Europe’s Growth Depends on Immigrants. So Does America’s
Christine Lagarde says half of Europe’s job gains since 2021 came from foreign workers. Without them, GDP would collapse.
WASHINGTON — Christine Lagarde didn’t mince words in Wyoming. Speaking at the Federal Reserve’s annual symposium, the European Central Bank president said out loud what most politicians avoid: Europe’s economy would have flatlined after the pandemic if not for immigrants.
Foreign workers, though just 9% of the EU’s labor force in 2022, accounted for half of its job growth over the past three years. Germany’s economy would be 6% smaller without them. Spain’s recovery “owes much” to the same group. In total, the eurozone added 4.1% more jobs between 2021 and 2025 — a surge that kept factories running, hospitals staffed, and inflation tamer than expected.
“Without migration, labor market conditions could be tighter and output lower,” Lagarde told central bankers. She could have added: without migration, Europe’s future is demographic quicksand.
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The Numbers Don’t Lie
Europe is aging out of growth. Fertility rates across the EU hover at 1.5 children per woman — far below the replacement rate of 2.1. By 2050, one in three EU citizens will be over 65, and pensions already consume more than 16% of GDP in countries like Italy and Greece. Unless new workers arrive, productivity gains will go just to covering the bills for the old, not raising living standards for the young.
Japan shows the cost of ignoring the math. With only 2% of its population foreign-born, it is the oldest society on Earth, and its economy has stagnated for two decades. Entire industries have withered for lack of workers, while overtime culture has ground down those still on the job. “A society at the brink of survival,” as Japan’s own prime minister admitted.
The EU is not Japan — at least not yet. But the trajectory is clear. Close the door to immigrants, and Europe inherits Japan’s curse: shrinking GDP, higher taxes, and the slow suffocation of growth.
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America’s Mirror
The United States is not exempt. Fertility here also slipped below replacement level in 1980. Nearly one in four Americans will be retirement age by 2050. The Social Security Administration says that by the 2030s, its trust fund will fall short by the equivalent of 35 million workers’ worth of taxes.
Who fills that gap? Immigrants. Recent arrivals are overwhelmingly working-age adults — 79% are between 18 and 64, compared with 61% of the native population. They pay nearly $1 trillion in taxes annually, according to government data, while consuming $300 billion less in public services than they contribute. A Cato Institute study estimated that filling vacant jobs with immigrants would increase U.S. GDP by $2 trillion — about 10%.
Jerome Powell, chair of the Federal Reserve, once warned of a “missing 1.5 million workers” after COVID-19 killed hundreds of thousands of Americans. Immigration erased that shortfall within months. Nobel economist Paul Krugman put it bluntly: “The resurgence of immigration is, from an economic point of view, a good thing all around.”
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Politics vs. Math
And yet, the politics are toxic. Donald Trump’s campaign is built on mass deportations. In Europe, mainstream parties echo the far right’s calls to “crack down” on asylum seekers. But the numbers don’t care about campaign slogans.
Without immigrants, Europe shrinks. Without immigrants, America stalls. With them, both have a chance not just to maintain their living standards but to grow.
The question is whether leaders will level with their voters. Immigration isn’t charity. It’s survival.
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