Germany’s Immigration Challenge
John Mauldin
This immigration crisis in Europe is a big deal, and it’s a bigger deal for Germany than for any other European country. Germany is directly in the firing line, both geographically and in terms of how many of the migrants want to settle there. Nearly 40% of migrants choose Germany as their preferred final destination, while the only other nation that is chosen by more than 10% of migrants is Hungary, at 18%.
Daniel Stelter is a very wired German economist and business thinker. He wrote to me a couple days ago, said he had read my remarks on Germany and the immigration crisis in last week’s Thoughts from the Frontline, and recommended to my attention a couple of articles he had just written on the issue. They are today’s Outside the Box.
In his note to me, Daniel says:
I doubt that it will work out as politicians hope. In theory we agree: well-educated people come to Germany to help us deal with the demographic crisis we face. The reality is that a big part of the immigrants will not be able to fulfill these hopes as they are illiterate, etc. We would have to invest heavily to make this happen, but politicians shy away from doing so. I have summarized what the scenarios are and what we would have to do to make it happen in this two-part comment for the Globalist, which you might want to have a look at. To be clear: Germany looks like ending up with more problems than less if we don’t change gears fast.
Please note that Stelter is not anti-immigration. His first piece below, “Germany’s Immigration Challenge,” enumerates the difficulties to be faced if Germany is to greatly increase immigration and lays bare a number of misconceptions about Germany’s ability to do so; but he doesn’t stop there. In the second piece, “Germany: A 10-Point Plan to Deal with the Immigration Challenge,” he thoroughly details what it would actually take for Germany to sustainably integrate the current wave of immigrants. This is a no-nonsense, no-holds-barred effort to confront the immigration crisis.
Whether or not you think Stelter’s scheme can be realized, this (or something much like it) is what it will take to get the job done, not just in Germany but throughout Europe. This is going to be a costly endeavor no matter what, and it is going to happen as services and retirement payments are cut due to strained budgets. Which is going to strai n nerves. This is the type of problem that has led to Marine Le Pen in France and others throughout Europe on the radical right and left beginning to show real strength in the polls. (Take a look at this piece on Le Pen from yesterday.)
Perhaps I am more fretful than I should be after my dinner with George Friedman, who loves Europe but doesn’t think the EU is the answer, nor that will it last in its current form.
I spent much of the day and will continue long into the evening in a planning session for the 2016 Strategic Investment Conference. It will be held in Dallas May 24-27, and I truly believe it will be my best conference ever. Part of the new emphasis is going to be on the ability of attendees to network with one another. There are cool new technologies that allow us to do that.
The biggest “problem” is trying to sort out who the speakers will be this year: we have an embarrassment of riches. Well, that problem plus the half-dozen other major priorities that are already demanding lots of attention. I actually remember a time in my life when I felt that I could read the sports page and watch TV while still dealing with business and raising seven kids, plus being involved in politics and church, etc.
The irony is that I have this fabulous media system throughout the house, and I am ashamed to say that it is rarely used, except when kids or friends come over to watch something. I know I’m not the only person with insufficient bandwidth, because I hear it from friends everywhere.
And the availability of great information is only going to increase. I am told that someday we’ll each have an information “butler” to help us handle the load, but that cool new personal AI app is going to have to wait for a lot more power in our computers and phones and monster upgrades in software.
I suppose it will come much like the speech-recognition technology that I’m using to write this letter. Given that I’m actually a relatively slow and clumsy typist, it has really increased my productivity.
But I can’t tell you how many versions of this software I bought over the last 12 years that were not ready for prime time. I suspect that the introduction of techno-butlers will go much the same way.
We’ll endure a lot of hype, spend our money, and be less than satisfied with the results. But by version 12.5, iButler will actually be a tool we can’t live without. If its development proceeds at the same pace as speech-recognition, then my personal butler might not show up ready for work until sometime in the late ’20s. On the other hand, the technological transformation is accelerating, so…
While we’re at it, I really do hope that Mike West over at Biotime can figure out how to make a new or at least a younger version of me, or at least the parts of me that I’m going need, by then.
You have a great week.
Your trying not to overload your inbox analyst,
John Mauldin, Editor
Outside the Box
Germany’s Immigration Challenge
the migration crisis.
By Daniel Stelter
September 13, 2015
September 13, 2015
Germany is considered a rational, fact-driven
country, not an emotionally driven one. And yet, based on the current
immigration debate in Germany, even the advocates of more immigration have
little more to offer than emotional arguments.
