What We Can Learn from the Immigration Policies of a Tiny, Tropical Entity

By David North on November 27, 2016

Let's for a moment turn our eyes away from the messy, convoluted, and massive questions of immigration policy that face the new administration by thinking about how some of these policies are handled in a tiny, quasi-nation in the South Pacific. No matter how large or small, all jurisdictions must have an immigration policy.

The place I have in mind is one that not many people can find on a map: It is the Cook Islands, a scattering of islands about halfway between American Samoa and Tahiti in the South Pacific, named for the explorer, Captain Cook.

It is a former British colony and currently a self-governing territory under the wing of New Zealand. It has, if this is helpful, roughly the same kind of relationship to that country as the Marshall Islands does to the United States. A century ago it would have been called a protectorate.

The population, with the exception of a few expatriates, is Polynesian. There are few natural resources that would interest capitalists, except for its tourist attractions. Think of a smaller version of Samoa, with a population of about 10,900.

The basic immigration policies of the islands are very restrictive; there is no desire to become another multi-ethnic place like Hawaii. On the other hand, there is an interest in tourist dollars, and to get tourist dollars you need someone to wait on and work with the tourists. The indigenous population is neither very large nor very interested in this sort of activity. The answer, as in Switzerland, is to have a temporary alien work force.

But what are the rules for these workers? Some of the rules make our own policies look positively generous. We do, after all, allow some of our temporary workers to stay for many years, and we let some of them become permanent residents and even, years later, citizens.

There are no such policies in the Cooks. Guestworkers are limited to two-year stays and then they must leave.

On the other hand, and this may be the benevolent Kiwi influence, there has been, for about 20 years, a superannuation system (like our Social Security) that applies to citizens and guestworkers alike.

It is on this last point, the treatment of guestworkers by the nation's retirement system, that we find that the poverty-stricken, tiny Cook Islands treats its guestworkers much, much better than the big rich United States does.

This finding emerged from one of my hobbies, the recreational reading of the decisions of London's Law Lords. More formally, it is the Judicial Committee of the Privy Council and it serves as the supreme court for current and former British colonies around the world, all islands with the single exception of the peninsular Gibraltar. The judges involved do this on a part-time basis; they are also members of Great Britain's Supreme Court. The Cooks' government currently, as New Zealand's once did, uses the Law Lords as their ultimate court.

That's the setting. The case before the Law Lords, brought as an appeal of a ruling from the Court of Appeal of the Cook Islands, is named Arorangi Timberland Limited and others (Appellants) v Minister of the Cook Islands National Superannuation Fund (Respondent).

The appellants, apparently Cook Islands employers, sued on two grounds: First, that the islands' pension system is unconstitutional because it violates a "taking" clause of the islands' constitution, and secondly that the system gave unfair advantages to temporary foreign workers, as opposed to indigenous workers.

On the first point, the Law Lords acknowledged that while in the past Cook Islands ministers had stolen public funds (this was more gently worded in the decision) it was appropriate for the government to set up a pension system and that in this case the management of it had been given to a highly regarded trustee in New Zealand. This is a little like our Congress throwing up its hands, and giving the administration of our Social Security system to some well regarded Swiss bank.

On the second point, the one that relates to U.S. migration policies, there was a complaint from the employers that foreign workers were allowed to withdraw their contributions to the scheme once they left the islands. The employers wanted those moneys to stay in the Cooks (or in New Zealand) until the one-time foreign workers had reached retirement age. The Cooks system allowed the departing foreign workers to withdraw their contributions, but did not make a comparable arrangement available to indigenous workers.

The judges, once they got their hands on the situation, took the process a step further and said that not only should the foreign workers be allowed to get their own contributions back, they should also receive the contributions made in their names by the employers. That must have surprised the employer community in the Cooks — it certainly surprised me.

In contrast a guestworker in the United States, say an H-1B admitted on a three-year visa, is covered by Social Security taxes during this period. If that worker leaves at the end of three years he or she not only cannot withdraw his or her Social Security contributions (much less the employer's), but with only three years in the system has no future rights to file for retirement benefits, which usually require ten years of coverage. That H-1B worker, and his or her employer, has simply made a contribution to the Social Security trust fund that will ultimately benefit other workers, but not the one that made the contribution.

All of this indicates that there are other models out there as nations and (in this case) a quasi-nation, work through their own migration and social insurance policies in different ways.

The Law Lords' decisions are always made in the form of advice to Her Majesty, nominally the ultimate decider. (British monarchs for centuries have always accepted the recommendations.) The full text of this one can be seen here.

Topics: Guestworkers