Guest Post by: Randy Charles Epping
From: eZineArticles

At present birth rates, only a handful of developed countries will avoid seeing their populations decline significantly over the course of the 21st century. In the European Union, for example, not one member country has a fertility rate that ensures a growing population over the next decades.

In some countries, populations are declining drastically. In Russia, for example, the average life expectancy of Russian men has fallen below sixty, and birth rates reached historic lows. It is estimated that Russia’s ninety- million- member workforce will be reduced by fifteen million by the year 2020- due mainly to heart disease, smoking, and rampant alcoholic consumption, which has accounted for over a million deaths a year, primarily among working- age men. At the beginning of the 21st century, the probability of a Russian aged eighteen years surviving until retirement age was only 50 percent.

According to the World Health Organization, the death rate of working- age Russians- mainly due to chronic diseases such as heart disease, strokes, and diabetes- is more than 1 percent per year, a rate much higher than any other country in the world 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 decades, the Japanese population is expected to shrink at a pace unseen in any developed country during peacetime. The percentage of elderly, age sixty- five or over, has risen from less than 5 percent after the end of the Second World War to more than 20 percent by the beginning of the 21st century- and an estimated 40 percent by the year 2050.

In Italy, Germany, Spain, Hungary, and many other countries in Southern and Central Europe, the story is the same. Despite generous social welfare payments to promote childbirth, not one country in Europe has a fertility rate higher than 2.0. Among developed nations, only the United States has a significantly increasing population- due mainly 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 retired people steady. Essentially, in the wealthy countries of the world millions of well- paying jobs will go unfilled over the course of the next decades- and without immigration, there will be no one available to fill them. The influence of immigrants on economic growth in host countries can, therefore, be substantial. In the U.S. Midwest, for example, immigrants have revitalized many stagnating towns and rural areas. It has been estimated that 40 percent of the growth in home ownership in the U.S. during the first years of the 21st century was due to purchases by immigrants.

Contrary to popular belief, immigrants usually do not put much of a burden on their host countries’ economies. And in many cases, unskilled immigrants help the economy by doing the jobs most people in wealthy industrial countries refuse to do. An eighteen- year- old British college student may not think it is “trendy” to work in an old- age home, but for someone from Africa or south Asia, going to London to work, even in a retirement home, could be a dream come true. In the United States, immigrants provide an increasingly important source of educated labor as well. The H1B visa program, among others, provides immigration visas to highly skilled and highly educated foreign workers. According to Microsoft founder Bill Gates, the U.S. lead in high technology would be “seriously disrupted” without a steady flow of talented science, technology, engineering, and math graduates from abroad.

Immigration has significantly contributed 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 outpace almost all other European countries during the first years of the 21st century. Since many of these immigrants worked as nannies and maids, many Spanish nationals were able to leave home and reenter the workforce, reducing unemployment significantly.

Switzerland, which for decades has allowed foreign workers to come and work for nine- month stints, has benefited enormously from the availability of a labor force willing to do work that most Swiss would shun. Even though it refused entry into the European Union, Switzerland has signed several bilateral agreements with EU members during the first years of the 21st century, allowing it to join in the freely flowing EU labor market- eventually including workers from the ten new member nations to 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 the other countries of Central and Eastern Europe.

The vast amount of labor available in the developing world has only begun to be tapped. Like the great migrations from Ireland in the 1850s and Italy in the 1880s, large numbers of semiskilled and low- skilled workers in countries around the world are moving to higher- 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 going unfilled in important industries because of a lack of qualified personnel.

Randy Charles Epping, based in Zurich, Switzerland and Sao Paulo, Brazil, has worked in International Finance for over 25 years, holding management positions in European and American investment banks in London, Geneva, and Zurich. He has a master’s degree in International Relations from Yale University, along with degrees from the University of Notre Dame and the University of Paris-Sorbonne. He is currently the manager of IFS Project Management AG, a Switzerland-based international consulting company. His latest book, The 21st Century Economy, as just been released. For more information, please visit: http://www.fusioneconomics.com