Exodus of Workers From Continent Reverses Old Patterns
WSJ: Soon after Spain's real-estate bust put Andrés Velarde and María Palencia out of work, the young architects gathered their drafting materials and moved 5,000 miles to Brazil—drawn by a hope, but no promise, of employment.
Within five weeks the Spanish couple had jobs in the midst of a bonanza. The South American country was expanding its low-income housing program and scrambling to build stadiums, airport terminals and hotels for the 2014 World Cup of soccer and 2016 Olympic Games.
"The crisis back home is distant news," said Mr. Velarde, eight months into his new job in Rio de Janeiro. "In Brazil, there's growth and optimism, a joyful atmosphere totally at odds with what there is in Europe."
Economic distress is driving tens of thousands of skilled professionals from Europe, and many are being lured to thriving former European colonies in Latin America and Africa, reversing well-worn migration patterns. Asia and Australia, as well as the U.S. and Canada, are absorbing others leaving the troubled euro zone.
At the same time, an influx of Third World immigrants whose labor helped fuel Europe's growth over the past decade is subsiding. Hundreds of thousands of them, including some white-collar professionals, have been returning home.
The exodus is raising concern about a potential long-term cost of the economic crisis—a talent drain that could hinder the euro zone's weakest economies as they struggle to climb out of recession.
"This amounts to a hemorrhaging of highly educated people—the very people they'll need if they are to take off when circumstances get better," said Demetrios Papademetriou, president of the nonprofit Migration Policy Institute in Washington.
The toll is mounting in Spain and Portugal, countries losing skilled workers to their former colonies. More people are emigrating from Spain, Portugal, Ireland, Slovenia and Cyprus than are moving to those countries, and in Greece officials worry that a similar trend is taking hold there. The European Union has no overall data on migration, but concern about the impact of severe budget cuts is growing in the U.K., France, Germany and Italy, all grappling with losses of top research talent.
King Juan Carlos highlighted Spain's losses with a poignant remark while handing out scholarships to young Spaniards for postgraduate study abroad.
"I sincerely hope and wish that when your time comes to return home there will be more jobs for you and that you can stay here," he told the 121 assembled winners in March. "We really need you in Spain."
During a prosperous decade that ended in 2008, Spain welcomed one of the world's biggest waves of immigrants. Foreign workers poured in at a rate of 500,000 per year to boost its construction and service industries, making the country Europe's prime destination for new arrivals.
Last year, with unemployment topping 20%, Spain became a net exporter of people for the first time since 1990, according to Spain's National Statistics Institute. Some 55,626 more people left the country in the first nine months of last year than arrived, the institute said.
Spaniards are scattering to better-off European countries and beyond, particularly to Latin America. Of the estimated 37,000 Spanish citizens who left the country in 2010, nearly 60% emigrated to countries outside the European Union.
At least 100,000 of Portugal's 11 million citizens moved abroad in 2011, after a decade of anemic growth and rising debt in Western Europe's poorest nation. In Africa, Angola's burgeoning economy has absorbed 70,000 Portuguese since 2003, according to the government-backed Emigration Observatory in Lisbon.
The number of Portuguese in Brazil on work-related visas shot up by 52,000 in the 18 months through June 2011.
Brazil is profiting from Europe's decline. It is wooing foreign engineers and other construction-related specialists to help carry out housing, energy and infrastructure projects for which the government has budgeted $500 billion through 2014, more than double Portugal's annual gross domestic product.
Despite a few hiccups at the worst of the global crisis, and a similar slowdown now amid the renewed woes in Europe, Latin America's biggest economy has grown by more than 4% per year for most of the past decade, driven by commodity exports to China and expansion of its own vast consumer base.
Brazil in 2020 will need as many as 1.1 million engineers, roughly twice as many as it has now, according to a study by a state-funded research institute.
"We can't train people fast enough," said Paulo Safade Simão, president of a construction industry group.
In the first six months of last year alone, the number of foreign residents in Brazil on temporary work and related visas rose by nearly half, to 1.46 million people, nearly 330,000 of them from Portugal and 60,000 from Spain, according to the Justice Ministry.
Luis Guedes, a 29-year-old Portuguese engineer for a builder in northern Portugal, packed his bags in April and flew to Rio de Janeiro. After one European construction job wrapped up last year, he worried whether others would follow.
"I preferred the uncertainty of looking for a job in a growing market than the uncertainty of staying in an economy you know has many troubles," said Mr. Guedes, who through the cousin of a friend from home landed a job overseeing maintenance and supply programs for a company with contracts at Rio's bayside docks.
Brazil has been a magnet for most of its history—a promising new land that, like the U.S., draws migrants from all over the world. For much of the second half of the 20th century, though, a volatile economy led many Brazilians to seek better lives abroad.
In addition to blue-collar workers happy to do the manual labor spurned by Americans and Europeans as those economies soared, Brazil suffered a brain drain of professionals.
By the end of the 1990s, Spain and Portugal had climbed out of poverty, adopted the euro currency and were importing immigrant labor. The periodic mass migrations of low-skilled Spanish and Portuguese workers to Northern Europe and Latin America, most recently in the 1950s and '60s, were history.
With Europe's crisis and Brazil's boom, migration patterns are shifting again.
Brazilians are coming home in epic numbers. The government estimates that nearly half the country's émigrés have returned—from more than 3 million Brazilians living abroad in 2007 to fewer than 2 million today.
