A brief note on the situation in Greece

The Greek economy is locked in a catastrophic downwards spiral. The odds of things getting better soon are trivial.

Greece is now caught in a Catch-22. The government must slash spending and raise taxes as a condition for getting the bailout cash it needs to pay for government salaries, pensions and operating expenses.

But the deeper Greece cuts, the more the economy shrinks and the less revenue it generates to manage its debts and eliminate its deficit. And the deeper the austerity, the more the Greek people push back, with violent strikes and protests.

As recently as July, the International Monetary Fund was forecasting that Greece would eke out 0.6 per cent growth next year. Now, it appears the economy will shrink 2.5 per cent in 2012 after a 5.5-per-cent slump this year.

And the more the economy contracts, the worse its debt burden becomes.

And as life becomes more difficult for ordinary Greeks, they start to use their capital--economic, cultural--to prepare to leave their country for a better life elsewhere. In an Inter Press Service article, Apostolis Fotiadis' "Lost Generation Begins to Leave", there are suggestions that the predicted emigration has at last begun.

A report published by the Labour Research Institute, belonging to the General Labour Union (GSEE) of private sector workers has predicted rapid deterioration. Officially more than 790,000 are currently out of work. The real numbers are higher because many are not counted due to logistical reasons.

The young coming into the labour market are hit hardest, with unemployment of those between 15 and 29 years rising above 40 percent. This feeds the emigration wave.

Some of the well-off are leaving as well. Andreas Kallisteris dropped a lucrative consultant’s job at the ministry of employment to follow his wife and son to Berlin. His wife, a self-employed translator, was also doing well, but decided to go.

"We are thinking not to ever return," Kallisteris, a highly skilled professional involved in policy making for years told IPS. "I can’t influence the future and I cannot affect the choices made by a failed administration and political system. There are no prospects for this country.

"I am leaving behind me a place that is becoming a desert. With the departure of the best human resources, phenomena like the rise of extreme right and underdevelopment will become acute social issues soon. I will only return if and when this generation that runs the country pulls out."

Old migration roots have been revitalised since last year. People from north-eastern Greece, the hardest hit by the crisis, are trying to return to Germany and Scandinavia where their predecessors flourished as ‘gastarbeiters’ (guest workers) in the fifties and sixties. Countries in Western Europe, the United States, Canada and Australia are the most popular destinations so far.

Up to July this year, 106,775 visits were recorded on the website of ‘Europass’, popular among those looking for jobs in the European Union. By August 55,073 documents were completed by people residing in Greece.

In Australia, after scams that abused the credit details of people promised migration and jobs, the Greek community in Melbourne, that has one of the biggest diaspora communities of ethnic Greeks, has mobilised to accommodate seekers.

The Burgh Diaspora's comment.

The legacy pathway of the gastarbeiters migration is 50-years old. Today's relocation is a testament to the strength of the ties between two communities. Our unit of analysis for international migration is the nation-state. Aggregated in that data are important subnational connections, such as the "Greek" Diaspora in Melbourne. The lines of trust will lead economic refugees to a specific neighborhood in the city, not just anywhere in relatively prosperous Australia. Melbourne isn't necessarily the best rational choice for an immigrant.

My Toronto may well see some new immigrants. Toronto's Greektown, located around east-central Danforth Avenue, is one of Toronto's major ethnic enclaves and, despite the expected drift of second- and third-generation Greek-Canadians away from the area as rents rise and the upwardly mobile suburbanize continues to be a centre of the community.



One thing I'd like to note is that these anecdotal reports, suggesting that Greek workers are responding to internal devaluation by seeking destinations where their living standards won't be compressed, suggest that the wider European Union is not the dominant destination for Greek emigrants despite the European Union's integrated Europe-wide labour market. The integrated labour market necessary for the functioning of a currency union, in other words, may well not be forming notwithstanding all of the economic pressures on it to form. The consequences of this, for the future of the Eurozone and the economic future of Greece--emigrants who travel far from Greece may be less likely to return, assuming an improvement, than emigrants who stay closer to the country--are evident.

Adomanis on Steyn: Eurabia as an oversimplified story

Writer Mark Adomanis has an extended review of Eurabia theorist Mark Steyn's latest book, the subtly-titled America Alone: Get Ready for Armageddon. Adomanis is critical of Steyn's thesis, since despite his undeniable skill as a raconteur with a good grasp for compelling narratives, it's fundamentally confused if not outright self-contradictory. The core of Adomanis' argument deserves to be quoted at length.

