L.this year 1.2 million people emigrated to England— arguably the most ever. Net immigration (i.e. immigration minus immigration) to Australia is now double what it was before the COVID-19 pandemic. The Spanish equivalent recently hit a record high.About 1.4 million people are expected to attend online immigrate to america This year, it has increased by a third compared to pre-pandemic. Net immigration to Canada in 2022 is more than double his previous record. In Germany, it was even higher than during the 2015 “migrant crisis.” The entire prosperous world is in the midst of an unprecedented immigration boom. The foreign-born population is growing faster than at any point in history (see Figure 1).
What does this mean for the global economy? Not so long ago, many wealthy countries seemed staunchly opposed to mass immigration. In 2016 Brits voted for him to leave the EU and then Americans voted for Donald Trump. Both political projects were strongly anti-immigrant. In the ensuing wave of global populism, politicians from Australia to Hungary have promised to crack down on immigration. Then closed the border. Migration stopped or even reversed as people decided to return to their homelands. Between 2019 and 2021, the populations of Kuwait and Singapore, countries that typically receive large numbers of immigrants, fell by 4%. In 2021, immigration from Australia will outnumber immigration to the country for the first time since the 1940s.
In some areas, a surge in migration has brought a sense of normalcy back. Singapore’s foreign workforce It recently returned to pre-pandemic levels. Elsewhere, it feels like a dramatic change. Consider Newfoundland and Labrador, which has the second smallest population in Canada. A long Irish Catholic population and matching accents have resulted in net immigration to the state more than 20 times higher than pre-pandemic standards. Once a fairly homogenous city, the capital, St. John’s, feels like Toronto every time you visit. A Ukrainian bakery called Borscht has opened in the small rural village of Hearts Delight. The state government has set up an office in Bangalore to help recruit nurses.
New arrivals to Newfoundland are the epitome of those elsewhere in the world of abundance. Hundreds of Ukrainians have arrived on the island, but they are only a fraction of the millions of Ukrainians who have left the country since the Russian invasion. Indians and Nigerians also appear to be moving in large numbers. Many speak English. And many already have family ties to wealthy countries, especially the UK and Canada.
Part of the surge in immigration is because people are trying to make up for lost time. Many immigrants obtained visas in 2020 or 2021, but only traveled after COVID-19 restrictions were eased. But the wealthy world’s foreign-born population, well over 100 million, is now above pre-crisis trends, suggesting something else is going on.
The nature of the post-pandemic economy is a big part of the explanation. The wealthy world’s unemployment rate is 4.8%, the lowest it’s been in decades. Bosses are desperate for staff shortages, and vacancies are near record levels. Therefore, people from abroad have good reason to travel. Currency movements can also be another factor. The British pound has been bought over INR 100 compared to INR 90 in 2019. Since early 2021, the average emerging market currency has fallen about 4% against the dollar. This will allow immigrants to repatriate more money than before.
Many governments are also trying to bring in more people. Canada has a clear goal of welcoming 1.5 million new residents between 2023 and 2025. Germany and India recently signed an agreement allowing more Indians to work and study in Germany. Australia has extended the length of time some students can work after graduation from two to four years. Britain has welcomed Hong Kongers fleeing Chinese oppression, with well over 100,000 Hong Kongers arriving. Many countries facilitate the entry of Ukrainians. Even countries that were previously hostile to immigration, including Japan and South Korea, are turning to foreigners more favorably as they try to combat the effects of an aging population.
Economies that accept more immigrants tend to be more profitable in the long run. Look at America Foreigners bring new ideas. A recent paper by Pierre Azoulay of the Massachusetts Institute of Technology and others found that immigrants in the United States are about 80% more likely than native-born people to start a company. Studies show that immigrants also help build trade and investment links between their home and host countries. A cluster of young workers also helps generate more tax revenue.
your people will be mine
Some economists hope that waves of immigration will bring more direct benefits. “High immigration is good for the Fed as it seeks to cool the labor market and keep inflation under control,” said Torsten Slok of asset manager Apollo Global Management. Such arguments may be a little too optimistic. More people will increase the labor supply, but all other things being equal, wage growth will decrease. However, the effect is rather small. There is little indication that the countries hosting the most immigrants have the loosest labor markets. In Canada, for example, salaries are still up about 5% year-over-year (see Figure 2).
Immigration also increases demand for goods and services, which can lead to higher inflation. In the UK, new immigrants appear to be pushing up rents in London, where housing was already limited. A similar effect is also evident in Australia. Estimates released by bank Goldman Sachs suggest that Australia’s current annual net migration rate is 500,000, suggesting that rents are rising by about 5%. Rising rents lead to an increase in the overall consumer price index. Demand from immigrants may also explain why house prices in many rich countries have not fallen as much as mortgage rates have risen.
Immigration may drop slightly over the next year or so. The post-pandemic “catch-up” is over. The labor market for the wealthy is gradually easing. But there is reason to believe that the historically high level of new arrivals will continue for some time. One factor is that they are more welcoming of government policies. More importantly, today’s migration will cause tomorrow’s migration, as new immigrants bring their children and partners with them. In time, the anti-immigrant shift in the affluent world of the late 2010s will look like an anomaly. ■
https://www.economist.com/finance-and-economics/2023/05/28/a-new-wave-of-mass-migration-has-begun A new wave of mass migration has begun