While many coming home are blue-collar workers, the reversal has brought an inversion in the flow of intellectual capital, too. Starved for manpower and know-how in many professions needed to help its growth reach full potential, Brazil's labor market is devouring its own white-collar migrants upon their return.
Giovanni Peduto, a 35-year-old executive in São Paulo, came home in 2009 after three years working in Madrid for Prisa SA, a Spanish media company.
When the global crisis in 2008 prompted Prisa to slash its investment forecast in Spain, Mr. Peduto persuaded the company to let him move back to Brazil, where the forecasts were promising enough for him to launch an educational consulting start-up for the group. After two years, the start-up was earning millions of dollars and Mr. Peduto was recruited by American language software company Rosetta Stone Inc. to head its Brazil unit.
"The market for talent is crazy," he said, citing repeated calls from headhunters who would hire him away from his new job. "I now have to pay an English-speaking secretary what some executives in Brazil were making just a few years ago."
The Migration Policy Institute's Mr. Papademetriou said the trans-Atlantic movement is part of a broader global transfer of skills to dynamic emerging economies.
"It will make a dramatic difference in the pace and depth of their growth," he said. "It's a gift to them."
Oriol Flaquer, who holds a master's in business administration, fits the profile of Spain's new professional emigrant—young, multilingual, deeply pessimistic about Europe and ready to move where the action is.
"Europe is going to need at least a decade to recover, if it recovers," the 32-year-old industrial engineer said from Cuernavaca, Mexico, after arriving last year to work for an international digital-security company. "Never, in my view, will Europe have the same economic weight it had in the past."
More people are expected to leave Spain in the near future. Its economy is growing at an annual rate of less than 1%, and some economists expect it to slip back into recession. A recent survey by Randstad, an international human resources company, found that 62% of Spaniards out of a job are willing to leave the country to get one.
To many in Spain, the new emigration is a symbol of national failure. Concha Caballero, a columnist writing in El País, called the emigrants "a new wave of exiles" whose departure bleeds the country of people who would otherwise create wealth, start companies and pay taxes.
Spanish officials have argued that emigration should be viewed as a short-term safety valve, not a permanent loss for the homeland.
José Ramón Pin, vice rector of the IESE business school in Madrid, said emigrants will benefit Spain "if they return with more knowledge and experience." But in a prolonged downturn, he added, "the question is: Will they return?"
Political leaders in the euro zone are divided on how to confront that uncertainty.
Spain and Portugal encourage job seekers to leave. Spain last year signed an agreement with Germany under which German companies will offer jobs in Germany to out-of-work Spaniards, mainly in engineering, health care and tourism.
Portuguese Prime Minister Pedro Passos Coelho last month urged teachers who can't find jobs in Portugal to move to one of its former colonies.
In Greece, on the other hand, Finance Minister Evangelos Venizelos called last month for a campaign to discourage emigration. Ireland cut sales taxes for the tourism industry, trying to spur hiring and keep workers from fleeing. Italy gave a "counter-exodus" tax break for people under 40 who return to Italy after two years' work or study abroad.
But Europe's debt crisis puts those governments under far greater pressure to raise taxes, trim budgets and slash payrolls to hold down borrowing costs—a recipe that weighs against growth.
Spain's debt soared after its speculative real-estate bubble burst in 2008, throwing the economy into recession. Eight in 10 of the 1.5 million construction jobs added during the previous 12 years vanished; at least 700,000 of the homes built in the last three of those years stand unsold.
Mr. Velarde and Ms. Palencia had the misfortune of finishing Polytechnic University of Madrid's architecture program the year of the collapse. The bubble had swollen the ranks of their profession past 50,000, or one licensed architect for every 919 Spanish residents. (The U.S., has one for every 2,999 residents.)
The couple managed to land a series of six-month contracts at a Madrid studio before they were let go in late 2010, joining 20,000 architects without work.
Like many others who came of age in Spain's prosperous years, however, they didn't feel trapped by its borders. Their studies had included stints in Brazil, Denmark and Iceland, and both speak English and Portuguese. Brazil's building frenzy, as remarkable as Spain's collapse, looked inviting.
Settling into jobs at separate firms last spring, the 28-year-olds thought of Brazil as a fleeting adventure: Stay a year, save a chunk of their $1,700 monthly salaries, then think about returning to Spain.
"In the past few months this idea has been changing," Mr. Velarde said by telephone from the spacious apartment he and Ms. Palencia share in Rio de Janeiro. "We're seeing how we can develop our careers here. We have some medium-term projects. We're not setting deadlines."
Both are designing apartment complexes and other projects for a Brazilian building industry that has added 1.8 million jobs since 2005 and reported 11.6% revenue growth in 2010.
From back home, meanwhile, comes news of scattering classmates. Ms. Palencia counts 20 who left last year to work abroad—in Brazil, China, Japan, Chile, Peru, the Netherlands, Belgium, Germany and Britain.
"Many people of our generation will not return to Spain," she said.
"It's personally enriching for us, but not good for the country," Mr. Velarde added, reflecting on the exodus. "Spain invested a lot to educate us. We should be working there. But we had to find opportunities. We had to make the best of the crisis."
—Patricia Kowsmann, Carla Canivete, Alkman Granitsas and Stelios Bouras contributed to this article.
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