Tuesday, June 19, 2012

Eurozone Crisis Migration

Demography Matters tackles the migration fallout from the Eurozone crisis:

Mass migration from peripheral countries in the Eurozone--the Portugal-Italy-Ireland-Greece-Spain combination often cited in the press--seems inevitable. Critically from the perspective of these five countries, all save Ireland have had very low rates of net population replacement from the 1980s on. The emigration of so many people from these countries--often the young, often the talented--is going to have serious effects on the long-term futures of these countries, just as it may benefit (if all is handled well) the countries in northern Europe and elsewhere receiving these migrants.


I figured I would respond with a post of my own. If periphery outmigrants follow historical pathways (most likely), then I see trouble. Much of the talent would stay within the Eurozone (e.g. Greece-to-Germany). This is akin to kicking the proverbial fiscal can down the road. The periphery should engage in a riskier migration:

Then, as the conversation inevitably turned to the latest eurozone horrors, Oliviera made a plea. “There is such high unemployment in Spain and Portugal, they should send their people over here [to Brazil] to get work – they can work and then send money back home [to Europe] and then go home themselves after 10 years!” he earnestly explained. After all, he added by way of example, Brazil currently needs about 60,000 engineers a year – but only 40,000 are graduating inside Brazil. So why not get those European engineers, or other young graduates, to travel as migrant workers? “We have a need for 20,000 more engineers! We have a need for migrants!” he explained. Why not use Latin America as a source of remittances for eurozone families starved of cash?

Exporting talent helps to forge strong trade linkages. Any remittance flow would be gravy. Germany can't offer the growth opportunities that Brazil (or Mexico) can. Heck, I would encourage graduates from Boston universities to leave the States and hit up Sao Paulo. The return on investment is so much better there than anywhere else domestically.

We are so focused on the fact that people are leaving we don't pay attention to where they are going. It matters. A story I read this morning:

Perhaps Michigan will benefit from the worldly experiences our youth gain elsewhere, if the magnetic pull of Pure Michigan can draw them back someday.

I met one such young man, Dan Redford, in his senior year at Michigan State University. He flew the coop and now makes his home in Beijing, China. ...

... At some point in the future, Dan Redford will return to Michigan and our state will get its ROI (return on investment) from his global experience and perspective.

Not all global experiences and perspectives are equal. Mr. Redford is from Frankenmuth, MI. I've never heard of the place. When he left town for Michigan State, that was brain drain for Frankenmuth. When he moved to Beijing, that's brain drain for Michigan and the United States. The smaller the scale of territory, the bigger the ROI for landing in Beijing.

Hypothetically, let's say Redford graduates from MSU and moves to Portland. He hears that it is a fun city. The United States retains the talent. But Frankenmuth and Michigan still suffers from brain drain. The Portland experience and perspective aren't as valuable as the one in Beijing. The migrant's and everyplace concerned, save Portland, just got poorer. China Dan is a much bigger win for Frankenmuth and Michigan than Portland Dan.

1 comment:

Randy McDonald said...

Thanks for linking!

One noteworthy thing I didn't explore in that post is the fact that outwards migration from Mediterranean Europe is not directed only, or necessarily even mainly, towards northern Europe. Brazil and Angola are hugely attractive for Portuguese, as is Latin America generally for Spanish, while for Irish and Greeks traditional destinations for emigration within and without Europe--Canada, Australia, the United States--are all high-profile.