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Low Fertility and Labor Shortages Might Save the World

February 12, 2013 ·

Migration is one of the best mechanisms for reducing poverty.

Migration is one of the best mechanisms for reducing poverty.

There has been much discussion very recently about the rapid and deep fall of global fertility rates. The conversation is not new, but has become more intense recently as more evidence has emerged of the depth and scope of the worldwide trend. One factor remains consistent: commentators nearly always assume that this is largely a problem, even a crisis, due to aging populations, shrinking labor forces, and unsustainable government initiatives. At times, increased global migration is mentioned as a coping mechanism, but is usually dismissed as inadequate for various reasons.

In contrast, it looks very likely that a massive increase in global migration, mostly temporary but often permanent, will emerge as the only method of compensating for this situation. Capitalists will not tolerate labor shortages if they can help it, in fact they are willing to bend and break the law in order to get around them, and thus they will inevitably and increasingly push for greater access to the world's available workers. Government after government will likely bow to the pressure, because, faced with the power of business lobbies and the prospect of companies shutting down due to lack of workers, they will not have a choice. This state of affairs might just save the world.   

From 1948 until 1962, it was possible for roughly one-quarter of the world's population to migrate freely to the United Kingdom. In response to labor shortages resulting from high levels of death and disability inflicted upon two generations by two world wars, along with some geopolitical maneuvering in the face of strong anti-colonial movements, the British Nationality Act of 1948 enabled all residents of the British Commonwealth (consisting mostly of the then-current and former nations of the British Empire) to migrate to the UK without legal restrictions. In practice, this meant that British companies were free to seek out workers from throughout the Commonwealth. Additionally, the relatively tiny numbers of upwardly-mobile Commonwealth residents who were aware of this new opportunity and had the wherewithal to pursue it began migrating on their own to the UK.

Such were the beginnings of the modern, diverse, multicultural UK. Though immigration restrictions began in 1962 and have been refined over the years, the United Kingdom remains a destination for migrants from around the world. In contrast to the perennial worries of nativists and restrictionists, nowhere close to one-quarter of the world's population migrated to the UK as long as they had the opportunity. It is an empirical fact, routinely stated and re-stated by economists across the spectrum, that immigrants by and large only bother to travel when jobs are available, and the net effect is largely positive for both sides. This can be observed within free-migration zones such as the United States and European Union. Massive hordes of people did not arrive to leech off of the National Health Service; in contrast, the British economy got the workers it needed to shake off its deep post-war doldrums and rebound strongly.

It cannot be stated conclusively (and may be unlikely) that a continued open immigration policy would have prevented subsequent economic troubles, but the ensuing restrictions cannot have helped. In any case, taking the long view, the economic results have been good for the UK and good for the world. Besides the stimulus to to the United Kingdom (whose citizens were able to buy more of the world's products and invest more heavily elsewhere), immigrants took pressure off of the markets for jobs and public goods in their home countries, and, much more importantly, sent (and continue to send) home financial remittances. More recently, immigrants commonly invest in businesses and other ventures in their countries of origin. All of this activity alleviates poverty and increases access to education, among other factors which contribute to the ongoing decline in fertility in most of the poorer countries of the world. Such is the immigrant experience around the world, and it only looks likely to replicate itself in more and more countries.

One important caveat must be made here, in that it is entirely possible for a country to have low fertility and high rates of unemployment -underemployment-poverty-etc. At the moment, this is true on both sides of the Mediterranean. Forgetting this would be succumbing to the “lump of labor” fallacy, in this case the mirror-image of complaining that immigrants “take” jobs from locals. The upshot of this is that, as labor shortages do inevitably develop in certain sectors of many economies, this will create more opportunities for people from areas with fertility above the job-creation capacity of the local market, and from areas that are simply stagnant for other reasons.   

To reiterate, as long as one solution exists, business leaders are going to do all they can to pursue it, and their governments are almost certain to oblige them. Singapore, long a nation of immigrants, seems to be ahead of the curve. The prosperous island nation's government has been filling its labor shortages with large numbers of migrants for years, and they may have recently learned the hard way that there might not be anything else they can do. This cannot have gone unnoticed in another island nation on the other end of East Asia: Japan. Xenophobic stereotypes (and realities) notwithstanding, Japanese business leaders have been agitating for increased access to foreign workers for years, and a bloc of legislators agrees with them.

Speaking of xenophobia, nativist backlashes are a guaranteed sure thing, and the results can be ghastly. In any case, those who would prevent the movement of labor to fill vacancies are transparently on the wrong side of history. With prevention of cultural conflict in mind, look for governments to rush to broker bilateral deals with nations with cultural similarities (however tenuous), or, failing that, with societies that lack any particular seemingly irreconcilable differences. Specifically, look for European countries to look first towards the Philippines and parts of Latin America, before eventually turning elsewhere. Look for Bangladesh's leaders to promote their population's secularism, relatively tolerant atmosphere, and common use of English to lure recruiters. Look for China's government to encourage its millions of surplus men to emigrate to nations with longstanding Chinese communities, even as China paradoxically is already suffering from labor shortages of its own.

Migration is one of the best mechanisms for reducing poverty, and the inexorable decline of global fertility rates will just as inexorably lead to more migration of the world's people. As the pool of available labor gradually becomes dry, a world becoming gradually much wealthier (and producing less carbon!) will be in a far better position to deal with aging, shrinking populations, along with all the other problems feared by today's chroniclers of falling fertility. 

Scott Ryan Charney received an M.A. in U.S. Foreign Policy from American University.