As we all know, we are living in an ageing world. What is also true is that for many nations their birth rate is falling. In Europe and Asia there has been an interesting phenomenon happening – the proportion of people over the age of 60 is increasing at the same time birth rates are decreasing. Japan is currently living this reality so it is not about ‘if’ this happens, its is ‘when’. Click here to read more about Japan’s “hyper-ageing society.”
How can countries afford to support their older populations if there isn’t enough working aged people? One plan is immigration.
Sutera, a small medieval town outside of Sicily, population has fallen dramatically in the last 40 years, and will theoretically go to zero in a decade or two as deaths greatly outnumber births and jobs vanish forcing the few young people to flee to the big Italian and northern European cities. Sutera found a solution of sorts that would take the twin difficulties hammering Sicily – rapid depopulation and the mass influx of refugees – and turn them into an opportunity. It did so by offering free houses to European visitors who fancied holiday homes in Sicily (as long as the property taxes were paid) and about 50 migrants from Somalia, Nigeria and elsewhere in sub-Saharan Africa.
Lorenzo Tondo, a Sicilian journalist who has in-laws in Sutera, says the new arrivals are working in farming, doing construction, teaching English to the locals and opening services, such a barber shops, delivering a little jolt to the moribund local economy. “Sutera is a great example of integration,” he says. “The Italians have accepted them and go out with them at night.” Sutera’s migrant experiment says a lot about the economic, demographic and retirement challenges facing greater Europe. While the global population is still growing, Europe is the only continent whose numbers are expected to shrink by 2050.
Could this work on a larger scale?
Angela Merkel has attracted a lot of criticism, even from her own political allies, for rolling out the welcome mat to a million or more refugees. But she may be doing a big favour for Germany and the “boomers”.
Countries with low birth rates and aging populations, like Germany and Italy, need immigrants. The European Commission’s 2015 Ageing Report predicts that Germany’s population will shrink to about 71 million in 2060 from 81 million in 2013. The country’s dependency ratio – the percentage of those over 65 compared with those in their working years – is forecast to rise to 59 per cent from 32 per cent. That means there will be fewer than two active workers to support every retired German. The trend is clearly unsustainable.
Skeptics say mass immigration will not cure any European country’s demographic and pension problems because the people who arrive from the Middle East and Africa are unskilled or semi-skilled. In the era of robotics, automation and deindustrialization, there are few jobs for them.
“I do not buy the argument that the migrants will not find jobs,” says independent economist George Magnus, the author of The Age of Aging, a book about the demographic shift and how it is changing the global economy. “There are more services jobs now than manufacturing jobs. Look how labour-intensive a supermarket is.” He also notes that migrants tend to be young and entrepreneurial. Since many of them cannot slot easily into brand-name companies, they tend to start their own businesses.
Taking in immigrants is helping to fix moribund towns like Sicily’s Sutera; do you think it could work elsewhere?