/www.bloomberg.com/ By Will Edwards
Cary, North Carolina, Feb. 3 (Bloomberg) -- The U.S. gave Indian-born Vivek Wadhwa a chance in 1980. More than two decades later, he's made his mark on its economy.
``I'm an example of what happens when you bring skilled workers into the country,'' said Wadhwa, now 45 and a citizen. ``America is the world leader because we're an open society.''
After coming to the U.S. on a work visa as a Xerox Corp. computer programmer, he went on to create information systems for First Boston Inc. that are still used by large companies including Charles Schwab Corp.
Today, Wadhwa runs Relativity Technologies Inc., a softw are vendor in Cary, North Carolina, that employs 90 people at a time when 3.3 million Americans are seeking work. A report Friday may show a jobless rate of 6 percent, holding at an eight-year high.
``Just the fact that we hire from a diverse population helps our results,'' said Dennis Strigl, chief executive officer of Verizon Wireless Inc., the largest U.S. mobile-phone operator. ``If you look at the genealogy of the United States, this would be a pretty sad place if we didn't allow Italian immigrants, German immigrants, African immigrants.''
Germany, Japan and other nations that haven't been as receptive to young, skilled immigrants may lose competitive ground as their populations age and more jobs go unfilled, economists said. That means higher labor costs for companies and increasing tax burdens on individuals. Immigrants accounted for almost half the rise in the U.S. labor force from 1996 to 2000 and helped slow the rise in the average age.
``We have to seriously consider accepting foreigners,'' said Hiroshi Okuda, chairman of Toyota Motor Corp., Japan's largest automaker. He is also chairman of the Keidanren, or Japan Business Federation. ``Considering the needs of the nation, the door still isn't open enough.''
World Getting Older
Time is the enemy. For nations in Europe and Asia, plunging fertility rates mean their populations will age the fastest, creating the greatest need for replacement labor.
While the median age of the world's population is set to rise from 26.5 years in 2000 to 36.2 years in 2050, Japan's will rise by even more, from 41.2 to 53.1, according to projections by the United Nations Population Division.
There were 141,954 foreign-born people with work visas who entered Japan in 2001, up 9.3 percent from a year earlier, the Ministry of Justice said.
In Europe, the median age is forecast to rise from 37.7 to 49.5, as fertility rates there continue to drop. Immigration would help blunt the impact of the aging on national economies because immigrants tend to be younger and more mobile than native-born populations, economists said.
No Welcome
``This is the first time since the Industrial Revolution that these countries have had to manage secular declines in population,'' said Richard Cooper, a professor of international economics at Harvard University who has researched the economic effect of demographic change. ``This is a new ball game for them. But after much soul searching and grumbling, they will become more receptive to legal immigration.''
In Europe, net migration into the 15 nations that comprise the European Union fell from 5.2 million in the first half of the last decade to 3.0 million in the second.
Japan's population of 126.7 million is about two-fifths of the U.S. and includes a smaller percentage of foreign-born residents. Japan had 1.69 million registered foreigners at the end of 2000, according to its Ministry of Foreign Affairs. The U.S., with a population of 290 million, had about 28.4 million legal and illegal foreign-born people in the 2000 Census.
Dutch voters last May elected the Christian Democrats and the party of anti-immigration politician Pim Fortuyn, who had been gunned down days before the vote. In France, Jean-Marie Le Pen, leader of the anti-immigration National Front party, in April won 5.5 million votes in presidential elections, beating incumbent Prime Minister Lionel Jospin and moving to the second round of voting. He was ultimately defeated by Jacques Chirac.
In the Long Run
``If Europe wants to remain a rich region with growth potential, it needs to attract skilled immigrants, especially with the current demographic pressures,'' said Yves Gassot, head of Montpellier, France-based Idate, a telecommunications and technology research firm. ``In the current economic situation that need isn't really there, but in the long-run it is.''
In an attempt to fill more than 1 million skilled-job vacancies in Germany, which is already home to more than 7 million foreign residents, Chancellor Gerhard Schroeder pushed a bill through the Bundesrat last March that would have granted permanent residence to skilled foreign workers. Polls showed less than a quarter of Germans supported the law, Germany's highest court in December ruled its passage was illegal.
Thomas Dobernigg, management board member at Marseille- Kliniken AG, has run up against other barriers.
Skilled Jobs
The company, which employs 6,000 people at rehabilitation clinics and nursing homes in Germany, can't find enough skilled native Germans to fill nursing jobs. Dobernigg's efforts to bring in Czech nurses to fill the gap have been blocked by the refusal of some German states to accept their certificates.
``Not being able to fill these jobs is hindering our growth,'' he said.
Labor scarcity also tends to push up labor prices over the long run. That in turn reduces companies' demand for workers and boosts unemployment levels among young people. It constricts the tax base for government-sponsored pensions and raises the tax burdens on individuals and businesses.
While lower-skilled immigrants have been shown to take jobs away from native-born workers, those in medium- to high-skilled occupations complement the labor force, causing wages to rise, according to a working paper released by the Federal Reserve Bank of Atlanta last week. Imagine a doctor's office where the addition of a new specialist adds to the practice, making it able to draw more clients.
Texas Instruments
As was the case with Relativity's Wadhwa, higher-skilled immigrants can also help entrepreneurship flourish. Chinese and Indian engineers were running a quarter of Silicon Valley's high- technology businesses in 1998, accounting for more than $16.8 billion in sales and more than 58,000 jobs, a 1999 study by the Public Policy Institute of California found.
Dallas-based Texas Instruments Inc., the world's biggest maker of chips for cellular telephones, ``would be less competitive'' without its foreign-born workers, said Dan Larson, director of government relations for the company in Washington.
Electronic engineering graduates, on whom the company depends to design and make semiconductor chips, have been steadily declining in the U.S. at ``alarming rates,'' he said. Since peaking at about 25,000 in 1987, their numbers been cut in half. To fill its needs, the company brings in workers from around the world on temporary work visas.
``When you walk down the halls of TI in Dallas it looks like the United Nations,'' Larson said. ``We must have access to foreign nationals.''
Stay on the Job
Economists and demographers point out that immigration is only one part of the solution to the world's aging-workforce issue. Even with immigration's gains in the U.S., for example, the median age is still projected to rise from 35.5 to 40.7 over the next 50 years, according to U.N. forecasts.
Convincing older employees to stay on the job longer and drawing more women into the workforce would also help, they said.
``It's not going to be easy sailing,'' said David Coleman, professor of demography at Oxford University. ``But it's not an insurmountable problem.''