Outsourcing and immigration: how have demographics transformed the global economy?
At current birth rates, only a handful of developed countries will prevent their populations from declining significantly over the course of the 21st century. In the European Union, for example, no member country has a fertility rate that ensures a growing population for decades to come.
In some countries, populations are declining drastically. In Russia, for example, the average life expectancy of Russian men has fallen below sixty years and birth rates have reached record lows. Russia’s 90 million-member workforce is estimated to shrink by 15 million by 2020, mainly due to heart disease, smoking and binge drinking, which has caused more than a million deaths a year, mostly among workers. old men. At the beginning of the 21st century, the probability that an eighteen-year-old Russian would survive to retirement age was only 50 percent.
According to the World Health Organization, the mortality rate for Russians of working age, mainly due to chronic diseases such as heart disease, stroke and diabetes, is more than 1 percent per year, a rate much higher than any other world country. economy, including relatively poor countries such as Tanzania, Nigeria and Pakistan.
In Japan, a fertility rate of less than 1.3 has also created a demographic time bomb. Over the next several decades, the Japanese population is expected to shrink at a rate never seen in any developed country during peacetime. The percentage of elderly, age sixty-five and older, has increased from less than 5 percent after the end of World War II to more than 20 percent at the beginning of the 21st century, and an estimated 40 percent for the year 2050.
In Italy, Germany, Spain, Hungary and many other countries in southern and central Europe, the story is the same. Despite generous welfare payments to promote childbirth, no country in Europe has a fertility rate higher than 2.0. Among developed nations, only the United States has a significantly increasing population, mainly due to immigration. In fact, without immigration, no country in the developed world will be able to fill the jobs needed to keep their economies strong and healthy.
It has been estimated that the United States needs to bring in more than ten million immigrants per year just to keep the ratio of workers to retirees constant. Essentially, in the rich countries of the world, millions of well-paying jobs will go unfilled over the next several decades, and without immigration, no one will be available to fill them. Therefore, the influence of immigrants on the economic growth of host countries can be substantial. In the American Midwest, for example, immigrants have revitalized many stagnant cities and rural areas. It has been estimated that 40 percent of the growth in home ownership in the US during the early years of the 21st century was due to purchases by immigrants.
Contrary to popular belief, immigrants generally do not pose a large burden on the economies of their host countries. And in many cases, unskilled immigrants help the economy by doing jobs that most people in rich industrialized countries refuse to do. An eighteen-year-old British university student may not think it’s “in” to work in a nursing home, but for someone from Africa or South Asia, going to London to work, even in a nursing home, could be a good idea. A dream come true. In the United States, immigrants also provide an increasingly important source of educated labor. The H1B visa program, among others, provides immigration visas to highly skilled and educated foreign workers. According to Microsoft founder Bill Gates, America’s high-tech leadership would be “severely affected” without a steady stream of talented science, technology, engineering and math graduates from abroad.
Immigration has contributed significantly to economic growth in almost every country where it occurs, primarily because the vast majority of immigrants move to their host country for one purpose: to work. In Spain, for example, the arrival of more than three million immigrants, mostly from Spanish-speaking countries in Latin America, has contributed billions of dollars to Spain’s economic growth, allowing it to outperform almost all other European countries. during the early years of the 21st century. Since many of these immigrants worked as nannies and maids, many Spaniards were able to leave home and rejoin the workforce, significantly reducing unemployment.
Switzerland, which for decades has allowed foreign workers to come and work for nine-month periods, has benefited greatly from the availability of a workforce willing to do work most Swiss would avoid. Although it refused entry to the European Union, Switzerland has signed several bilateral agreements with EU members during the early years of the 21st century, allowing it to join the free-flowing EU labor market, eventually including workers from the top ten. new member nations for the east. Some countries, such as Great Britain and Ireland, have based much of their economic growth on the availability of new labor forces, coming mainly from Poland and other Central and Eastern European countries.
The vast pool of labor available in the developing world has only just begun to be tapped. Like the great migrations from Ireland in the 1850s and Italy in the 1880s, large numbers of semi-skilled and low-skilled workers in countries around the world are moving to better-paying jobs far from home. The question is how to reconcile political pressures to limit the number of immigrants with the economic pressures of jobs becoming vacant in major industries due to a lack of qualified personnel.
