Immigrants Unlikely to Plug Germany’s Skills Gap

Many immigrants from the Middle East lack the skills they need to work in a rich country like Germany.

Germans demonstrate in support of refugees, April 22, 2015
Germans demonstrate in support of refugees, April 22, 2015 (Campact/Jakob Huber)

A record influx of asylum seekers is unlikely to help Germany plug a skills gaps in its labor market, experts warn.

“Let’s not delude ourselves,” Ludger Wößmann, the director of Ifo Center for the Economics of Education in Munich, tells Politico.

From everything we know so far, it seems that the majority of refugees would first need extensive training and even then it’s far from certain that it would work out.

More than a million immigrants arrived in Germany last year, a tenfold increase from 2013. And the flow of people shows no sign of slowing.

Many are refugees from the wars in Iraq and Syria, but a significant number are nationals of poor Balkan states seeking a better life in the West.

Liberal optimism

Britain’s The Economist has argued that the refugee problem could be a “solution” for businesses that will face labor shortages when the native population ages.

Germany’s working-age population is projected to shrink from around 49 million in 2013 to 34-38 million in 2060, according to government figures.

“The newcomers are typically a lot younger than the greying populations of the countries they are fleeing to,” The Economist points out.

Of the 729,000 registered in Europe between May and October of last year, 82 percent were under the age of 34.

Some of those arriving are poorly educated, but as surveys of refugees arriving in the Netherlands show, many have secondary schooling and even university-level education, especially those fleeing Syria’s conflicts. And a significant proportion have skills and experience in various professions and trades.

That now seems an overly optimistic assessment.

Germany’s own Institute for Employment Research has found that less than 15 percent of refugees from Syria and other countries have completed vocational training or a university degree.

And even they may not be employable in a rich and developed country like Germany.

According to the Organization for Economic Cooperation and Development, the average eighth-grader in prewar Syria had reached a level of education only similar to that of a third-grade pupil in Germany.

“Someone who comes from Eritrea and says he was an electrician might have repaired a radio or laid a cable there,” says Achim Dercks, the deputy managing director of the Association of German Chambers of Industry and Commerce, “but he might have never seen a fuse box, as we use it in Germany.”

Warnings

A few commentators were more cautious when Germany’s chancellor, Angela Merkel, opened the doors to hundreds of thousands of asylum seekers last year.

The American Interest‘s Adam Garfinkle warned in September that Germans were in for a shock if they thought “that they’re getting the cream of the educated crop from Syria.”

They are presumed to be engineers, doctors and the like, and given Germany’s age-cohort imbalanced demographic picture, the consensus among the saintly is that they will boost the German economy in the not-too-distant future. This means that they know not the first thing about the real status of education in the Arab world. Only a tiny percentage of these asylum seekers are well-enough educated to hold down a middle-class enabling professional job in an economy like Germany’s.

They are more likely to join the ranks of the 20 percent unemployed among the low- and unqualified workers of the country, Politico reports, and compete for low-skilled jobs.

Liberalization

To allow them to get such jobs, Germany needs to lower entry barriers. Only five of its sixteen states recognize foreign technical qualifications. In many industries, like construction, there are requirements to hold a master craftsman’s certificate to run a business. Entrepreneurs and professionals with otherwise comparable skills are kept out.

Wößmann recommends lowering the minimum wage as well, warning that “the majority of refugees” could otherwise stay out of work — “and this would be an even greater burden for our social system.”

Merkel’s grand coalition with the Social Democrats has in many ways done the opposite. It has limited temporary work contracts to eighteen months and introduced a national minimum wage of €8.50 per hour.

Since 2012, less than 30,000 high-skilled workers have moved to Germany under a Blue Card scheme that requires proof of salary and a university degree. Labor experts and businesses complain that the requirements are too strict. But with public sentiment shifting against immigrants, it is difficult to see how the government could reform the system to let in more of the better-qualified workers that Germany actually needs.