This EU-backed report fails to tackle our demographic ills

The migrant crisis of 2015/16 that shocked many Europeans should by now have produced a clear EU policy response, yet a new report from Brussels further muddies the waters.

The study – ‘Demographic Scenarios for the EU: Migration, Population and Education’ – is published under the aegis of the European Commission and authored by a Vienna-based team. Its thrust is that policymakers should abandon ideas that young immigrants will make up for dwindling workforces and help pay for the rising costs of ageing.   

Behind the report’s welter of guesstimates is the underlying message that migrants from Africa and the Arab world should not be looked to as a solution to EU countries’ labour shortages.

Several scenarios juggle with different migratory pressures, so it’s hard to pin down the study’s conclusions. But these appear to be that migrants rarely make much of an economic contribution until they’ve been in Europe for a decade. And that digitisation and an increase in the numbers of women at work can compensate for ageing Europe’s rising tide of retirements.

As the author of a forthcoming book entitled “More Migrants, Please!”, I read the report from Austria’s International Institute for Applied Systems Analysis with mounting concern. Its reassurances that Europe’s growing manpower problems and shrinking tax bases won’t require substantial transfusions of new blood from beyond the Mediterranean are ill-founded.

Europe needs immigrants because the ratio of working age people to pensioners will within 25 years halve from 4:1 to 2:1. The African and Arab populations will double by then, so higher walls for a ‘Fortress Europe’ will prove useless. Only a revolutionary rethink of how we view and treat migrants can avert devastating social and political disruption.

Newcomers to Europe will not be a cost but an investment. Building extra housing, schools and hospitals may look daunting, but constitute a Keynesian pump-priming boost that will revitalise the sluggish European economy.

The Vienna report’s assertion that less qualified migrant labour will generally fail to add value isn’t widely shared. Germany’s respected DIW institute reckoned the cost of the 2015/16 influx of over a million refugees and economic migrants there at some €10bn, but foresaw an economic boost within five to ten years. McKinsey’s analysis is that by 2025 their economic contribution will be €65bn a year.        

Integrating tens of millions who don’t share Europeans’ cultures, religions and social mores is going to be tough. As well as fitting newcomers into a fast-moving labour market there are the problems linked to the preponderance of unmarried young males. Nobody should minimise the flexible and imaginative approaches needed to cope with immigration.

So far, many political leaders across Europe have responded by pretending that the migrant crisis is over, and that any future surges will be contained by border management. The Vienna report tends to underpin such unrealistic thinking, with some of its scenarios suggesting that employing more women and automating more jobs will avoid the need to import more workers.

Intra-EU labour mobility, the report notes, is helping to overcome some countries’ labour shortages. Yet this is aggravating the demographic problems of the EU’s newcomer member states and further strengthening the case for more immigrants.

Since the 1989 fall of the Berlin Wall, the 11 formerly communist countries have seen their combined populations drop from 111m to 103m because of the outflow of jobseekers to richer parts of the EU. Their birth rates have also plummeted by a third, so the Baltic states have lost over a quarter of their populations and Romania expects a drop of almost a third by 2060.

The message these figures should be sending is that demographic shifts in the EU represent the greatest crisis of all. The European Commission should be hammering home the message that although immigration is politically toxic, member states can no longer ignore our growing manpower shortages.