Aging Workforce Changing European Landscape

Source: Europe faces labor shortages as population ages - IHT.com

An aging population is projected to leave Europe with huge labor shortages. Deaths in Western Europe exceeded births for the first time in 2006. Demographics in Germany, the EU’s most populous country, suggest the population could shrink almost 70% by the end of the century. Across Europe, the workforce is expected to decline by 60 million in the next 10 years as older workers retire.

The impact of the aging workforce is already felt throughout Europe. In Germany alone there are 687,000 unfilled openings. Employers and employment agencies throughout the EU report difficulty in filling vacancies.

Efforts to fill these vacancies are hampered by tight European immigration regimes. A professional demographer explains one of the ironies of globalization: it has facilitated capital and trade flows and made it easier for people to travel, but governments are imposing restrictions making employee mobility more difficult. That paradigm, however, might be untenable in light of Europe’s changing dynamics.

QUESTIONS

Is immigration the answer to Europe’s declining population? Can Europe maintain its economic strength with a shrinking workforce? Are there other ways, such as outsourcing to labor-rich nations, in which Europe can compensate for a declining workforce?