An increasing number of foreign-born employees has significantly strengthened the euro area’s economic performance in recent years, according to European Central Bank President Christine Lagarde. Speaking at the Federal Reserve’s annual economic gathering in Jackson Hole, Wyoming, she highlighted that although non-native workers made up just about 9% of the labor force in 2022, they were responsible for half of the workforce expansion over the prior three years. Their presence has helped counterbalance trends such as reduced working hours and declining real incomes in certain industries.
Lagarde emphasized that without this demographic contribution, labor markets would likely face tighter constraints and overall economic output would be weaker. She cited Germany as an example, noting that its GDP would stand approximately 6% below 2019 levels if not for the influx of international labor. Similarly, Spain’s robust recovery following the pandemic has been significantly supported by foreign workers filling critical roles across sectors.
Data shows that the European Union’s population reached a record 450.4 million last year, driven by net migration compensating for a natural decrease in population for the fourth consecutive year. However, rising immigration has sparked political tensions, with growing voter dissatisfaction fueling support for far-right movements in several countries. In Germany, recent policy shifts include pausing family reunification and resettlement initiatives to address concerns from citizens leaning toward opposition parties like Alternative for Germany.
Meanwhile, in the United States, stricter immigration enforcement has been implemented, including increased detentions of undocumented individuals, tighter border controls, and the revocation of legal status for large groups of migrants since former President Donald Trump took office.
— news from Reuters
— News Original —
Foreign workers have boosted euro zone economy, ECB’s Lagarde says
JACKSON HOLE, Wyoming, Aug 23 (Reuters) – An influx of foreign workers has given the euro zone ‘s economy a boost in recent years, helping offset shorter working hours and lower real wages, European Central Bank President Christine Lagarde said on Saturday. n nMigration into the European Union pushed its population to a record last year despite declining births but governments are placing curbs on new arrivals in response to domestic discontent. n nSign up here. n nLagarde listed a rise in the number of workers from outside the 20 countries that share the euro as a factor that supported the bloc ‘s economy despite a growing preference for fewer working hours and a fall in living standards in some sectors. n n”Although they represented only around 9% of the total labour force in 2022, foreign workers have accounted for half of its growth over the past three years,” Lagarde said in a speech at the U.S. Federal Reserve ‘s annual symposium in Jackson Hole, Wyoming. “Without this contribution, labour market conditions could be tighter and output lower.” n nShe said gross domestic output in Germany would be around 6% lower than in 2019 without foreign workers and added Spain’s strong economic performance since the end of the COVID-19 pandemic also owed much to the contribution of foreign labour. n nThe EU ‘s population rose to a record 450.4 million people last year as net immigration offset a natural population decline for the fourth straight year. n nBut this has come at a cost of political backlash from local voters, who have increasingly turned to far right parties. n nGermany ‘s new government, for example, has suspended family reunification and resettlement programmes as it seeks to regain support from voters drawn to the Alternative for Germany. n nIn the United States, President Donald Trump has stepped up arrests of immigrants in the U.S. illegally, cracked down on unlawful border crossings and stripped legal status from hundreds of thousands of migrants since his inauguration. n nReporting By Francesco Canepa; Editing by Emelia Sithole-Matarise