Monday, April 15, 2013

Demographic Decline And Immigration

The Rust Belt is dying. Immigrants are the silver bullet. The Portland malaise spreads. Brazil with the anecdote:

“In a globalized world, we need not only the flow of goods and services but also the flow of minds,” Secretary of Strategic Affairs Ricardo Paes de Barros said. “We’re not after population; we’re after talent and human capital.”

In a globalized world, reciprocity rules. The balance of trade isn't as important as the total exchange. Cleveland wants immigrants to bolster population. Cleveland should want immigrants for economic development. Cleveland should want to export talent:

Swedish Foreign Affairs Minister Carl Bildt believes it’s essential to embrace globalization. “I want to have more of the world in Sweden and more of Sweden in the world,” he told me. Sweden isn’t afraid of brain drain, he said. Instead, “we encourage our young people to study abroad and to work abroad.” Many return, but even those who don’t help to connect Sweden to what Mr. Bildt calls “the global flow of ideas.”

There's that word again, "flow". Flow of ideas. Flow of minds. Flow of capital. These flows are generally seen as the cause of Rust Belt demographic decline. As the global economy flowed away from the Industrial Heartland, so did the people. If you don't believe me, then just look at the population numbers.

The Rust Belt is afraid of global flows, globalization. The majority of efforts work against these flows. The desire for more immigrants is an exception, sort of. Like wishing for Big Steel to make a comeback, the Rust Belt remembers being a destination for the foreign born. Immigrants brought both entrepreneurial spirit and a tradition of having a lot of babies. Demographic convergence is putting the kibosh on the latter boom. Birth rates aren't what they used to be.

Population isn't the metric that it used to be, way back in 1910. Migration isn't what it used be. The wealthier and better educated dominate the transnational flows. Quality trumps quantity. Immigrants can bring an economic development spark, if you know how to leverage the flow. Toronto doesn't know how to leverage immigration:

Out of 24 major world cities, from London to New York, Paris to Tokyo, Toronto’s population has the highest proportion of immigrants – 46 per cent of residents are foreign born. But not enough new arrivals are highly skilled, and those that are tend to be underappreciated, according to the 2013 Scorecard on Prosperity.

Among Toronto’s new immigrant population, 55 per cent have a university degree, good for just seventh place among a dozen North American cities, and behind Calgary, Vancouver, Montreal and Halifax. Making matters worse, Toronto fails to maximize its new immigrants’ skills, with 40 per cent making “a downward shift in their career” when they arrive. The cost to Toronto’s economy is between $1.5-billion and $2-billion each year, the report says. At the same time, Canada is accepting near-record levels of temporary foreign workers for jobs that employers say they cannot fill with local talent, with much of the growth in lower-skill jobs.

“When you have that kind of competition at the bottom of a wage pool, it actually has a downward effect on wages just above it,” said Armine Yalnizyan, senior economist at the Canadian Centre for Policy Alternatives. “So it will affect those economic immigrants.

Immigrants in and of themselves aren't a panacea. Talent has to be put to good use. Any sort of push for more immigration best keep Toronto and Portland in mind.

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