JACKSON HOLE, Wyo. (AP) — The surge in foreign-born labor following the pandemic significantly contributed to Europe’s ability to manage inflation without triggering a steep economic downturn, European Central Bank President Christine Lagarde stated on Saturday. Speaking at the Federal Reserve’s annual economic symposium in Jackson Hole, Wyoming, she highlighted that “the rise in both the number and participation rate of foreign workers” was a major factor in this outcome. In Germany, for instance, GDP would stand approximately 6% lower than its 2019 level without the contributions of immigrant labor. n nSpain’s robust recovery, Lagarde noted, was similarly driven by the influx of international workers. Her observations align with a broader economic consensus that increased labor supply from abroad helped firms scale up production in response to post-pandemic demand spikes fueled by stimulus programs. This expansion in output helped temper inflationary pressures across both Europe and the United States. However, the rise in migration has also triggered political resistance in several countries. n n“Migration could, in principle, play a crucial role in easing” labor market tightness amid aging native populations, Lagarde said. Yet she cautioned that “political economy pressures may increasingly limit inflows.” n nAdditional factors supporting stable growth despite monetary tightening included declines in real wages, companies retaining employees more aggressively, and a growing number of older individuals rejoining the workforce. Lagarde pointed out that while historically, higher interest rates have typically slowed economic activity and led to recessions, the ECB’s rate hikes in 2022 and 2023 did not produce the same outcome. n nShe noted that although foreign-born individuals represented only 9% of the EU labor force in 2022, they accounted for half of the bloc’s labor force growth over the past three years. Furthermore, increased participation by older workers helped keep unemployment in the eurozone at 6.3%, rather than rising to an estimated 6.6% without their involvement. n nKazuo Ueda, Governor of the Bank of Japan, echoed similar trends during the same panel discussion. Despite foreign nationals making up just 3% of Japan’s workforce, they have contributed to half of recent labor force expansion. n— news from spectrumnoticias.com n
— News Original —nImmigration boosted Europe’s economy after pandemic, ECB’s Lagarde saysnJACKSON HOLE, Wyo. (AP) — A jump in the share of foreign-born workers after the pandemic helped Europe bring inflation down without sharply slower growth, European Central Bank President Christine Lagarde said Saturday. n nA key factor “has been the rise in both the number and participation rate of foreign workers,” Lagarde said in a speech in Jackson Hole, Wyoming, at a Federal Reserve economic symposium. “In Germany, for example, GDP would be around 6% lower than in 2019 without the contribution of foreign workers.” n nSpain’s strong post-pandemic economic growth “also owes much to the contribution of foreign labor,” she said. n nLagarde ‘s comments echoed a common view among economists that an influx of foreign workers helped companies expand their output and meet a spike in demand after the pandemic that followed stimulus benefits. The increased supply helped bring down inflation in Europe and the United States. Yet the rise in immigration also sparked a political backlash in both economies. n n“Migration could, in principle, play a crucial role in easing” labor shortages as native populations age, Lagarde said. But “political economy pressures may increasingly limit inflows.” n nLagarde also said that a drop in inflation-adjusted wages, greater hoarding of workers by companies, and an influx of elderly people into the labor force also contributed to steady economic growth even as the ECB lifted interest rates. n nHistorically, Lagarde emphasized, higher borrowing costs have dragged down economic growth, often causing recessions and leading to higher unemployment. Yet that didn ‘t happen as the ECB raised its key rate in 2022 and 2023. n nWhile foreign born workers accounted for just 9% of the EU ‘s labor force in 2022, they have made up half of the bloc ‘s labor force growth in the past three years, Lagarde said. n nMore elderly people also joined the workforce, Lagarde noted. Without that increase, the unemployment rate in the 20 countries that use the euro currency would be elevated — 6.6%, rather than the current rate of 6.3%, she said. n nKazuo Ueda, governor of the Bank of Japan, spoke on the same panel at Jackson Hole and noted a similar trend in Japan since the pandemic. While the foreign-born make up just 3% of the workforce, they have made up half of recent workforce growth.
