A new study casts doubt on migrants propping up the economy, saying that they could heavily impact the economy in a negative manner.
Enzo Weber from the Institute for Employment Research (IAB) in Nuremberg and his colleague Roland Weigand produced a new report on the long term economic effects of mass migration. According to the IAB report, without additional efforts from the German government and others in the European Union (EU) the long term impact of mass migration could be highly negative for the economies of Germany and Europe.
They say that the real problem with migrants is a distinct lack of qualifications, or qualifications that don’t meet European standards, and the huge language barrier between migrants from places like the Middle East and North Africa, reports Die Welt.
According to the pair of researchers, not only will long-term unemployment rise and total tax revenues fall in the long term but the medium term economic forecast could be just as dire, if not more so.
They say that the Gross Domestic Product (GDP), which measures the total wealth created generally per year in a country, could decline not only overall, but also per capita. The researchers note that this effect could also lead to job losses resulting in higher unemployment as the government must decide whether to raise taxes to pay for government services or make well paid government workers redundant.
“If you’re doing nothing then mass-migration has a long term negative effect,” Mr. Weber said. The researcher claimed that it was crucial to get migrants proper skills training. While some migrants may have certifications or degrees from universities and institutions in the Middle East or North Africa, the curriculum could be entirely different leading to an uncertainty as to their true expertise in their given subject.
Mr. Weber noted that language was also important; no matter how skilled a migrant may be, without language skills they may be reduced to performing low skilled labour where language is not a deciding factor.
A study from the London School of Economics is far more optimistic about migrants impacting the economy in a positive way. The study released in May by the Open Political Economy Network states that migrants could return the investment in merely five years, but is solely dependent on the rapid integration that some are increasingly sceptical of.
A study earlier this year, also from the IAB, debunked the notion that migrants would benefit European economies saying they would simply be a “reservoir for low cost labour”.
Internal documents leaked from Germany also revealed that some 81 per cent of migrants had little to no job skills and that the German government expected 400,000 new welfare recipients in 2016. At least 350,000 migrants were confirmed to be receiving benefits earlier this year and many critics are questioning whether they will ever be employed.