Europe is rich in migrants, so why isn’t it rich?
“Europe Has Fallen Behind the U.S. and China. Can It Catch Up?” (New York Times, June 5):
Europe’s share of the global economy is shrinking, and fears are deepening that the continent can no longer keep up with the United States and China. … Beijing and Washington are funneling hundreds of billions of dollars into expanding their own semiconductor, alternative energy and electric car industries, and upending the world’s free trade regime
The secret to wealth is government spending and European governments aren’t big enough.
Private investment lags as well. Large corporations, for example, invested 60 percent less in 2022 than their American counterparts, and grew at two-thirds the pace, according to a report by the McKinsey Global Institute. As for per-capita income, it is on average 27 percent lower than in the United States. And productivity growth is slower than other major economies, while energy prices are much higher.
The journalists ask us to contemplate an unimaginable horrible scenario:
Imagine if every state in America had national sovereignty and there were only limited federal power to raise money to fund things like the military.
In other words, imagine if the U.S. Constitution were followed and the federal government’s powers were limited to those spelled out in the document.
The news isn’t all bad:
For more than a decade, Europe has been falling behind on several measures of competitiveness, including capital investments, research and development, and productivity growth. But it is a world leader in reducing emissions, limiting income inequality and expanding social mobility, according to McKinsey.
Europe could be leading the leaders in leading even more if governments would hire leading consultants at McKinsey more frequently. Speaking of leaders, the leaders in journalism don’t ask what seems like an obvious question: Science proves that low-skill immigrants make societies rich. Europe is rich in low-skill immigrants, while China is impoverished in low-skill immigrants. “China has the smallest number of international migrants of any major country in the world. Compare its 0.1% of immigrants with near 14% in the U.S. and 18% in Germany.” (Texas A&M, which also notes that immigrants are “very productive”). Shouldn’t Europe’s economic growth be higher than in the U.S. and China?
The NYT article doesn’t mention immigration, except to point out that only a “far-right” political party could question the wisdom of open borders.
Separately, I wonder what would happen if we subtracted out NVIDIA, Facebook, Apple, Google, and Microsoft from the U.S. economy. Maybe without Big Tech, the U.S. and Europe would be roughly comparable.
Speaking of the U.S. economy, here’s a chart from zerohedge showing that the number of native-born workers in the U.S. is unchanged compared to 2018:
To find the promised economic enrichment from the presence of migrants we would have to look at the extent to which real wages for the native-born have increased. If we adjust for inflation under the old formula, real wages are likely lower than in 2018. That’s certainly true here in Palm Beach County, Florida.
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