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Wednesday, March 28, 2018

The German Economic Miracle Depended on Immigrants

Germany successfully integrated large quantities of migrants into the workforce in the 60s, to everyone's benefit.

The nationalist right is filling up the internet with articles on how “mass immigration is destroying Germany,” as it is known to be the most permissive European country when it comes to accepting migrants. In fact, a third of all first-time asylum applications are filed in Germany, making it the most popular country for displaced people in Europe to apply for asylum status. These nationalists fail to see the opportunity that lies within immigration. If the Germans achieve speedy work integration, they would be able to reproduce the success of earlier migration movements.

The “Gastarbeiter” Agreements of the 1960s

Throughout the 1960s, West German governments under the chancellors Adenauer, Erhard, and Kiesinger signed myriad guest-worker agreements with countries such as Turkey, Morocco, Tunisia, and Yugoslavia. The post-war economic deregulation that had lead to the “Wirtschaftswunder” (economic miracle), also known as the German miracle, necessitated large amounts of low-skilled workers. For instance, with the help of guest workers, the German car industry was able to grow production quickly during the decisive expansionary phase of the 1960s and thus reduce production costs more rapidly than many competitors.

One in five Germans has a migration background in his or her family, most of which are related to these guest worker agreements.

The people coming to Germany as “Gastarbeiter” (guest workers) were supposed to stay for the time that Germany needed them, but unlike what the government had planned for, many of them stayed. By the recession of 1973, 4 million immigrants had settled in Germany through these work-oriented agreements. Even as economic decline hit Europe, they decided to remain in Germany where they had started to create a future for themselves and where their children felt at home.

Today, people with Turkish names yet accent-free German pronunciation in high business or political offices aren’t a strange sight anymore. One in five Germans has a migration background in his or her family, most of which are related to these guest worker agreements.

In comparison to the so-called “refugee crisis” of today, the government then was actually prepared to integrate people quickly into the labor market. However, even though the number of workers is far lower than those who came during the guest-worker agreements, the integration process is far slower because the administration is overly bureaucratic.

The German Government Is Making Things Harder

The time asylum-seekers in Germany have to wait between lodging the application and when the applicant can access the labor market is three months. Furthermore, the applicant is also subjected to a test by which authorities are establishing his ability to perform said work in the first place; an action that you’d think would be done by the employer regardless.

If we add the aforementioned criteria for employment, then the unemployment rate makes more sense.

With language skills being crucial for integration into the workforce, the German government provides language courses for asylum-seekers. However, it only does so for asylum-seekers who are likely to remain in the country, which is a major setback for those who are accepted but weren’t likely to remain in Germany to begin with. And still, the professional integration of migrants goes a lot faster than you’d believe after reading the headlines of certain right-wing media outlets.

By the first half of 2016, 10 percent of refugees who came to Germany during 2015, 22 percent of those who arrived in 2014, and 31 percent of those who received asylum in 2013 had found work. Refugees from Afghanistan, Eritrea, Iraq, Iran, Nigeria, Pakistan, Somalia, and Syria are mostly in temporary work agencies or work in the hospitality sector. This has sparked a number of polemic headlines about the low employment rate of refugees.

However, it needs to be pointed out that this group includes those refugees who are still completing their integration courses which, in July 2017, constituted more than half of those registered as job-seekers. If we add the aforementioned criteria for employment, then the unemployment rate makes more sense. If Polish immigrants who, under the rules of the European Union can legally live and work in Germany any time they like, were put through mandatory integration courses, a job performance test, and a mandatory 3-month waiting period, we could reasonably argue that their unemployment rate would also be higher. In other words: the idea of the “lazy refugee” is a self-fulfilling prophecy, as government makes employment a difficult path to begin with.

The OECD and UNHCR point out the same problem in a statement on migration policy:

“Uncertainty regarding the length of stay also limits employability of refugees and asylum-seekers and makes companies more hesitant to hire them or invest in their training.”

And still, given all these barriers, the German Institute for Labor Market and Vocational Research project that within five years of their arrival, half of all asylum-seekers who came to Germany will be working. As long as the German government doesn’t incentivize people to remain dependent on welfare payments or discourage asylum-seekers through short work-permit approvals, the potential of highly motivated labor forces to flood the market is immensely promising.

Seizing the Opportunity

With an aging population and decreasing demographics in Germany, the economic advantage of integration of the refugee population into the workforce is immense. As both workers and consumers, their contributions to the well-being of this country that already has an impressive work ethic will be manifestly beneficial to both the migrants and the host population.

The German government should stop disincentivizing both asylum-seekers from seeking jobs or employers from offering them. Just like in the middle of the 20th century, Germany can handle migration. And it will be to its benefit.

  • Bill Wirtz is a Young Voices Advocate and a FEE Eugene S. Thorpe Fellow. His work has been featured in several outlets, including Newsweek, Rare, RealClear, CityAM, Le Monde and Le Figaro. He also works as a Policy Analyst for the Consumer Choice Center.

    Learn more about him at his website