'Migrant labour critical for global recovery': Central bankers at Jackson Hole symposium
Speaking at the Jackson Hole symposium in Wyoming on August 23, they said the structural shift in labour markets demands solutions beyond monetary policy.
- Aug 24, 2025,
- Updated Aug 24, 2025 7:54 PM IST
Top central bankers warned that ageing populations and worker shortages in major developed economies are threatening long-term growth and complicating inflation control. Speaking at the Jackson Hole symposium in Wyoming on August 23, they said the structural shift in labour markets demands solutions beyond monetary policy.
Speaking on a panel focused on labour market transitions, Bank of Japan Governor Kazuo Ueda called labour shortages one of Japan's "most pressing economic issues." “Barring a major negative demand shock, the labor market is expected to remain tight and continue to exert upward pressure on wages,” he said.
European Central Bank President Christine Lagarde highlighted how migrant workers helped Europe balance growth and inflation after the pandemic. “Although they represented only around 9 per cent of the total labour force in 2022, foreign workers have accounted for half of its growth over the past three years,” she said.
Bank of England Governor Andrew Bailey flagged “acute” challenges in the UK, citing reduced labour force participation and weak growth since the pandemic. He warned that by 2040, 40% of the UK’s population will be older than the standard working age.
Central bankers underlined the critical role of migrant labour in stabilising labour markets. Ueda noted that despite making up only 3% of Japan’s workforce, foreign workers drove over half of its recent labour force growth.
Lagarde pointed to Germany, where GDP would be about 6% lower without foreign workers, and Spain, where economic rebound “owes much” to migrant labour. She said the post-pandemic influx enabled companies to scale production and ease inflationary pressures.
The symposium, hosted by the Federal Reserve Bank of Kansas City, was themed “Labour Markets in Transition: Demographics, Productivity, and Macroeconomic Policy.” Policymakers agreed that ageing populations and declining birth rates pose deep, structural risks that can’t be addressed through interest rate tweaks alone.
Despite immigration’s political sensitivities, the central bankers emphasized its economic urgency. Europe could lose millions of working-age people by 2040, they said, intensifying pressure on productivity and public finances.
Top central bankers warned that ageing populations and worker shortages in major developed economies are threatening long-term growth and complicating inflation control. Speaking at the Jackson Hole symposium in Wyoming on August 23, they said the structural shift in labour markets demands solutions beyond monetary policy.
Speaking on a panel focused on labour market transitions, Bank of Japan Governor Kazuo Ueda called labour shortages one of Japan's "most pressing economic issues." “Barring a major negative demand shock, the labor market is expected to remain tight and continue to exert upward pressure on wages,” he said.
European Central Bank President Christine Lagarde highlighted how migrant workers helped Europe balance growth and inflation after the pandemic. “Although they represented only around 9 per cent of the total labour force in 2022, foreign workers have accounted for half of its growth over the past three years,” she said.
Bank of England Governor Andrew Bailey flagged “acute” challenges in the UK, citing reduced labour force participation and weak growth since the pandemic. He warned that by 2040, 40% of the UK’s population will be older than the standard working age.
Central bankers underlined the critical role of migrant labour in stabilising labour markets. Ueda noted that despite making up only 3% of Japan’s workforce, foreign workers drove over half of its recent labour force growth.
Lagarde pointed to Germany, where GDP would be about 6% lower without foreign workers, and Spain, where economic rebound “owes much” to migrant labour. She said the post-pandemic influx enabled companies to scale production and ease inflationary pressures.
The symposium, hosted by the Federal Reserve Bank of Kansas City, was themed “Labour Markets in Transition: Demographics, Productivity, and Macroeconomic Policy.” Policymakers agreed that ageing populations and declining birth rates pose deep, structural risks that can’t be addressed through interest rate tweaks alone.
Despite immigration’s political sensitivities, the central bankers emphasized its economic urgency. Europe could lose millions of working-age people by 2040, they said, intensifying pressure on productivity and public finances.