The Economics of Migrant Travel on Steamships

TEXT EXCERPT from Business of Transatlantic Migration, chapter 2, pp. 39-48

The shipping of migrants to the United States in the nineteenth and early twentieth centuries amounted to the high-risk core of a high-risk industry...The biggest potential problem facing migrants was that of not being able to find work in America; the most severe threat to shipping company viability was the risk of a sharp fall in migrant passengers during job market slumps.  

Migrant traffic constituted nearly 90 percent of the North Atlantic transport companies' passenger flow and generated half of their total revenues...Business travel and tourist traffic contributed less to revenue and earnings, but were subject to much smaller cyclical fluctuation and conferred greater prestige.

Expatriate migrant workers were over-represented in temporary jobs and cyclical industries...A change of few percent up or down in gross production can tip an economy from expansion into recession. Changes in the rate of transatlantic migration could be many times greater.

Not only were [costs of new vessels] large...operating costs of an oceanic crossing were [also] nearly all fixed once the voyage had been committed to...In shipping, the "production" level affected the quality of the "product"...For the sake of maintaining favorable reputations, North Atlantic passenger lines reduced voyages during recessions, and thus their costs, far less than in proportion to declines in passenger revenues...

Heavy fixed costs and dependency upon migrant traffic mean that the riskiness of the migration endeavor translated almost directly into financial riskiness for the transport lines' stakeholders. Available figures of the major North Atlantic passenger shipping lines show a close correlation [85%] between corporate operating profits and the powerful ebb and flow of immigrant arrivals in America."