Europe has to face the inevitable effect of the extra-large baby boom generation hitting retirement age and stepping away from the work force.
For many years, economists from Europe and America have spoken of Japan and Western Europe as places where the slow grind of demographic change — masses of workers reaching retirement age, and smaller generations replacing them — has been a major drag on the economy.
Many employees who were to expensive because of their seniority were made redundant, recruiting cheaper young talent. Often a lot of talent was put through the drain by getting rid of the older workers.
Lots of people may be against the fact that immigrants bolster the labour force, but in many regions, like on the agricultural land and fruit-growing regions of Great Britain and Belgium, such people are needed because nobody of the local population want to do such a job.
The population of different places has always been fluctuating, and economists have traditionally viewed that as a mostly healthy process. Throughout the ages we can see that often lots of people thought work would be easier available in cities. Also today in economically booming countries we can see that workers made their way to where they would be of the most use, the most productive, enabling the overall economy to adapt and grow.
But people who study regional economies are increasingly concerned that some aspects of this wave of demographic change make the pain more severe for places left behind — which can get stuck in a vicious cycle. America is a magnificent example. A shrinking supply of working-age people can prompt employers to look elsewhere to expand, making it harder for local governments to raise enough taxes to pay for infrastructure and education, and encouraging those younger people who remain to head elsewhere for more opportunity. It raises the possibility that, if unchecked, these demographic trends might not merely reduce overall national growth rates in the decades ahead. They could also cause the left-behind cities to hit a point of no return that undermines the long-term economic potential of huge swaths like we can find in the United States. There we can find several ghost towns or derelict cities which were once blooming, but now empty abandoned and only populated with poor people finding themselves in places where drugs and crime have found their way and determine the cityscape.
Many may not like immigrants entering our regions. But they should come to see that perhaps those refugees and people looking for a better life in our country, might be the solution for a regeneration of our economy.
We can use an immigration policy that would stop the vicious cycle. Not according the Scandinavian model (see my previous posts) but giving them good prospects by offering them also reasonable wages and not using them as slaves.
It would not be bad that visas could be made available to skilled immigrants on the condition they go to one of the areas struggling with demographic decline. In places where people from our welfare state do not want to take up the necessary work in those abandoned regions, immigrants could be attracted to nestle there. At such places where there was chemical-, car- and/or agricultural industry such people from outside should be able to create growth in the working-age population in those places, increasing the tax base and the demand for housing, and giving businesses reason to invest.
Given hostility to immigration in large segments of the country, places should be able to elect whether to make visas available to immigrants as part of an economic development strategy. It would have to be a “dual opt-in” approach in which both the community decides it wants more immigration, and individual immigrants elect to move there.
In France we can find lots of places where there does not seem to be any life any more. The stores have been abandoned and do not form an inviting image to visit such a place. When we would allow immigrants move to such abandoned cities, this could be helpful in holding the population steady after a long pattern of losses.
In Western Europe we urgently need programs to provide a new workforce to replace the retired baby boomers. Combined with a low cost of living and investment in community colleges to create qualified workers, the intake of immigrants can give smaller cities the means to break out of demographic ruts.