As readers of this journal may recall, I have argued that immigration has historically been a great net benefit to this country, and continues to be. Two recent articles give me occasion to reflect upon this topic anew.
The first is a piece from the Telegraph of London. It reports that Germany’s birth rate has now dropped to the lowest level in the world, and its workforce will shrink even faster than Japan’s in a few years. Germany’s rate averaged 8.2 births per 1,000 population (or about 1.38 births per woman on average) over the years 2008 to 2013, even lower than that of demographically depressing Japan (with its 8.4 births per 1,000, or an average of 1.41 children per woman) over the same period.
At this rate, Germany’s population will drop from its present 81 million down to 67 million in 45 years. This decline is in spite of the large influx of migrant (i.e., temporary) workers. The prospect of such a heavy drop in population — nearly 20% — has led some small towns in Brandenburg, Pomerania and Saxony to begin formulating plans for eventual closure.
Germany and Japan are likely to drop almost 20% in per capita GDP by 2060, compared to about 10% in Britain and the US.
The report notes that Britain and France are both doing better demographically. Both countries averaged 12.5 births per 1,000 population (or an average 2.01 children per woman), again over the same period. (The US has dropped to an average of 1.88 children per woman, which is below replacement rate. We continue to grow in population only because of our relatively welcoming immigration policy.)
In the crucial working age group (20–65), the percentage of Germany’s population will drop from the current 61% down to 54% by 2030. At that point, there will be only 1.1 workers per retiree, which will likely make the pension system insolvent.
The economic and geopolitical impact of such shrinkages will be profound, to say the least.
Economically, from the young come the gales of creative destruction that cause economic progress. As the author of the piece out it, “While aging societies can enjoy a rise in per capita income for a while, they tend to do so by living off past productivity and intellectual capital. This reserve is exhausted over time. It becomes progressively harder for older countries to remain at the technology frontier.” From the young come also the gales of new purchases — of homes, for growing families, of cars, of diapers, of the newest electronic devices…
This shows up in GDP per capita. Germany (and Japan) are likely to drop almost 20% by 2060, compared to about 10% in Britain and the US. In fact, the IMF calculates that both Britain and France will overtake Germany in total GDP by 2040.
Geopolitically, this means that Germany and Japan will lose their regional dominance.
The cause of all this is compound, that is, has more than one contributory factor. The first factor is one common to all developed nations, including ours: a baby boom followed by a baby bust. After WWII, Canada, Japan, the US, and Western Europe all saw rapid explosions in population, as soldiers returned and started families. But the “baby boomers” had lower rates of childbirth, and their children have lower rates of childbirth. Birth-dearth squared, so to say.
As I mentioned earlier, all developed nations are facing this demographic challenge. But there is a second factor at play, one that I will call “Volkische communitarianism,” folkish communitarianism. This term refers to statist politico-economics wedded to ethnic or racial tribalism. This, I would suggest, is the real problem Germany and Japan face, one that does not afflict — at least to the same degree — Britain, France, Canada, or the US. The fact that Germany and Japan identify national identity in terms of ethnicity, shared blood, rather than shared culture and norms means that while Britain, France, Canada and the US have been able to assimilate immigrants more or less successfully (the Muslims in France and Britain rather more slowly than our immigrants), the Germans and Japanese find that very hard. Their immigrants (and Germany has a fair number of them — 800,000 migrants came in last year) have historically tended to remain apart from the rest of the community.
But another report suggests that German Chancellor Angela Merkel is trying to change the national mentality. In a recent talk at a conference on Germany’s current quality of life, she urged her fellow Germans to welcome the diversity of the new migrants, saying Germany is a “country of immigration.” She added, “There is something enriching if someone wants to come to us.” She added that these recent migrants need to feel at home.
At that point, there will be only 1.1 workers per retiree, which will likely make the pension system insolvent.
She is wrestling with some real problems. Past waves of migrant workers — such as the Turkish workers who came years ago — have faced difficulty in getting citizenship. Whether she will succeed in persuading her fellow citizens remains to be seen, of course. The anti-immigrant party Alternative für Deutschland party has been growing lately, as the number of immigrants has grown.
But one has to admire her attempt to deal with the issues, especially given Germany’s not too distant past of tribalist politics.