectors, low-skilled, badly paid migrant workers replaced them.
In Asia, the path was different but the destination was the same. As late industrializers, the Four Asian Tigers (Hong Kong, Singapore, South Korea and Taiwan), Malaysia, and Thailand had no golden age of unionization. Rather, they drew on a large supply of cheap rural-to-urban migration that underpinned export-led wealth. When that labour ran out (although city-states such as Hong Kong and Singapore never had it) they turned to migrant labour from nearby countries. Asian wealth, and consumer lifestyles, are every bit as dependent on exploited migrant labour as are those in the West.
In the Middle East, the great rush of oil money had contrasting effects. In oil-poor Egypt and Syria, oil-price-induced inflation wrecked the policy of nurturing domestic industries behind a tariff wall (referred to as “import substitution industrialization”). Under International Monetary Fund, World Bank and American pressure, both states – Egypt in the 1970s, Syria in the 80s – embraced liberal capitalism: privatization, reduced tariffs and expanded foreign investment. As ever with capitalism, wealth was created, showy displays of which were seen in luxury hotels gracing the Nile and in glitzy storefronts on the streets of Damascus. Inequality, compounded by corruption, led to the street protests of the Arab Spring. Syrian president Bashar al-Assad’s brutal crackdown led to another civil war, and the flight of some about million refugees.
The geopolitical effects of OPEC were almost as profound as the economic ones. In Iran, a sudden gush of oil money funded the Shah’s military and his “White Revolution,” a rapid secularization and modernization program. But it also unleashed forces that he struggled to control: the massive expansion of higher education created, on the one hand, frustrated liberals with no outlet for political expression and, on the other, Islamist intellectuals who embraced an until-then rare Shiite political Islam. Rampant inflation and a flood of American expatriate workers who treated Iranians with racist contempt alienated ordinary people, and they allowed the Ayatollah Ruhollah Khomaini to cast himself as the defender of a pure Iranian Islam. The result was the Iranian Revolution.
The Revolution shredded America’s Twin Pillars policy (its alliance with Iran and Saudi Arabia) and unleashed the second oil shock of 1979. In Washington, politicians and officials governing an increasingly oil-import-dependent nation asked if they could get a break; in Moscow, an oil exporter, they cracked open the champagne bottles as they saw their coffers fill with oil money.
But they would soon regret it. The price surge resulted in “petromania” – the delusional belief that politics poses no limits and endless oil revenues will overcome all problems. The sudden rush of oil money convinced Moscow, which until then had hesitated, to invade Afghanistan. Its expectations of a quick victory dashed by mujahideen resistance, the Soviets drenched the countryside – a policy called “migratory genocide” by one contemporary observer – with bullets, bombs and all manner of mines. The aim was to drive civilians into the cities, which it controlled, or out of the country. It worked, and five million refugees fled to Iran and Pakistan. In Pakistani refugee camps, boys who had lost everything were schooled in anti-Shiite and anti-Western hate and misogyny by illiterate mullahs. They became the Taliban, who sheltered Osama bin Laden and enabled his Sept. 11, 2001, attacks on the United States. Those attacks, and American dependence on Middle Eastern oil, resulted in three American-led military assaults on the region: against Iraq in 1990 and 2003, and Afghanistan in 2001. The result was millions of refugees.
By destroying economic growth and reconfiguring the global economy and geopolitics, the OPEC oil crisis set in motion processes that resulted in more than 100 million unexpected, and unwanted, labour migrants. Entire wage-debased sectors – meat processing, agriculture, construction, retail, textiles and garments, and domestic labour – are wholly dependent on badly paid, poorly treated low-skilled migrants. And oil-driven wars – the Soviet invasion of Afghanistan, the Iran-Iraq War, and the two U.S. attacks on Iraq – generated about 15 million refugees. The world is awash in immigrants driven by war, drawn by work and destined to desire our insatiable consumer wants.
There is little evidence that anything will change. The dependence of multiple sectors, of middle-class affluence, and of economies as diverse as those of Germany, Thailand, the United States and Korea on low-skilled migrant labour suggests that, in the absence of a fundamental reform of how low-skilled work is valued and paid, such migration will continue. “Mass immigration,” is not, as economist Sir Paul Collier claims, “a temporary response to an ugly phase in which prosperity has not yet globalized.” Rather, large-scale, low-skilled, badly paid and ill-treated migrants are a structural feature of global capitalism and global politics. They, and the exploitation they suffer, are here to stay.