Partner Article

We need migrants

University College London recently released new figures showing that EU migrants contribute £20bn to the UK economy. Whilst this figure could strengthen the argument in favour of free movement of people, it is a mere misdirection and not the key point. Like it or not, with an aging population and very low birth-rates right across Europe, including Great Britain, the continent needs immigrants to keep its economies running.

According to the United Nations population projections, all European countries are expected to decrease in population size over the next 50 years. In addition to this, all of the countries in Europe are going through a rapid ageing process. If we look at Britain’s case, the only way the country could sustain an effective workforce is if every woman produced two children during her lifetime. However, the current reproduction rate is 1.8, therefore the working population (age 15 to 65) is shrinking. If there are not enough people working, there are not enough people paying taxes and the country will fail to keep the economy at efficient levels. There are four solutions to this problem.

The first one is to increase the retirement age. The state pension age is currently 65 for men and 62 for women. The latter will keep steadily rising every few months and equalise at 65 for men and women in 2018. It will then increase every few months, reaching 66 by 2020. The next planned increase, towards age 67, will start in 2026 and conclude in 2028. In a desperate attempt to solve the population crisis, The Isle of Man government is considering raising the state pension age to 74.

However, there are obvious limitations to this and it would only serve as temporary fix rather than a long term solution. And how long can you increase the retirement age to? It might be ok for people working in sedentary, office jobs to work longer but what about working in harder, more physically straining industries? Making people in agriculture or building labour work until late in their lives may not be as viable.

The second option is to increase labour force participation. Statistically, women are underrepresented in the workforce and much more could be done to encourage higher rate employment among women. The government could for example set up affordable childcare facilities, to encourage stay at home mothers to enter the workforce. The Northern European countries are doing a good job in this respect, Scandinavia having the highest female workforce participation rate. Countries across Europe must strive to reach Scandinavian levels.

The third scenario is to increase the birth-rate. The government could incentivise families to have (more) babies by introducing a tax break or child benefits. However, the by-product of this is that you would be taking more women out of the workforce for longer periods of time.

The last and most viable scenario is replacement by migration. Should Britain embrace immigrants, this would offset the decline in the working population size and maintain a robust enough economy to support the rest of its citizens. According to aforementioned projection to do so, Britain needs 2.000 immigrants for every 1 million of its own population. A quick calculation reveals that Britain will need an influx of 150.000 working age migrants in the next 50 years.

Some of the challenges faced by a population crisis will in time be solved by technology. We may not be able to envisage robots looking after our children and elderly now, but researchers see this as a viable solution which may come to realisation in the next few decades. However, in order to sustain the economy, the future must be planned and actions must be taken immediately. Failing to sustain the working population levels will result in less people working therefore production will decline, as will GDP. A population crisis will unavoidably lead to a shrinking economy.

So whether we like it or not, the only solution to our population crisis is immigration. There are a lot of people outside of Britain’s borders who want to come in and work and instead of being afraid of them we should accept the fact that these are the people who could be solving the population crisis.

This was posted in Bdaily's Members' News section by Prof. Ahmet Icduygu, Koc University .