Why Social Democracies Need Immigration
French demonstrations escalated in the last few months in response to the Macron government raising the pension age. But how much of this is the French public’s own doing, given the surge in far-right politics and anti-immigration sentiment in recent years?
France, like much of the global north, is facing a demographic crisis as baby boomers age into retirement and are living longer while there are fewer millennials and Gen Z citizens to take their place in the workforce. This means a smaller tax-base to fund the pensions of said boomers. Macron’s supporters argued that raising the pension age accounts for this fiscal squeeze.
Critics of this move on the left have argued that the Macron government could have raised taxes on the rich instead. While I’m sympathetic to this argument, this solution would have only delayed further problems down the line (as does raising the pension age). As progressive policy writer Matt Bruenig points out, taxing the rich alone can’t keep social safety nets and the welfare state running forever — especially when done in conjunction with other social democratic policies intended to reduce the share of market income that flows to the rich. Bruenig puts it simply: “You can’t tax the rich if the rich are no longer rich.” Sooner or later, the middle-class has to start paying too. A number of social democratic countries, especially the Nordic countries, have already realized this and tax much more regressively — often via a value added tax (VAT). In fact, it may surprise many to learn that the United States has the most progressive tax system among OECD countries. David Sligar, a policy writer, models here in more detail how a regressive tax can actually produce greater revenues for redistribution and reducing inequality than a progressive system.
But again, we cannot continue to tax broadly if the number of young workers we have is dwindling. One potential solution is to increase incentives to reduce the burden of childcare. However, global demography research has shown that incentives like tax credits alone are insufficient in the long-run. This method also requires funding from the dwindling tax-base.
For this reason, a more open immigration system is a necessary component in addressing the demographic crisis and maintaining strong social safety nets.
In the case of the US, an aging population with a dwindling native workforce also means there will be fewer caretakers. This field is already partly sustained by immigrants, as Retuers reports, with one in four caregivers in nursing homes being immigrants and one in three being housekeeping and maintenance workers.
So what kind of immigration reforms should we aim for in practice? Solutions suggested by economists in this NPR interview include moving towards expanding permanent visas. Nicole Narea writing for Vox points to a variety of flexible visa programs implemented and proposed around the world, including, in the US, a bill introduced by Republican congressman John Curtis.
To appease French anti-immigration sentiment, lawmakers were unable to consider the best policy option available when finding long-term solutions to their pension system. The Macron government’s decision to press on with the pension reform in spite of massive public condemnation and a subsequent vote of no confidence against Macron speaks volumes about what was not chosen. The refusal to increase taxes on the wealthy or rebuild the pension system from the ground up as economist Thomas Piketty suggested may indicate regulatory capture or insufficient political capital. But perhaps the lack of proposed immigration reforms beyond faster deportations for undocumented migrants points to French officials’ fears that are greater than the protests seen presently — a fear shared by the populace that elected them.
The French are hardly alone in their anti-immigration sentiment, as Brexit and the election of Donald Trump to the US presidency, two of the most notable right-wing victories of the last decade, were at least partly driven by nativist sentiment. On the whole, as a 2020 analysis from Gallup showed, global acceptance of migrants declined from 2016 to 2019. But it would not necessarily be accurate to attribute anti-immigrant sentiment entirely to the political right.
Left-wing parties in countries such as Denmark, Norway, Sweden, and New Zealand, for example, have taken hardline stances against further immigration. In the US, Senator Bernie Sanders, opposed greater immigration for most of his career — warning against “open-borders” as a “Koch-brothers proposal” in 2015.
The source of this left-wing anti-immigration sentiment is the belief that such restrictions are necessary to protect working-class jobs. As economist Noah Smith points out in detail, however, this idea that immigrants “take” jobs does not pan out in reality. A greater supply of workers would result in lower wages… if all they did was work. But because they’re human beings who buy things like food, shelter, entertainment, and manufactured goods, they also increase demand for more workers and jobs across the economy to provide those things. These arguments about jobs being “taken” are examples of what economists call the “lump of labor” fallacy, and it has also been used to argue against automation and women entering the workforce.
To criticize left-wing opponents of migration is not to imply that centrists or the right-wing currently have any better proposals — as seen here in the US by the Biden administration’s policies for both legal and illegal migration. But such criticism is especially warranted because nativism is antithetical to social democracy’s egalitarian values. People do not simply choose to be born outside of wealthy countries in the global north, just as we in our western liberal democracies do not choose to be born outside of the wealthy 1%. Morally speaking, there is no reason as to why they should be denied opportunities to increase their quality of life, as there is no metaphysical difference between, say, a person suffering from poverty in the US and a person suffering from poverty in Haiti beyond the life lottery that determined their place of birth. This, of course, does not begin to address how countries in the global north have, in many cases, been the direct cause of poverty and instability in the global south that led to people migrating in the first place.
