EU long-term challenges on immigration and refugees (Part 1 of 3)

The European Union’s immigration situation faces two major problems, both now and for the foreseeable future.

One is that the EU needs more people. And that applies to most if not all member countries, not just to less wealthy ones like Hungary and Rumania, whose populations have been shrinking due to emigration of younger native-born people.

The other is that Europe’s near neighbors to the south have experienced nearly two decades of war and instability, with no near end in sight: the Middle East and North Africa, and Afghanistan as well, from which refugees make their way towards the EU countries.

In light of the 2015-6 refugee crisis (or acute phase of a much longer crisis), two major policies are needed: systematic recruitment and admission of immigrants for jobs currently going unfilled, whether the shortage is due to lack of skilled workers or because the jobs are so unpleasant they can’t get enough workers for them: and, a plan for fair sharing of refugees among all EU countries at an early stage, not only after asylum has been granted.

Immigration policies can be very complex. But the EU needs both those sets of policies and doesn’t have them now.

It’s a worldwide phenomenon that as countries become wealthier and more urbanized and decent health care becomes more available, the birth rate goes down. The replacement rate, the fertility rate at which the population will remain stable in numbers from one generation to the next, is generally taken to be 2.1 children per woman.

According to Wikipedia (List of sovereign states and dependencies by total fertility rate 01/23/2020), the EU member states have the following fertility rates, rounded to one decimal point:

Austria 1.5
Belgium 1.8
Bulgaria 1.6
Croatia 1.4
Cyprus 1.3
Czechia 1.6 (Visegrad Group)
Denmark 1.8
Estonia 1.6
Finland 1.8
France 1.9
Germany 1.5
Greece 1.4
Hungary 1.5 (Visegrad Group)
Ireland 2.0
Italy 1.3
Latvia 1.5
Lithuania 1.6
Luxembourg 1.6
Malta 1.5
Netherlands 1.8
Poland 1.3 (Visegrad Group)
Portugal 1.4
Romania 1.4
Slovakia 1.6 (Visegrad Group)
Slovenia 1.6
Spain 1.5
Sweden 1.8
UK 1.7

All of them are below the replacement fertility rate of 2.1.

I’ve flagged the Visegrad states, which have been particularly insistent on keeping refugees out of the EU. Visegrad Group member Poland is tied with tiny Cyprus as having the lowest. We should note here that the fertility rate won’t match one-to-one with national wealth measures. But all EU countries are already past the point where the fertility rate has dropped below 2.1.

Fertility rates below the replacement rate mean that over the coming decades, their populations will shrink. This is often discussed in the news in terms of how an aging population presents new challenges for country’s health care and government social insurance.

But it’s also generally assumed that a shrinking population is a danger to economic growth.

Scott Lanman writes (A World With Fewer Babies Spells Economic Trouble Bloomberg Businessweek 09/14/2018:

Forget the prophecies saying overpopulation will starve the planet. The human race is approaching the point where it’s no longer reproducing enough to expand the global headcount. In the world’s biggest economies -- the U.S., China, Japan and Germany -- it’s already happening or will soon. Economists say these countries could see slower economic growth unless they increase their working-age populations by accepting immigrants, possibly from regions with higher fertility rates, like parts of Asia and Africa. Lower fertility rates -- the number of live births per woman -- could also threaten safety-net programs like pensions and health care. [my emphasis]

In the US and Europe, the only reason it would threaten “safety-net programs” is if governments are unwilling to tax the wealth at a reasonable rate. But until those countries transition to a green economy in which economic prosperity is not linked to a growing population fueling growing consumption, a growing population is needed.

It was interesting to hear what Austrian Chancellor Sebastian “Basti” Kurz (ÖVP) himself recently said at the Davos World Economic Forum (A Conversation with Sebastian Kurz, Federal Chancellor of Austria 24.01.2020):

I recently had a discussion in which it was philosophized about how the post-growth society, and, can it [it] actually be good for a country when there is no more economic growth and if, yes, we still are satisfied, and would it not be even better in any case to measure the satisfaction of the population and not economic growth.

So, that all always sounds so beautiful and so romantic. I can only say that in Europe we have some of the oldest societies in the world. I think Germany has the second oldest society after Japan.

So, satisfaction doesn’t pay any pensions, okay? If we do not have growth, if we do not succeed in remaining economically competitive, that is, the European Union, because then its also Good Night welfare state and Good Night European achievements. (after 25:20 in the video)

The relation of birth and fertility rates has been studied in the context of Malthusian claims that low growth in poor countries is caused to a large if not near-exclusive extent by high population growth. This notion has been effectively refuted for, oh, the last two centuries. But it is still remarkably persistence because it is an effective distraction from maldistribution of world income and massive exploitation of poor countries by wealthier ones.

The European far right recognizes the decline of the population but try to use it as a justification for their racist, anti-Semitic “great replacement” theory. Europe’s current model authoritarian Viktor Orban is trying to promote a higher birth rate, framing in racist-nationalistic terms (Hungary to provide free fertility treatment to boost population BBC News 01/10/2020):

Hungary will provide free in-vitro fertilisation (IVF) treatment to couples at state-run clinics, Prime Minister Viktor Orbán has announced.

He said fertility was of "strategic importance". Last month his government took over Hungary's fertility clinics.

Mr Orban, a right-wing nationalist, has long advocated a "procreation over immigration" approach to deal with demographic decline.

The country's population has been falling steadily for four decades.

See also: Nora Shenouda, Ungarn setzt auf staatliche "Babyfabriken" Euronews 15.01.2020.

The idea that Hungary will get from a fertility rate of 1,5 to 2,1 or higher in any foreseeable future is nonsense. It would take forcing women out of the workforce and into a real Handmaid’s Tale kind of society in which women were basically only allowed to breed and raise children. And even that probably wouldn’t get it to the replacement rate. (If there is a side benefit of some improvement’s in women’s reproductive health care, that will be a desirable if unintended consequence.)

It’s also important to remember that the relationship between economic growth and declining population isn’t instantaneous. It doesn’t mean that if in 2020, Hungary’s population declines from 2019 that Hungary’s GDP or per capital income will decline from 2019 to 2020. Obviously, business cycles still exist.

And the fact that population decline does not manifest its effects instantly means that it’s difficult to make it a focus of short-term politics. We are seeing dramatically and worldwide now how the difficulty of prioritizing long-term policies against climate change is working out. That is, not well.

In Part 2, I will look specifically at how the new coalition government in Austria is approaching the long-term challenges of the fertility rates and refugees. (Or not doing so.)

Part 1: https://brucemillerca.blogspot.com/2020/01/eu-long-term-challenges-on-immigration.html
Part 2: https://brucemillerca.blogspot.com/2020/02/eu-long-term-challenges-on-immigration.html
Part 3: https://brucemillerca.blogspot.com/2020/02/eu-long-term-challenges-on-immigration_5.html