The Changing Global Economy - Reviewing the Role of Migration
A 2020 study revealed that 281 million international migrants live worldwide, representing about 3.6% of the world's population. Using previous patterns and present statistics, researchers claim that this number could hit 300 million by 2030. Most of this movement is due to the ease of movement between countries and the push-and-pull factors that have always influenced migration.
What Does the Future Hold
While 2020 figures estimated migrant numbers at 281 million, the 2030 figures could reach or exceed 300 million. Europe, which currently has 87 million migrants, will experience an influx of up to 44% more annual migrants, which will be a big jump compared to the 21% in the previous decade. The US will also witness increased admission - the region currently boasts an annual migrant population increase of at least 1 million. Projections show that the total number of migrants could hit 54 million by 2030.
The Global Economic Effect
Many migrants attribute their moves to better economic opportunities, climate, and political stability. But regardless of why people move to other countries, their decisions impact their host and native countries. How so?
The Good Side of Migration
In recent decades, most regions have witnessed an increase in the number of foreigners settling in them. For example, West and East African countries experience a lot of interest from other African countries whose nationals often wish to move to these regions. But does this come with advantages? Of course! Consider them as follows:
Increased Economic Growth.
Did you know migrants comprise about 3.6% of the world's population? This figure seems small. Yet even with this small percentage, this group contributes close to 10% of the world's GDP. That's how important migrants are to the economic growth in the countries where they settle. They can provide skilled, semi-skilled, and unskilled labor. And with countries easing their work visa requirements, educated migrants have had an easier time pursuing lucrative careers outside their native countries. Let's use the UK as an example - migrants often seek work in hospitality, healthcare, construction, and agriculture, which are vital sectors of the economy.
A Bigger Labor Market.
The world faces a lack of balance - some countries have small or aging populations while others have too many people yet few job opportunities. Migration fills this gap by allowing people from overpopulated regions to work in countries with a small labor market. Thanks to this, developed and developing countries can boost their investments in vital sectors such as agriculture and healthcare. Take the US as an example - it addresses its nursing shortages by attracting foreign nurses. By 2021, it had 200,000 foreign nurses supporting its healthcare system.
Better Innovation.
Traditions and customs often influence industries in countries, which often limits how people look at business. Migrants often introduce new businesses, thus changing the business scope and creating more work opportunities for citizens and other migrants. A 2015 study shows migrants contribute up to $6.7 trillion to the global GDP. Compared to what they would have contributed if they had stayed in their home countries, there is a whopping $3 trillion difference!
Infrastructure Development.
Migrants contribute to different economies simultaneously. On the one hand, they contribute to their host countries by paying taxes and social security. On the other hand, many migrants have dependents in their home countries and often send money back home. A 2020 study revealed that these remittances accrued to $540 billion yearly.
Considering the Negative Effects
Migrant effects are not all rosy - they can affect host countries negatively, which is something that governments, citizens, and migrants should consider. Let's look at the most common effects:
Increased Competition for Employment.
Migrants provide a wide array of skills to the job market, which can affect the opportunities available to the citizens in the host country. This increased labor supply has been shown to result in lower wages and can result in higher unemployment rates. One study showed that a 1% increase in the migrant labor force can result in a 0.3% wage reduction in low-skill jobs. However, the risk of these effects depends on the employment-to-population ratio.
Reduced Access to Public Services.
Governments often carve out specific budgets to cater to public infrastructure. As migrant populations increase, the demand for more services increases, and governments may not have the resources or policies to keep up with this change. Take the example of Germany - migrant children make up almost 30% of the population in urban areas. Integrating migrants is also a government responsibility that attracts high costs - this includes training, legal assistance, language classes, and access to social services. In the short term, studies show that the cost of integrating refugees in the EU costs about $50 billion a year.
Conclusion
Migrant numbers will continue growing and have been shown to impact the global economy positively. While the rising numbers often result in increased government spending, the cost of integrating migrants is offset by their contribution to the labor market, innovative industries, and the overall GDP where they settle and in their home countries. Thus, governments should seek ways to ensure that their transition is as smooth as possible.
