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The United States and Europe face a host of common economic and security challenges that are well-known and well-debated: The risk of future terrorist attacks, the effects of global warming, exorbitant gas and food prices and the global credit crunch are recognized as transnational threats for which transatlantic cooperation will be critical.

A recent article by Russell Shorto in TheNew York Times Magazine entitled "No Babies," however, sets forth one of those rare problems that Europe, but not the United States, is facing: dangerously low birth rates. How Europe goes about solving this demographic challenge will reveal a great deal about whether it is ready to embrace diversity, and thus whether it is ready to be a true 21st century leader.

Contrary to the commonplace notion of a worldwide "population bomb," European women just aren't having enough children to replace the population in many EU countries. The current "replacement rate"—or the average number of births per woman needed for a country's present population to remain stable—is 2.1. Southern Europe and Eastern Europe are struggling to attain birthrates of 1.3, which, as Shorto points out, would lead to a population being halved in just 45 years. Northern Europe and Western Europe are doing a bit better but are also struggling. Scandinavian countries, which have among the highest birthrates in Europe, fall short at around 1.8.

The reasons for such low birthrates in Europe are still not entirely understood. However, leading demographers argue that the traditional societal structure—where wives don't participate in high numbers in the workforce and husbands don't participate heavily in child care—contributes to low birthrates. Why? Because women who are expected to exit the workforce when they have children delay having them and/or have fewer, and women who don't expect their partners to share the load in raising children are less motivated to have them.

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Economic incentives and enlightened social programs help but haven't been enough to reverse these demographic trends. Scandinavian societies with generous daycare support, maternal and paternal leave and other family-friendly policies still aren't able to reach a population replacement level. And natalist projects, or direct payments to families that have children, have been proliferating from Italy to the Netherlands, but these countries still have birthrates that keep them on the path of population decline.

The economic consequences are dire. The number of working-age citizens throughout Europe is decreasing, while those at retirement age are skyrocketing, leaving too few to pay into the generous welfare states found throughout Europe, where it's not unusual to retire in your fifties. Add to this longer life spans, and you have a recipe for disaster.

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According to one U.N. prediction, Germany will need over 180 million new immigrants by 2050 just to keep its current ratio of workers to pensioners. Other European countries could face similar needs.

Fortunately, as Shorto notes, the United States isn't faced with the same demographic challenge. Last year, our fertility rate hit 2.1, higher than anywhere else in the developed world. As with the Europeans, the reasons aren't entirely clear. One can speculate that immigration, our religious traditions and a flexible job market, which gives women greater opportunities to re-enter the workforce after having children, all help. But if the United States were to face similar demographic challenges in the future, our history as a country of immigrants and success in integrating diverse workforces would likely help blunt the fallout.

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And this is the larger point: While there are certainly many things we can learn from our transatlantic partners, how to embrace diversity is something Europe can learn from the United States. Unfortunately, Europe doesn't seem ready for the challenge. As Shorto aptly puts it, in Europe "immigration already touches all sorts of raw nerves, forcing debates about cultural identity, citizenship tests, national canons, terrorism and tolerance, religious versus secular values." The integration of the children and grandchildren of immigrants in Europe causes similar anxiety among the population.

At the heart of the problem is that European nations don't really see themselves as countries of immigration (which, in actuality, they have been for quite some time), and certainly haven't reached a point where you can "look like anything," and still be considered European. Germany, for example, only recently amended its laws to allow non-ethnic Germans born in the country to receive citizenship.

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Of course, immigrant and minority groups have their share of problems being accepted in American society. But despite our tortured history of race and ethnicity, as a society we've become comfortable with the idea that Americans come in all colors, shapes and sizes.

If Europeans wish to stem the population decline and maintain their leadership status in the 21st century, they will have to do a better job at managing diversity. In particular, Europe must step up its efforts in attracting and keeping highly-skilled labor from around the world, which by demographic necessity must include individuals of color. According to current talent indexes, the United States and Canada are at or near the top of the list of countries popular for highly-skilled immigrants.

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Certainly the breadth of our economies and the openness of our labor markets are reasons the United States and Canada are magnets for global talent. But another reason is likely because both countries have accepted their status as immigrant nations and are places in which many immigrants feel they can truly belong. Creating a more welcoming environment for immigrants and their children won't fully solve Europe's baby problem, but it would be a good start.

Spencer P. Boyer is Director of International Law and Diplomacy at the Center for American Progress, a Washington-based think tank.

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Jesse Schwartz is a researcher at the Center for American Progress and a graduate student at the Maxwell School of Citizenship and Public Affairs, Syracuse University.