{"id":20541,"date":"2025-08-24T16:41:13","date_gmt":"2025-08-24T16:41:13","guid":{"rendered":"https:\/\/www.europesays.com\/ie\/20541\/"},"modified":"2025-08-24T16:41:13","modified_gmt":"2025-08-24T16:41:13","slug":"central-bankers-at-jackson-hole-warn-growth-hinges-on-foreign-workers","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/ie\/20541\/","title":{"rendered":"Central bankers at Jackson Hole warn growth hinges on foreign workers"},"content":{"rendered":"

Central bankers<\/a> at this year\u2019s Jackson Hole Economic Symposium<\/a> warned that ageing populations and shrinking workforces will limit future growth unless countries welcome more foreign workers<\/a>. Leaders from Europe, Japan and the UK said migrant labour has already played a central role in stabilising their economies and will be critical for the decades ahead.<\/p>\n

Europe\u2019s reliance on migrant labour<\/strong><\/strong>
European Central Bank<\/a> President Christine Lagarde said that a rise in foreign-born workers after the pandemic allowed the euro area to keep growth steady while bringing inflation down. \u201cAlthough they represented only around 9 per cent of the total labour force in 2022, foreign workers have accounted for half of its growth over the past three years,\u201d she told the audience.<\/p>\n

She pointed to Germany, where GDP would be about six per cent lower without foreign workers, and Spain, where the rebound \u201cowes much\u201d to foreign labour. Lagarde said that the influx of migrant labour helped companies expand output to meet a surge in demand that followed pandemic stimulus, easing price pressures.<\/p>\n

She also noted that other factors contributed to resilience: a fall in inflation-adjusted wages, companies retaining staff instead of shedding jobs, and more elderly workers entering the labour force. Without older people joining in greater numbers, she said the euro area\u2019s unemployment rate would be 6.6 per cent instead of the current 6.3 per cent.<\/p>\n

Historically, she added, higher borrowing costs have often caused recessions in Europe. But during 2022 and 2023, as the ECB raised rates, foreign labour and other changes in participation helped prevent such a downturn. At the same time, she warned, \u201cMigration could, in principle, play a crucial role in easing labour shortages as native populations age. But political economy pressures may increasingly limit inflows.\u201d<\/p>\n

Japan faces sharp demographic pressures<\/strong><\/strong>
Bank of Japan<\/a> Governor Kazuo Ueda, who shared the Jackson Hole<\/a> panel with Lagarde, said Japan faces a similar trend. While foreign-born workers account for only about three per cent of Japan\u2019s workforce, they have made up half of the country\u2019s recent workforce growth since the pandemic.<\/p>\n

He stressed that participation among women and older people has risen but the scope for further gains is limited. \u201cFurther increases will surely require a broader discussion,\u201d Ueda remarked, signalling that Japan must consider immigration more seriously to offset its shrinking population.<\/p>\n

UK warns of future labour shortages<\/strong><\/strong>
Bank of England Governor Andrew Bailey added that the United Kingdom is also heading toward demographic strain. By 2040, about 40 per cent of the UK population is expected to be above working age, he said, making it increasingly difficult to sustain growth without migrant labour. He underlined that foreign workers will be essential to keeping the economy productive and stable.By the Numbers: Foreign Workers and Growth <\/p>\n