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How Immigration Helps Host Economies

The human species has been migrating since the dawn of time.

Many a millennium has passed since our cavemen days, but it’s still human instinct to move around in search of greener pastures.

Nowadays, people can’t roam the world as freely as they once did. The existence of frontiers and border security regulations has helped create a negative perception of immigrants.

However, immigration actually has a positive impact on host economies, and there is data to prove it.

Migrant workers quench and create demand

The Organization for Economic Cooperation and Development (OECD) reported that, in the last decade, migrants have accounted for a 47% increase in the US workforce and a 70% increase in Europe.

For occupations such as machine operating, assembling, maintenance and repair, migrant workers represent a 24% entry increase in Europe and a 28% increase in the US. Those who struggle with the language or have low education levels tend to focus on these manual labor industries that are often disregarded by natives.

But what happens to the many natives who also lack higher education? According to the Berkley Review of Latin American Studies, natives with similar education backgrounds take up jobs that require more communication skills like supervising or managing.

Immigrants are also high-level workers and businessowners

While a third of immigrants never finished high school, another third possesses a college degree or higher. The 21st century has seen immigrants represent 31% of the increase in highly educated workers in Canada, 21% in the United States and 14% in Europe.  

Migrant workers also have a significant presence in the science, technology, engineering and mathematics (STEM) sectors, with international workers comprising 22% of new hires in the US and 15% in Europe.

Migrants fill gaps within both fast-growing and declining sectors of the economy, helping to garner more labor-market flexibility. And that’s not saying anything about the many immigrants who are businessowners and employers.

Migrant workers give more than they receive

According to a study conducted by the OECD, migration has rarely affected GDPs by more than +/-0.5% in the past 50 years. That being said, immigrants provide a net benefit of around 2% in countries like Switzerland and Luxembourg.

The data provided by OECD debunks the myth of immigrants representing a burden to the public purse. In fact, the study even goes as far as to say that “migrants contribute more in taxes and social contributions than they receive in individual benefits.”

Immigrants participate in the market

Wait, but aren’t immigrants sending all their money back home? While they sometimes do, they’re still spending a good portion of their salary grocery shopping, paying for rent and transportation and incurring medical and utility bills. If anything, it’s their savings that are suffering.

Migrant workers fill in the gaps

When speaking of skills, migrants bring plenty. Tending to be at least bilingual, immigrants are also knowledgeable about foreign markets and demographics. They bring in new perspectives and are known to contribute to technological progress, boosting research and innovation (Hunt, 2010).

In Europe, many workers are nearing retirement age with not enough skilled workers to replace them. In a few decades, European workers will need to take care of twice as many elderly people, as The Guardian reported back in April. Immigrants are helping bridge this gap, especially within the health sector.

The fiscal contributions migrant workers can make depends entirely on the employment opportunities they are offered. With countries like Belgium, France and Sweden poised to see positive budget impacts to their GDP, the OECD states that the integration of immigrants should be regarded as an investment rather than a cost.

When it comes to migrant workers, nations have plenty to gain. In the end, immigrants make the most of what they have.

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