Given our nation’s history, Germans want to help
wherever and however possible. Offering asylum to those in danger is deeply
rooted in our society and even those who look for a better living are welcomed
by a large segment of German society.
The advocates of more openness point to the
benefits which an aging and shrinking population receives from more immigration
and they see the potential costs as rather minimal, at least for a rich country
like Germany.
That is a rather rose-tinted assumption because
it underestimates the financial costs, overestimates the benefits from
immigration and clearly overestimates the financial capacity of Germany.
Being overly optimistic helps neither the
immigrants themselves nor the cause of promoting greater openness in German
society.
Tremendous
costs
Proponents of more immigration to Germany refer
to the shrinking workforce and the significant unfunded liabilities for
pensions and health care, estimated at least at about four times the country’s
GDP.
The ultimate answer about how significant more
immigration is in that context depends on what the net contribution of
immigrants is to the German economy.
Aside from the fact that the answer is very
contested, even well beyond the realm of politics in the field of academic
literature, there is an additional problem. No one can tell for sure, as the
qualification of immigrants, especially refugees, is not registered.
Supporters of immigration point to the high
number of academics immigrating, such as Syrian doctors. Critics point to a
high number of uneducated and illiterate people. Most probably, Germany is
receiving a mix of both, very well educated and uneducated people.
Even making a very optimistic assumption – that
50% of the one million immigrants expected in 2015 are well educated, willing to
be integrated and want to contribute to the German society, while the other 50%
will remain largely dependent on public support – we can make a simple
calculation.
If the 50% share of skilled immigrants before
long were to earn 80,000 euros on a per capita basis – well above Germany’s
average income of about 40,000 euros – and paid taxes of 40%, their annual
contribution to society in form of taxes would be about 16 billion euros per
year.
Availability of
only high-skill jobs
At the same time,
assuming a social welfare cost of about 25,000 euros per “non-productive”
immigrant, those costs would total 12.5 billion euros annually. That would
still leave a positive net contribution to German society and the nation’s
economy
This underscores that it is obviously critical
from an economic point of view to attract a high share of productive
immigrants.
But this matters for more than just economic
considerations. As an advanced industrial democracy, Germany offers plentiful
immigration opportunities for skilled people.
However, unlike the past when large swaths of
low-skilled people came to Germany, the supply of low-skilled jobs in the
manufacturing sector is drying up quite rapidly, not least due to the increased
automation of German industry.
What is available are jobs in the services
economy which require language skills and an ability to do abstract reasoning.
Germany ought to be quite focused on this issue – not because it is heartless
but prudent.
The country has made plenty of mistakes on the
immigration front in the past, which ought not to be repeated. Not embracing an
active, skills-based approach to the management of immigration – à la Canada or
Australia – was one such mistake.
Does it matter?
Of course, one could conclude that net costs of
a few billion per year do not matter for a country as rich as Germany. This is
true – but only from the current perspective.
If one shifts from static to dynamic analysis
and realizes that immigration into Germany may very well continue at the
current speed, the picture looks quite different.
- Assuming a total pool of five
million immigrants flowing in and a more likely mix of 30% skilled
immigrants to 70% unskilled or low-skilled ones, the net costs would rise
to 38 billion euros per year.
- Over a time horizon of 30
years, this would easily lead to costs of more than one trillion Euros.
That is close to the entire costs of German reunification between 1990 and
2010.
Not as rich as
it claims
Let’s also understand that Germany is not as
rich as it claims. Besides the unfunded liabilities for the aging society of
more than 400% of GDP, the strategy to exit from nuclear energy is expected to
cost German consumers and businesses about 1 trillion euros.
Even that might be manageable if the euro were
structured in a sound manner. As things stand, rescuing the Euro will at least
cost another trillion euros. Add in the backlog of investments in public
infrastructure and another trillion euros is gone.
A plan for
immigration
Obviously, Germany needs to spend its money
intelligently. But we also need to change our behavior.
From both an economic point of view, as well as
from a humanitarian point of view and from the vantage point of providing of
solid integration perspective in German society, we have to make the best out
of the wave of immigration coming to Europe and Germany.
Germany: A
10-Point Plan to Deal
With the Immigration Challenge
What does it take to make sure that the
immigrants now arriving
are integrated in a sustainable manner?
