Refugees in Germany: the government’s refusal to let asylum seekers work is problematic

This article is part of a report which I drafted for a FinTech company based in the United Kingdom. It has been submitted in the month of August, which is why some facts might be outdated.

Out of all the countries on the European continent, Germany has stood out as being the most permissive when it comes to allowing refugees into the country. According to the Bundesamt für Migration und Flüchtlinge (Federal Office for Migration and Refugees) [1], Berlin has authorised over 1.6 million refugees to travel into Germany. The most prominent age groups (between January and May 2017) are under the age of 4 (22.3 per cent), 18-25 (20.1 per cent) and between age 25 and 30 (11.9 per cent). 62.2 per cent of new arrivals are male, 37.8 per cent are female. As of May this year, 25.8 per cent of refugees come from Syria, 10.7 per cent from Iraq and 8.4 per cent from Afghanistan.

The International Monetary Fund noted [2] this sharp rise in immigration from outside the European Union as follows:

“From 2010 to 2013, immigrants from the EU accounted for roughly two thirds of total net immigration in each year. In 2014, net immigration from within the EU and from outside of the EU was nearly equally strong and in 2015 net immigration from outside of the EU was much higher than from within.”

In 2016, the European Union sealed a deal with Turkey, regarding the flow of migrants coming from Syria, Iraq and Afghanistan. The Republic of Turkey has committed to a considerable reduction of  migrants to Europe, in return for financial support. As a result, only 360,000 people illegally entered the continent, compared to over 1.5 million in 2015 [3].

This large immigration raises the question of labour force integration of those who entered Germany. According to a report by the Institut für Arbeitsmarkt- und Berufsforschung (Institute for Employment Research) [4], only 6.2 per cent of refugees are in paid employment. The Institute also pointed out that the experience in demographics of the refugees and situation of integration are  similar to that of Sweden. It ambitiously points out that an employment rate of 50 per cent after five years would be possible to achieve.

However, Germany’s labour policy is making this market integration problematic. In October 2015, new restrictions were imposed, banning refugees from the labour market as long as they are in initial receptions centres. After 6 months, the refugees should be allowed to leave the centres, however regulations prohibit refugees from safe countries from leaving the centres as long as they remain in Germany. After up to 6 months, both categories of refugees are allowed to ask for a work permit, which is only granted if the person can prove that there is a realistic job offer. [5] Self-employment necessitates a regular residence title, which is not granted by the asylum seeker’s residence permit. Refugees are therefore banned from being self-employed. [6] In theory, this means that access to the labour market is not prohibited for refugees. However, from every observable standpoint, including that of the number of refugees in work, there is a quasi-ban on refugee employment.

46 per cent of those seeking asylum in Germany have a degree from a grammar school or a university degree. [7] According to the OECD, the potential of most migrants is generally “underused”. It points to language acquisition and the certification of foreign diplomas as major factors of difficulty for the labour force integration. Regardless, as soon as migrants are allowed to enter the labour market, their employment average in OECD member states is above 60 per cent.[8]

The Bundesvereinigung der Deutschen Arbeitgeberverbände (Federal Association of German Employer Organisations) calls for [9] an easement of employment mechanisms for refugees, for instance by facilitating access to internships and allowing part-time work.

When taking into account the economic advantages created through integration of refugees into the workforce, added by the call of employers association and international organisations to do so, it seems like the government’s refusal is purely political. However, integration of refugees and strengthening social cohesion are  only possible through an effective labour market integration.

[1] Aktuelle Zahlen zu Asyl, Mai 2017, Bundesamt für Migration und Flüchtlinge

[2] IMF Working Paper: The Labor Market performance of Immigrants in Germany, January 2016, Robert C. M. Beyer, page 8

[3] Migrant flows to EU eased after Turkey deal, ‘front line’ moved to Italy, 12/06/2016 Reuters

[4] Institut für Arbeitsmark- und Berufsforschung, Aktuelle Berichte Arbeitsmarktintegration von Geflüchteten in Deutschland: Der Stand zum Jahresbeginn 2017, 04/2017, Herbert Brücker, Andreas Hauptmann and Steffen Sirries

[5] Section 61(2) Asylum Act

[6] Section 21(6) Residence Act

[7] Bildungsniveau der FlüchtlingeHochqualifiziert – aber nicht ausgebildet, (ARD state channel), 22/08/2016, Ingrid Bertram

[8] Migration and Policy Debates: How can migrants’ skills be put to use?, OECD, December 2014

[9] Die Integration von Flüchtlingen in den Arbeitsmarkt erleichternWeiterer Handlungsbedarf nach dem Integrationsgesetz, Bundesvereinigung der Deutschen Arbeitgeberverbände$file/13-Punkte-Fluechtlinge.pdf

About Bill Wirtz

My name is Bill, I'm from Luxembourg and I write about the virtues of a free society. I favour individual and economic freedom and I believe in the capabilities people can develop when they have to take their own responsibilities.

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