Leading German economists argue about how to regulate migration flows and employ unskilled foreigners
Without a significant influx of migrants, the German economy will miss out on 4.5 million workers in the next ten years. This will lead to a decline in average GDP growth from today's 1.5 percent to 0.5 percent per year, and by 2030, apparently, to stagnation, warns Deutsche Bank chief economist David Folkerts-Landau.
In an article titled 'Let Them Come!' published in the weekly Die Zeit, Folkerts-Landau emphasizes: 'Only through mass immigration will Germany be able to maintain its standard of living and its place among the three or four most important countries in the world in the long term.' Therefore, the costs of integrating migrants, the chief economist of Germany's largest bank is convinced, are 'a smart investment in the future.'
'Culturally diverse societies,' he writes, 'are more vibrant and socially flexible, more innovative, they show a greater willingness to change and adapt more easily. As a result, national economies in such countries exhibit greater social and economic mobility, which stimulates labor productivity.'
Germany now has a chance to 'cement its reputation as a global economic engine and in the long term once again become the scientific and cultural center it once was,' concludes David Folkerts-Landau.
The peculiarity of this article is that its author speaks of 'migrants' and 'immigration' and does not use the terms 'refugees' and 'political asylum.' As a result, he is to some extent stating the obvious. After all, in today's Germany with its aging population, there are practically no serious economists who would oppose large-scale recruitment of foreign labor. The only question is whom and how to attract.
Professor Axel Plünnecke, a leading expert on immigration, education and innovation at the Cologne Institute for Economic Research (IW), makes it unmistakably clear: 'Accepting refugees is primarily a humanitarian task.' Migrants from Syria, Afghanistan and Eritrea cannot yet contribute to solving the problem of labor shortages – first they need to learn German and in many cases improve their professional qualifications, the scientist warned at the presentation in Berlin of the latest report on the state of the skilled labor market.
And the situation on this market is worsening: currently, German companies need 164,000 workers with scientific and technical specialties. This is the highest level in three years. 'The labor shortage would be significantly higher today if Germany had not benefited from immigration in recent years,' emphasizes Professor Plünnecke. According to his data, the largest number of specialists came from Poland, Russia, India and Spain.
Professor Bernd Raffelhüschen of the University of Freiburg does not dispute that Germany needs migrants today. 'But it is the only country in the world for immigration that has no rules,' the scientist laments. He advocates for the adoption of an immigration law, which, in his words, would essentially be a law of restriction: only those 'who are needed' would be allowed into the country.
Already now, the expert explained in an interview with the dpa news agency, hundreds of thousands of unemployed people in Germany have no specialization. 'Now up to 1.5 million people will be added to them, of whom about 70 percent are also unskilled,' emphasizes Bernd Raffelhüschen and warns that their maintenance will require 'a large-scale tax increase.'
Here a clarification is needed. According to the German Federal Statistical Office (Destatis), among foreigners who applied for political asylum in Germany in the first half of 2015, 29 percent are children and adolescents under 18, and 51 percent are people aged 18 to 34. So the chances that these young people will learn German and manage to get an education are quite high.
The president of the Munich ifo Institute for Economic Research, Professor Hans-Werner Sinn, also advocates for a law regulating and limiting the influx of migrants. As for the current refugees, in the scientist's opinion, they are willing to work and pay taxes, but initially, due to lack of German language skills and qualifications, they will only be able to perform simple work. Therefore, wages in this segment will fall, which will primarily hurt other foreigners who came to Germany earlier: 'New migrants worsen the situation for previous migrants.'
True, throughout Germany since January 1, 2015, there is a minimum wage of 8.50 euros per hour (this was achieved by the Social Democrats, who are part of the ruling coalition). Professor Sinn, a longtime opponent of the minimum wage law, is convinced that the influx of refugees has made its adjustment simply inevitable. The scientist believes there are three options to solve the problem: 'Not extend the law to refugees. Pay subsidies to companies. Reduce the minimum wage nationwide.'
The head of the ifo institute advocates for the third option but also considers the second quite acceptable. The main thing is that refugees get jobs and thus begin to integrate into German society. The costs will in any case fall on the shoulders of taxpayers. 'The only question is whether we will pay subsidies to the working or fully support the unemployed,' Hans-Werner Sinn explained in an interview with the weekly Die Zeit.