Immigration by the Numbers – Why It Will Be A Much Bigger Problem For Europe In Coming Decades

Immigration by the Numbers  – Why It Will Be A Much Bigger Problem For Europe In Coming Decades

Brexit has added an exclamation point to the realization that immigration is a critical issue to a growing fraction of people in the developed world.  Despite the vast amount of commentary on the issue, there is almost a total dearth of numbers.  What makes immigration such a critical issue, and a very different issue than it was in the past, are the numbers.  In 1850, when American immigration was booming the world population was 1,262 and America’s was only 23 million.  The population of Europe was 276 million which was 21.9 percent of the global total.

Today the situation is dramatically different.  By the end of 2015, the world population had jumped by factor of six to 7,243 million.  The European fraction of had fallen to less than 10 percent.  In the last 50 years, European population growth has been essentially zero while the population of the Middle East and Africa have grown at 2.6 percent per year.

The internet has shown poor people throughout the world how nice it would be to live in a country such as Austria.  But Austria currently has a population of less than 9 million.  Syria alone has a population of almost 22 million.  There are an additional 78 million in Iran and 35 million in Iraq.  In Africa, the populations of Nigeria, Ethiopia, the Congo, and Tanzania are 179 million, 97 million, 69 million and 51 million, respectively.  Most of those people are poor and hoping for a better life.  Many would choose to move if they had the chance.  The numbers are even larger in Asian countries like Pakistan at 185 million and Bangladesh at 159 million.  Finally, there is India whose population of 1,267 million is equal to the total world population of 1850.  If even a small fraction of India’s poor were to emigrate they would quickly overwhelm virtually any host country.  The entire population of the UK is only 63 million.

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In light of these numbers, and there are hundreds of millions of other potential immigrants I have not accounted for, it is not hard to understand why public opinion in Austria and the rest of Europe and North America is being transformed.  To complicate things further, the math just gets worse over time.  Population growth remains highest where people are poorest and political unrest is greatest, particularly in the Middle East and Africa, and slowest in the developed countries that are potential hosts.  In another generation, the situation will be even less stable.  Furthermore, given the limited number of people that host countries can possibly absorb, how will the select be chosen?

The bottom line is that it makes little sense to speak of the immigration problem generically – it depends on the numbers.  And the numbers today are qualitatively different than they were a century or two ago.  It is no longer feasible for a sizeable fraction of the world’s poor to move developed countries.  As more citizens in developed countries become aware of this, resistance to immigration will surely grow.  It is unfair to call this Xenophobia.  It is recognition that in light of the number of people involved there is no “solution” to the immigration problem other than improved governance, faster economic development and slower population growth in the developing world.

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Bradford Cornell is an emeritus Professor of Financial Economics at the Anderson School of Management at UCLA. Prof. Cornell has taught courses on Applied Corporate Finance, Investment Banking, and Corporate Valuation. He is currently developing a new course on Climate Change, Energy and Finance. Professor Cornell has published more than 125 articles and four books on a wide variety of topics in applied finance. Professor Cornell is also a managing director at BRG where he heads the practice on Climate Change, Energy and Finance. In addition, he is a senior advisor to the Cornell Capital Group and to Rayliant Global Advisors. In both capacities, he provides advice on fundamental investment valuation.
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