Post by tufta on Oct 4, 2010 17:38:31 GMT 1
"Like the rest of Europe, Poland has a looming demographic crisis on its hands. With aging populations and rising pension costs, the countries of Europe desperately need more people to enter their workforces and contribute to their pension systems. In the short term, governments must find ways to bolster the pan-European labor force; in the long term, they must find ways to increase their populations.
How to do that? The Polish government’s answer thus far has been to introduce legislation that will make nurseries and day-care centers more common and more affordable, hoping that people will have more children and parents will flood into the workforce.
But will this approach bear fruit, literally or figuratively?
Doubtful. Expecting child-care alone to solve the problem is naïve. Plenty of evidence shows that as societies get richer – and Polish society is definitely, happily, doing that, thanks to market reforms and EU membership – fertility rates tend to drop.
That’s not to say that providing more child-care options isn’t good policy. It is. But on its own the move is little more than a band-aid fix. It will do little to keep Poland’s pension system stable in the long run.
Under its nose
So what should be done? The answer is – or should be – somewhat obvious. A concerted effort must be made, involving tough political decisions like an increase in retirement age.
Again though, a large influx of young labor is needed. Finding it needn’t be hard. Although it’s not a politically attractive option, there’s plenty of labor sitting right on the continent’s doorstep – in Turkey.
Much of the debate over Turkish membership in the EU has centered on its young, mobile population which, given the opportunity, could deluge the bloc with able-bodied workers. In a recent debate between columnists in the Financial Times, even the author in favor of Turkey’s membership in the EU tempered his argument with the caveat that there would have to be strict limitations on the mobility of Turkey’s population into the current EU27.
Yet overly strict limitations would be a mistake. An influx of Turkish labor could greatly ease some of the strain on Europe’s pension systems by increasing the number of those paying into them.
And while it’s next to certain that most Turks would choose prosperous Western European economies to immigrate to, it’s not unreasonable to think that a large number could end up settling along the Vistula. Po-land’s stability and respectable economic growth offer attractive opportunities, and of course there will be family ties and other reasons to come to Poland. Not every Turk wanting to emigrate will find room in Germany.
Wrinkles in the plan?
Some worry that a large influx of immigrants from a country as culturally different as Turkey will lead to social tension. But look to today’s Japan to see what draconian immigration rules and an aging population bring – growing impoverishment of the young and old alike.
Governments have both the tools and the responsibility to ameliorate cultural tensions. The alternative – going deeply into debt to subsidize an entire generation – is far more daunting.
Others argue that the EU would do better to incorporate more culturally similar countries, such as those to its south and east. But the fact remains that the only country worth considering for EU membership whose population is comparable to Turkey’s is Ukraine, and it now seems further from accession than ever. Turkey has already started talks.
There is also the argument that increasing the working population would only delay the problem further into the future. While that’s certainly a danger, the influx of money into pension systems will give governments much-needed time to sharpen their policies and ensure that their pension programs are fiscally sound.
There are other benefits to opening Europe’s labor market to Turkish workers as well: lower labor costs, higher competitiveness, a more attractive investment environment, an influx of ideas and a cultural exchange. These pluses were on display in the UK when Central European workers – mostly Poles – moved in search of higher wages, greatly benefiting the UK’s economy.
Europe as a whole could gain from a continent-wide influx of fresh labor. The continent is aging, but if it allows Turkey and its people full economic integration, it can do so gracefully."
From Warsaw Business Journal
How to do that? The Polish government’s answer thus far has been to introduce legislation that will make nurseries and day-care centers more common and more affordable, hoping that people will have more children and parents will flood into the workforce.
But will this approach bear fruit, literally or figuratively?
Doubtful. Expecting child-care alone to solve the problem is naïve. Plenty of evidence shows that as societies get richer – and Polish society is definitely, happily, doing that, thanks to market reforms and EU membership – fertility rates tend to drop.
That’s not to say that providing more child-care options isn’t good policy. It is. But on its own the move is little more than a band-aid fix. It will do little to keep Poland’s pension system stable in the long run.
Under its nose
So what should be done? The answer is – or should be – somewhat obvious. A concerted effort must be made, involving tough political decisions like an increase in retirement age.
Again though, a large influx of young labor is needed. Finding it needn’t be hard. Although it’s not a politically attractive option, there’s plenty of labor sitting right on the continent’s doorstep – in Turkey.
Much of the debate over Turkish membership in the EU has centered on its young, mobile population which, given the opportunity, could deluge the bloc with able-bodied workers. In a recent debate between columnists in the Financial Times, even the author in favor of Turkey’s membership in the EU tempered his argument with the caveat that there would have to be strict limitations on the mobility of Turkey’s population into the current EU27.
Yet overly strict limitations would be a mistake. An influx of Turkish labor could greatly ease some of the strain on Europe’s pension systems by increasing the number of those paying into them.
And while it’s next to certain that most Turks would choose prosperous Western European economies to immigrate to, it’s not unreasonable to think that a large number could end up settling along the Vistula. Po-land’s stability and respectable economic growth offer attractive opportunities, and of course there will be family ties and other reasons to come to Poland. Not every Turk wanting to emigrate will find room in Germany.
Wrinkles in the plan?
Some worry that a large influx of immigrants from a country as culturally different as Turkey will lead to social tension. But look to today’s Japan to see what draconian immigration rules and an aging population bring – growing impoverishment of the young and old alike.
Governments have both the tools and the responsibility to ameliorate cultural tensions. The alternative – going deeply into debt to subsidize an entire generation – is far more daunting.
Others argue that the EU would do better to incorporate more culturally similar countries, such as those to its south and east. But the fact remains that the only country worth considering for EU membership whose population is comparable to Turkey’s is Ukraine, and it now seems further from accession than ever. Turkey has already started talks.
There is also the argument that increasing the working population would only delay the problem further into the future. While that’s certainly a danger, the influx of money into pension systems will give governments much-needed time to sharpen their policies and ensure that their pension programs are fiscally sound.
There are other benefits to opening Europe’s labor market to Turkish workers as well: lower labor costs, higher competitiveness, a more attractive investment environment, an influx of ideas and a cultural exchange. These pluses were on display in the UK when Central European workers – mostly Poles – moved in search of higher wages, greatly benefiting the UK’s economy.
Europe as a whole could gain from a continent-wide influx of fresh labor. The continent is aging, but if it allows Turkey and its people full economic integration, it can do so gracefully."
From Warsaw Business Journal