Steyn’s parallel attempts to prove that "statism" is the source of all of the world’s problems (from increasing obesity to stagnating median wages) and that the Islamic world, particularly Iran, is ready to run roughshod over an effeminate and degenerate West, relies on such a tendentious and selective presentation of facts that it actually winds up subtracting from his readers’ understanding of what is actually going on in the world.

According to Steyn, Europe is in a demographic death spiral caused by statism and, at a deeper level, the loss of religious belief and "civilization confidence." Iran, on the other hand, is on the fast track to becoming the dominant power in the Middle East.

Yes, in reality, in 2009, Iran’s fertility rate, which Steyn uses as a heuristic for a society’s overall health, was actually lower than that of Brazil (barely mentioned in "After America"), the United States (doomed, according to Steyn), France (even more doomed, according to Steyn), or the United Kingdom (which is well and truly f*****). If an Islamic revolution and the full-fledged implementation of hardcore Shariah enforced by "morality police" can’t keep Iran’s fertility rate from rapidly collapsing, perhaps the "problem" of declining fertility is actually better explained by the basic pressures of modernity than by the craven adoption of liberalism.

Consider the experience of Muslim countries like Morocco, Algeria and Tunisia. Despite not being "liberal" in any recognizable sense of the word (indeed, being almost the exact opposite of the coddling social-democratic "nanny states" that Steyn blames for the West’s decline), these countries all experienced sustained and rapid decrease in fertility over the past 20 years. Today, according to the CIA World Factbook, Tunisia and Algeria are below replacement rate (the number of children required to keep a population at a constant level) and several other Muslim-majority countries are right on the cusp. Steyn avoids the problems these facts present for his thesis through the simple and effective tactic of not mentioning them.

Steyn’s knowledge of demographics is remarkably confused. In the concluding chapter, for example, he argues that "much of America is now in need of an equivalent to ... post-Soviet Eastern Europe’s economic liberalization in the early nineties."

He seems unaware that fertility rates collapsed during Eastern Europe’s experiment with economic liberalization. Indeed, not a single post-communist Eastern European country has yet regained the level of fertility it had at the time of communism’s collapse: Once again, Steyn avoids the problems this presents for his thesis by simply leaving it unmentioned.

What I take away from Steyn’s sincere but confused attempt at comparative demographics is the following: He confidently predicts the future supremacy of countries (Iran) that are doomed according to metrics of his own choosing (the total fertility rate) while simultaneously making policy prescriptions (radical economic liberalization) that, when implemented in other countries, have had the effect of exacerbating the trend (decreasing fertility) he’s attempting to reverse.

Admonis makes an additional interesting note at his Forbes weblog.

[I]f, like Steyn, you consider all first-world countries to be irredeemably corrupt, and doomed by excessive debt and insufficient fecundity, what other real-world options are there? There are no free-market wonderlands where the people are rich, the government is small, and everyone is constantly popping out babies – we can only look at what actually happens in observed reality and judging by that there would seem to be (at the absolute least!) strong tensions between economic development, fertility, and political liberty.

We've blogged here in the past about an Iran that has the sort of age structure that could drive an economic boom if the country had better government, or about the demographic transition in the Maghreb and Libya that may soon make most of North Africa a labour-importing area. (We haven't, unfortunately, written at all about a Turkey that's also well advanced in the demographic transition and has already become something of a magnet for its neighbours. Later, we promise.) If the demographic transitition from high-fertility labour-exporting demographic systems to low-fertility labour-importing systems is so far advanced in Europe's neighbours, it's not obvious how these regions will be able to take over a much larger and wealthier continent with more impermeable barriers to entry.

Steyn writes a compelling, direct story (with, agreed, an engaging style of prose): as a result of any number of bad political, economic, and social choices, the West (starting with Europe) has become fatally weakened and is going to be taken over by a civilization that is hostile to the West and antithetical to the values of liberal and conservatives alike. He writes in a time when dystopias if not outright apocalypses are pretty common, being arguably the biggest growth area in young adult fiction. The problem with his particular dystopia is that it oversimplifies things hugely.



Take fertility. This graphic illustrates an argument advanced in Nature in 2009 that human development has a complicated relationship with fertility. "[T]here exists a "J-shaped" relationship between human fertility and development — i.e., that further advances in economic development can reverse the decline in fertility rate[, ...] that, in highly developed countries with HDI above 0.9, further development halts the declining fertility rates. This means that the previously negative development-fertility association is reversed; the graph becomes J-shaped." In such a case, rising human development may well lead to rising fertility as increasingly developed societies provide people with more chances to become parent to more children.

