Newcomers one of the solutions to the need for labour

“Migration is only one of the solutions to the coming need for labour. It helps, but does not solve the problem,” says Timothy Heleniak, senior researcher at Nordregio. Based in central Stockholm, Nordregio s a Nordic and European research centre focusing on regional development and planning. 

It was founded after an initiative from the Nordic Council of Ministers and does research on issues like demography, rural development, city planning and sustainable development, regional innovation and green growth.

The same day we do our interview, the Swedish population surpasses ten million. Immigration has been the main driver behind the increase in the latest decades 

“Ten million is a good number, but it is important to keep a continuing slow growth. Not least to get more young people, since Sweden like the other Nordic countries have an ageing population. This development is not accelerating as much as in many other countries, but our population is definitely ageing. This will be an issue in the future, both in terms of labour but also in terms of who will be looking after the ageing population,” says Timothy Heleniak, an American with broad international research experience.

Nordregio is based in a beautiful old house at Skeppsholmen in the middle of Stockholm. The winter sun is reflected in the surrounding waters, on the other side you can glimpse the royal palace. But when Timothy Heleniak presents is various population development scenarios the view is soon forgotten. If Sweden wanted to keep today’s support ratio by 2080 with the help of immigration, the country would need around 40 million immigrants. Similar scenarios exist for the other countries.

“It is a controversial scenario, and in reality we couldn’t receive that many people,” says Timothy Heleniak.

He and his colleagues have just finished a project commissioned by the Nordic Council of Ministers’ working group ‘Demography and welfare’. They have studied the demographic development and linked it to integration and refugees. What are the chances for integrating the newcomers into jobs and what are the obstacles, especially in rural areas? They present different scenarios to illustrate the future population growth. If Sweden had stopped immigration in 1970, the population would be eight million today.

On average, women In the Nordic countries give birth to two children, enough to keep the population level. But the problem with this scenario is that the population is ageing, which means the support ratio increases while the labour force shrinks. Other European countries, not least in Eastern and Southern Europe, have bigger problems linked to ageing populations than the Nordics, since women there have fewer children and some countries have stopped refugees coming in out of principle.

Tricky balance

“Trying to explain the need for immigration in the face of the population’s fear for the unknown is a tricky balancing act for politicians. In many countries it seems that it is easier to sell the idea of building walls than the need for more citizens,” says Timothy Heleniak.

In recent years Sweden and Norway in particular have welcomed a larger amount of refugees than earlier. From a demographic and labour market perspective this represents both an opportunity and a great challenge, says Timothy Heleniak. The arrivals are often young and of fertile age, which helps making the population younger. 

“This is something new for the Nordic countries and can represent both new ideas and an addition to the labour force,” he says.

Many sparsely populated municipalities also welcome the newcomers and view them as a way to to tackle the population development and lack of labour. In Finland, which last year had the lowest birth rate since 1917, there is a general agreement that the country needs foreign labour in order to manage the shrinking and ageing population in the countryside, according to Nordregio. 

At the same time it is imperative that the newcomers learn the language as quickly as possible and are integrated into the labour market and the rest of society. It is also important that the entire family is integrated, since the Nordic countries have a strong tradition of both men and women working. 

So far integrating newcomers into the Swedish labour market has not worked particularly well.  Nordregio News 3/16 refers to a fresh OECD report (2016) which shows that just 22 percent of men are working or otherwise occupied after two years. For women the number is eight percent, despite the stated political aim of getting newcomers into jobs or education after two years.

“Integration is not only about strengthening the labour market, but also get the arrivals to become active citizens. That way we can learn from each other,” he says.

Sparsely populated areas in greatest need

Until the autumn of 2015 most newcomers have settled in and around bigger cities, but it is mainly sparsely populated areas which need the most labour. This development is set to accelerate. Nordregio has worked with a range of projects across the Nordic region to see how refugees can be integrated and strengthen the labour market. One of the municipalities they have been visiting is Krokom in Jämtland county, one of the best  municipalities in the country when it comes to creating jobs for their newly arrived immigrants.

“This is a good example on how integration coordinators can work with the support of political decisions and an active civil society. They need new people, they have integrated them and have managed to make many newcomers stay,” says Timothy Heleniak.

It is also crucial to develop methods for validation, he says. What does the newcomer know and how can that skill be matched with the needs in the labour market? How can a doctor from Afghanistan use his skills without starting his training from scratch?

He also points out that measures to solve the need for labour in sparsely populated areas must be targeted at many areas. It is not enough to fill the needs with newcomers. You also need to make sure young people will want to stay. But closing borders, building walls and returning to life like it was before labour and refugee immigration is not a solution to the demographic challenges and the growing need for labour.

“In my opinion societies benefit from becoming more multicultural. Many people are on the move, that door is open can no longer be closed,” says Timothy Heleniak. 

The Nordic region is growing 

Since 1990 the Nordic countries’ populations have grown by 15 percent to a total of 26.5 million people, mainly though immigration. 

The largest group of people born abroad live in Sweden, 17.1 percent, while Norway has 13.8 percent and Finland has 5.4 percent. Most of them have moved to big city regions, while many towns and sparsely populated areas struggle with a shrinking and ageing population. Another factor is the many young people who leave the countryside for the larger cities.