Guest Worker Program: The Solution To The Immigration Issue?

With ageing societies and accumulation of capital, labor shortages have come to stay. Since many countries wish to limit immigration in view of ethnic issues and public opinion, the Guest Worker Program can serve as an acceptable means for providing labor without actually allowing them to settle down in the country inviting them.
Guest Worker Program: The Solution to the Immigration Issue?
Source - Wikimedia Commons (https://commons.wikimedia.org/wiki/File%3AThe_Foreign_Workers_in_Britain%2C_1914-1918_Q27791.jpg)

In the decades during and immediately following the Second World War, most developed countries experienced a generation of baby-boomers – a term coined to denote the cohort that was born during a phase of rapid rise in birth rate experienced by developed countries. Today, there is a reversal of this baby boom, with a huge impact on the labor force and dependency ration. The demographic dividend has finally turned into the demographic decay.

Falling Fertility Rates & Labor Shortages

While their economies of developed countries expand, in most of them, the fertility rates are not exactly keeping up. With wealthier people becoming

more and more individualistic, marriages are no more made in heaven and children no more an inevitable gift of god. As a result, the people have more resources, but the number of people available in the work force is not going up. With rising GDPs, the population of developed countries first becomes stabilized, then stagnates for a while and then finally starts falling.

While the economic enterprises produce surplus that adds to capital formation, this growth of capital is not complemented by a growth in labor, leading thereby to a situation of 'capital surplus with labor shortage'. When this situation becomes extreme, like in Japan today, it can have a significant impact with economic growth slowing down. As many would know, the labor force in Japan has been falling since 2002, and the number of aged dependent population who consume a lot more in terms of health care and other support services keeps escalating.

The ageing of society is a big challenge for all societies of the developed world. The shortage of labor can be countered by raising fertility rates or by allowing immigration. Practically, no country or government has really been

able to influence the fertility rates positively with any of the incentives, so it is an option which generally works nowhere. Thus we are left with immigration as the only feasible solution to this issue.

Role of Immigrants in Economic Growth

The economic history of the world demonstrates that immigrants have been one of the greatest recipes for economic growth. Earlier it used to be immigration from rural to urban areas. Nowadays, for countries like US, it is from other countries. Selective immigration of talented workers allows your country to gain in terms of human resource, without paying any costs for its development, so there is generally little debate about its efficiency. But, for jobs involving lesser skills, there are many issues that negate the benefits. One is the resultant competition and unemployment of our less qualified citizens. Other issues include ethnic balance, culture and demography.

When it is clear that there is labor shortage in a particular sector which can be addressed only by allowing immigration, like nursing staff in US and UK, the best solution is to allow temporary immigration, which is also called "Guest worker program'. It allows immigration of individuals for a certain period of time, with an obligation to return. Generally such labor gets lesser wages too, so the economy gains their labor at less than its value. Still these individuals come because of the lack of proper opportunities in their own countries. Once they complete their tenure, they return, so the side effects of immigration are far less in this case.

It is a win-win situation for everyone.



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