Labor Migration Challenges and Solutions

labor migration

This article was last updated on December 11, 2023

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Labor Migration Necessary Until 2040

Labor migration is only a partial solution to the aging population and staff shortages. After 2040, it could cause new problems. This is the conclusion of the Migration Advisory Council, an independent advisory board for the government.

The advisory council examined what labor migration could mean for the ‘grey pressure’, which is the ratio between workers and retirees in the country. This pressure will increase in the coming years, meaning that collective provisions such as the state pension and healthcare will have to be financed with fewer people.

Three Million Additional Migrant Workers

To keep the gray pressure at the current level, around three million additional labor migrants would have to be attracted to the country by 2040, but this is deemed “not realistic” by the researchers. There are other options to alleviate the gray pressure, such as increasing the average working week or the state pension age.

According to the researchers, attracting 50,000 additional labor migrants annually would have a similar effect as increasing the average working week by ten minutes each year, or increasing the state pension age by 3.5 months per year. After ten years, the average working week would have been extended by 1 hour and 40 minutes, or the state pension age would have been raised by three years.

It Will Reach Its Peak in 2040

According to the researchers, the balance could tip if too many migrant workers are brought to the Netherlands. Chairman Monique Kremer of the advisory council noted that bringing in too many people after 2040 could lead to an overabundance of workers for the available work, creating new problems.

Wages Above 40,000 Euros

Labor migrants, particularly highly educated knowledge migrants with gross salaries of over 40,000 euros, contribute significantly to economic growth. The researchers highlighted that migrant workers can be especially valuable if they bring knowledge or skills lacking in the Netherlands, such as specialized nurses or technicians, which can lead to additional job creation in the country.

Competing with Migrants

The researchers concluded that selective labor migration, where only migrants with unique qualities are admitted, can be beneficial to the Netherlands until 2040. However, they also warned against too many low-paid migrant workers as it could lead to a vicious circle where Dutch people no longer apply for certain jobs, leaving sectors dependent on cheap labor migrants.

Overall, labor migration serves as a partial solution to the challenges posed by an aging population and staff shortages, but careful consideration and planning are required to avoid potential problems beyond 2040.

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