Jun 25, 2017 - Economy

Migrants, big cities, and our direst problems

Lazaro Gamio / Axios

Our age is one big contradiction:

  • Around the world, people are flocking to big cities. But we are abandoning other cities — our rust belts and rural towns.
  • The developed world — the number of Europeans, Japanese and Americans — is shrinking and aging. But Africa's population is doubling and young.
  • We face a potential jobless future because of automation; but we have an acute current shortage of workers.

And these are not mere statistical curiosities:

  • Alienation in rust belts and secondary cities underlies the anti-establishment wave roiling the U.S. and Europe.
  • The cost of supporting and caring for our growing elderly populations could overwhelm state budgets.
  • Chaos and worsened political instability could erupt in the gap before we fully adjust to vast automation.

In a NYT op-ed today, Kai-Fu Lee, the CEO of Sinovation, a venture capital firm, writes that we will have no choice but a gargantuan transfer of wealth from rich individuals and nations to the poor. But Jose Lobo, a professor at the Santa Fe Institute, told me that things that look like enormous problems may actually be answers.

In that vein, Lobo said:

  • Migration, such as the massive flow of Middle Eastern, Afghan and African migrants into Europe starting in 2015, should be embraced as a large part of the solution to a fast-shrinking work force, he said. Until now viewed as an acute crisis, they are actually a way to have the taxes to support European pensions. "We are going to have less Spaniards, less Russians, less Italians. But migrants tend to be young, and to have babies," Lobo said.
  • Urbanization — the historical shift of the planet's population to big cities — could result in a massive reduction in poverty. We spend much time attempting to "save" our rust belt towns and cities, and to help prop up their continued population level. But these people are much more likely to obtain reasonable jobs and services in bigger, prosperous cities (Lobo cites this 2015 paper by World Bank economist Paul Romer).

Bottom line: In Lobo's scenario, Africa's over-population problem becomes a solution to Europe's and Japan's depopulation; and the ultra-massive growth of cities becomes a poverty alleviation program.

Go deeper