By Daniel Stelter
September 14, 2015
September 14, 2015
Reduce
bureaucracy
The process of accepting someone as a refugee in
Germany takes too long. We need to define safe countries, like Albania, and
send immigrants from these countries back directly.
With all sympathy for their interest in a better
living, they are not threatened by war or discrimination. On the other hand,
refugees from countries in (civil) war should be accepted fast.
Get to work
It is very important to get immigrants into work
once they are in Germany. It is bad for both skills and motivation levels if
people cannot work.
Learning the German language is of utmost
importance and should be mandatory. Ideally from day one onwards, immigrants
should have to start learning the language.
And
as long as the immigrants don’t have a job, they should do community service.
This advances their integration into society and would give a clear signal:
Everyone coming to Germany has to contribute to the common good with his or her
abilities.
Significant investments in
education and integration
We need to register skills in order to find the
appropriate job or define the necessary next steps in education. Education will
the biggest challenge.
German schools even today fail to integrate and
educate the children (and grandchildren) of migrants who have been in the
country in some cases for some decades.
The school performance of children from Turkey,
the Arab world and Africa is significantly below the average. We need to invest
significantly, as this will define which share of migrants will become
productive members of our society and which share will depend on social
welfare.
Defend our
values
Not only skills and language are important. In
addition, we need to emphasize our principles and values. This includes freedom
of speech and religion, women’s rights, tolerance for minorities and
non-violence.
We have to make clear that integration will only
work this way and is expected from everyone. Simply arriving is not enough to
stay.
Canada, while generally being very welcoming to
immigration, every year sends back about 10,000 immigrants – not necessarily for
lack of integration, but it is not a one-way Street.
Mandatory
schooling
Participation in language school and courses on
values and rules in Germany need to be mandatory for every new arrival. Just as Brazil does with its bolsa familia, the payment of
social welfare should be linked to language and values training.
In doing so, we would convey the image of
Germany as we should – a country willing to help, but also a country in which
everyone has to make a contribution. Everyone who expects help and support
needs to be willing to learn the language.
Recruit
qualified immigrants
It is clear that a selection process as in
Canada and Australia succeeds in attracting better-qualified migrants.
Besides refugees from war and people in their
home countries, who need our support and where economic considerations should
play no role, Germany should become more attractive for well-qualified migrants
and be more active in advertising the opportunity to build a new life here.
As a consequence, we should actively open the
way for legal immigration to Germany. As a result, the applicants could spend
their savings on building a new life here, instead of spending it on smugglers.
Permanent
Both sides, the migrants and the German
population, need to accept immigration as a lifetime decision. It is not a
temporary refuge.
Again, Canada proves the point: If it is seen as
permanent, both sides, the migrant and the accepting country, work harder to
make integration work.
That has been a particular shortcoming of
Germany’s immigration policies in the past, especially regarding Turks.
Help in the
poor countries
It would be cheaper and more effective to help
the people in safe countries such as Albania, who aim for a better life, with
direct financial and organizational support.
The EU should invest there and
help to build democratic institutions and a working rule of law.
Fostering peace
The current wave of immigration is the result of
conflicts which have lasted for decades already – and will likely last decades
more.
This is amplified by a demographic development
which leads to a high number of young people without a credible perspective of
finding a job in their home country. This, in turn, increases the propensity
not just for social strife, but even for (civil) war.
The West needs to reconsider its strategy
fundamentally. The current U.S.-led approach of favoring military intervention
over development aid only leads to even more destabilization.
Be all in
The humanitarian and financial costs of such a
strategy are enormous. But if we don’t do this, we will have much higher costs
to incur.
Whoever speaks of the benefits of immigration
also needs to make sure that all the groundwork is laid so that the possible
benefits are also realized. Making the necessary investments can by no means be
taken for granted.
In conclusion, the current and future wave of
immigration to Germany could be beneficial for our country – but only if we
address the challenge with full force.
Unfortunately, it seems as if, just as in the
eurozone crisis, that our various countries’ leaderships – Germany’s included –
are failing at the task.
There is no denying that any solution involves
shouldering huge costs for all citizens, natives and migrants. Those who hope
that the wave will end soon should think again: Sub-Saharan Africa’s population
is about to grow by 600 million over the next 20 years.
100 million or more of those mostly young people will look
for a better life in the north. We had better learn now how to deal with it.
0 comments:
Publicar un comentario