This is a contentious argument, many responding by saying that the correlation between higher human development and lower fertility merely weakens as human development rises. Is this weakening uniform, i.e. in some countries is the weakening more significant (or an actual reversal, even) than in others? I'd be interested in breaking the data apart and seeing whether the countries with the highest levels of human development might form high- and low-fertility clusters. Recent increases in fertility in northwestern Europe in the past couple of decades are at least suggestive.

This question isn't answered by Steyn, who simply wants to reverse things to a supposed ideal scenario that might not even exist. Certainly many European countries have higher rates of completed fertility than most of the North African and Middle Eastern countries that have produced large numbers of immigrants to Europe, as Europe's modernizing neighbours come to share in Europe's modern and post-modern demographic norms. It's a complex picture, and deserves to be treated in its full complexity.

The same goes for immigration. Steyn paints a picture of a low-fertility/high-immigration Europe bordering a high-fertility/high-emigration Muslim world that has been rapidly expanding to the exclusion of all other possibilities. The reality, however, is that things are much more nuanced: many emigrants from the countries supposedly directed towards Europe actually go elsewhere in the world in large numbers, differences in fertility between religious groups have narrowed consistently over time, and immigrants from the Middle East and North Africa are hardly the only immigrants moving to Europe. Europe may no longer dominate the world the way it did a century ago, but Europe--the continent as a whole, its component societies--are high-income countries with global connections that have fostered migrations as diverse as those of Ecuadorians to Spain, Vietnamese to Poland, and Sri Lankan Tamils to Norway. The story with immigration to Europe, again, is substantially more complex.

If you oversimplify a model of a real-world system you're going to come up with not an efficient model of the real world but a broken one. Eurabia as presented by Steyn is like that, no matter how compelling a storyline he weaves about it. We need higher criticism, desperately, for analyses of demographic situations of all kinds.

A note on changing dependency ratios and migration

The concerns I expressed about Canadian immigration patterns and policies risking the reproduction of patterns of socioeconomic inequality linked to immigration status and ethnicity are all the more salient in light of this Statistics Canada report on projected changes in the Canadian labour force.

Using a range of projection scenarios, the labour force is projected to grow to between 20.5 million and 22.5 million by 2031. In 2010, the labour force numbered about 18.5 million.

[. . .]

Between 1971 and 1976, when the large baby-boom cohorts were entering the labour market, the labour force increased at an average rate of just over 4% a year. This growth rate slowed to about 1.4% between 2006 and 2010. By 2016, growth is projected to be less than 1% on average in all scenarios. Projections show it could slow even further to between 0.2% and 0.7% in the period from 2021 to 2026.

In four of the five scenarios, the growth is projected to stop slowing after 2026, once most baby boomers have left the labour force.

The projections also suggest that, if recent trends continue, the labour force will become older and increasingly ethnoculturally diverse. Close to one person out of four in the labour force could be aged 55 or over by 2021. There would also be higher proportions of foreign-born people and people belonging to a visible minority group (as defined by the Employment Equity Act) in the labour force.

As the growth of the labour force loses momentum, the population of seniors aged 65 and over is projected to grow increasingly rapidly as a result of population aging and the entry of the baby boomers into this age range.

[. . .]

In 2010, the participation rate was 67.0%; by 2031, it is projected to range between 59.7% and 62.6%, which would be the lowest observed since the late 1970s.

The projected decline in the overall participation rate over the next two decades would be largely attributable to demographic phenomena, such as the aging of the baby-boom cohorts, increasing life expectancy and a fertility rate below the replacement level of 2.1 children per woman.

The aging of the baby boomers, which is largely behind the projected decline in the overall participation rate, has had a major impact on the aging of the labour force. Between 2001 and 2009, the proportion of people in the labour force aged 55 and over rose from 10% to 17%, an increase of 7 percentage points in nine years. The first baby boomers reached the age of 55 in 2001.

[. . .]

In 1981, there were roughly six persons in the labour force for each retiree. By 2031, or 50 years later, this ratio is projected to decline to less than three to one, according to all five scenarios. The ratio is projected to decline in every province.

