Western Countries To Benefit More From Emigration
Every year, for about a quarter of a century and counting, the United States has been issuing about 55,000 immigrant visas to foreign nationals.
According to the US Immigrant Act of 1990, the Diversity Visa Programme is intended to diversify the immigrant population in the United States. But there is arguably more to that.
Nigerians have since then had their fair share of American Diversity Visas. But America is not the only country in the business of being generous in issuing immigrant visas. The United Kingdom, Australia, and recently, Canada have intensified their immigration programmes. The trend leaves many in wonder, why industrialized nations are taking in more immigrants.
The most reasonable answer is to support the West’s welfare policy. The existence, throughout the world of welfare states and social security systems, is a relatively new phenomenon.
Until the 20th-century countries tended to tax their citizens purely in order to protect them from crime and invasion. However, in the wake of the First World War and the Great Depression, as the scale of penury faced by so many families became clear, some industrialized countries evolved into welfare states, where taxes are used to redistribute money to those adjudged to be most in need, be they old, infirm, or unemployed. The original model was developed in Germany by Otto Von Bismarck in the mid-1800s.
The theory behind pensions and social security is as simple today as when the system was first devised: the citizens of a country should contribute towards a general fund when they are working and in good health, and in return, that fund will help provide for their welfare when they are sick, unable to work or when in retirement.
Despite the model having pulled many families out of poverty and having dramatically improved health and academic standards throughout the Western world, the welfare state has also brought with it some major problems: socio-economic, but especially fiscal.
From the fiscal perspective, there is the problem of how to fund the welfare system in the long run. Most social welfare systems are funded out of government’s current budgets; they are largely pay-as-you-go, with today’s taxpayers funding the pensions bills for today’s retirees rather than their own future pensions.
Such a system worked very well in the post-world war years: the massive explosion of population in the late 1940s and 1950s—the so-called ‘baby boom’ meant there were plenty of young workers paying their taxes into the pot throughout the 1960s, 1970s and 1980s. However, with fertility having dwindled since, various countries, including those mentioned at the onset, as well as Japan and the larger Europe are facing a massive bill in the future. China is also in line for the age trap.
The problem is particularly acute in the USA. The American system includes a state pension for all (social security), Medicare—free health insurance for the elderly and a number of other smaller programmes including Medicaid—health cover for the poor and temporary unemployment support. However, the system is facing a major crunch as the baby boomer generation retires.
For example, the share of the US population aged 65 is set to increase from 12% to nearly 21% by 2050, with this crop of pensioners living longer and demanding more medical care than ever before.
According to generational economists, who study the way one generation’s decisions can impinge on the next, the costs of welfare in the coming years –tied to the shrinking size of the working population, means the US is by most definitions heading for outright bankruptcy.
Similar predictions could be made of Japan, where 22 per cent of the population is already over 65, projected to rise to equal the working population by 2044.
To get out of this impending economic quagmire, one of the most practical solutions being proffered is to allow immigrants to come and work in the country, notably being adopted in the above-listed countries. This would increase the size of the workforce, coupled with the fact that many immigrant workers would retire to their home countries without claiming the state pension.
These western countries, in processing migrants, stress skills; skills that would grow their economies. Nigerian immigrants rightly fit such criteria.
That solution creates a symbiotic relationship with many countries of the world, with Nigeria in focus. As an increasing number of Nigerian professionals migrate to such affluent countries, remittances to the home country continue to swell.
Nigerians living abroad currently remit about $20 billion home every year, down from $25 billion ante Covid, and the amount is expected to reach $35 billion over the next five years.
Without a doubt, Nigeria’s increasing youth population, with an entrepreneurial spirit and so much zest to succeed will continue to fill in the labour gap of the West’s ageing population. In so doing, remittances to the home nation will continue to grow, oiling an ever-growing symbiotic lasting relationship.