By 2031, roughly one in every three people in the labour force could be foreign born. Between 1991 and 2006, the percentage of foreign-born people in the labour force rose from 18.5% to 21.2%. If recent immigration levels were to continue, that proportion is projected to reach almost 33% in 2031, according to most scenarios.

If labour forces remain largely static, it's not good at all to have a large and growing share of the national population shut out for reasons linked to ethnicity. This is the problem facing the western province of Saskatchewan, where the First Nations population is growing rapidly but remains underemployed.

"If you have a large 65-plus (population) and don't match that with an increase in the labour force size, then your dependency ratio or the health care costs or other costs associated with the retired group may be a concern," said University of Saskatchewan policy and labour expert Rose Olfert.

"On the other (hand), if those baby boomers have good retirement plans and have lots of good discretionary spending, they can also be a source of expenditure and growth for the economy as they begin to spend all their hard-earned money that they acquired over their lifetime."

Olfert warned that as bay boomers retire they will leave "a relative vacuum of experience and skills on the part of the incomers." That puts skilled and educated labour at a premium.

It's not just a numbers game, she said, but an issue of quality. Attracting and retaining workers will be a difficult and competitive process and Saskatchewan will be competing with other provinces and other countries to fill the void.

[. . .]

"We need to engage aboriginal people like never before, both as employers and as employees," he said.

High unemployment rates in the aboriginal community means that population could help meet the labour demand and, with numerous policies and programs in place, progress is being made. A recent Statistics Canada report shows offreserve aboriginal employment in Saskatchewan grew by 3,300 jobs in July from a year ago. Employment among aboriginal youth was up by 500 jobs.

"It's just that the challenge is large and even though these policies and practices are successful and are working to a large extent, they seem to not be enough," Olfert said. "It's as though you are running fast, but you have to run a little bit faster to keep up."

As for the situation in labour-exporting New Brunswick, it can be safely described as potentially catastrophic.

In New Brunswick, the labour force participation rate was at 64 per cent in 2010 and is expected to fall to between 54 and 58 per cent by 2031 - roughly six percentage points below the national average.

While the proportion of the labour force aged 55 and over is expected to reach 24 per cent in Canada by 2031, it's expected to be three percentage points higher in New Brunswick.

At the same time, the ratio of workers to retirees by 2031 is expected to be three to one in Canada and two to one in New Brunswick.

The bleak outlook is partly due to the fact the population in New Brunswick is already older than in Canada overall, Lebel said.

Seniors made up 14.7 per cent of the province's population in 2006, one percentage point higher than the proportion for Canada as a whole, according to census data.

At the same time, New Brunswick's fertility rate of 1.59 children per woman is lower than the national average - 1.68.

Almost half of the population could be more than 65 years of age by 2031, according to medium-growth projections based on historical trends by Statistics Canada.

Saskatchewan at least has a reasonable prospect of following in the path of neighbouring Manitoba.

The famous United Nations report on replacement migration of a decade ago produced some interesting results. One of these results was the confirmation that rapid population aging is irreversible. In the admttedly extreme case of South Korea, experiencing rapid aging owing to the collapse in fertility rates from the very high level of the 1960s to the very low levels of the past decade. In order to keep the exceptionally 1995 high ratio of workers to seniors, 5.1 billion immigrants would be needed. Among other things, transforming the southern half of the Korean peninsula into a vast arcology would be problematic. Declining dependency ratios are inevitable; it's occurring worldwide. Even immigration won't necessarily change dynamics, since immigrant populations would have to have exceptionally and unrealistically high birth rates to reverse secular trends (this, in turn, having its own obvious problems).

That same report on South Korea did suggest that certain relatively medium-term improvements might be sustainable; the numbers and proportions of immigrants and immigrant descended people necessary to sustain either the peak population of South Korea or the peak working-age population of South Korea seems possible. South Korea is more open to immigration than neighbouring Japan, at least, and the movement of people from Vietnam, China, and the Philippines associated with marriage-driven immigration could contain the seeds for a broader migratory movement. South Korea might come to emulate a Canada that is enacting something very much like those policies right now, you could say. For those policies to work, though, you need a labour force that is permeable to people of diverse backgrounds at every level. Besides being a waste of resources, the ethnic segmentation of a workforce carries obvious dangers for social cohesion. Creating immigrant underclasses through migration policies which don't give immigrant the chance to acquire the cultural and economic capital needed to integrate, as we've seen in many countries around the world, is--besides being foolish--self-destructive.

Migration policies really need to be thoroughly thought-out.