IMF: Refugees can boost economies, only if Europe changes job requisites

More than 1 million migrants and refugees fleeing conflicts in the Middle East and Africa will give an immediate lift to struggling European economies, the International Monetary Fund (IMF) said in a report released Wednesday, cautioning European Union (EU) members that they must shift employment policies to turn short-term gains into long-term growth. 

Across the 28-nation bloc, aggregate gross domestic product (GDP) is predicted to rise 0.13 percent in 2017. In Germany, which has welcomed far more asylum-seekers than neighboring countries, that economic lift could be as high as 0.3 percent. The predictions are even better for Sweden and Austria: 0.4 percent and 0.5 percent, respectively.

The report comes amid calls to toughen immigration policies from leaders who fear cultural and financial consequences of Europe's changing demographics. German Chancellor Angela Merkel continues to insist "Wir schaffen das" — translated "We can do this" — as many Germans argue that no, they can't. 

"Not closing the border, just going on, would bring Europe to its knees," German transport minister Alexander Dobrindt said this week.

But "the negative effects of immigrant surges tend to be short-lived and temporary," as lead author Enrica Detragiache told reporters, noting that the "fiscal expansion that’s being carried out to provide for the refugees" would provide an immediate boost, as well. 

The long-term picture, however, presents greater uncertainty and risk. Historically, Europe has struggled to economically integrate many of its immigrants, creating social isolation as well. Some attribute these gaps to immigration policies that prioritized family reunification over job skills. In Germany, long-term immigrants' unemployment rates remain 3 percent higher than native Germans', and the IMF predicts that recent migrants will still experience 12 percent more unemployment than natives in 2020. 

But welcoming migrants could have significant benefits. Europe's most welcoming countries could see 1.1 percent higher GDP by 2020 if they adapt labor and immigration policies to facilitate newcomers' entrance into the job market, the IMF advises, echoing comments in its annual World Economic Outlook released earlier this month. 

The report encourages countries to facilitate employment by relaxing restrictions on asylum-seekers' right to work, creating easier routes to entrepreneurship, temporarily lowering wage minimums, and permitting migrants to move to where demand is highest. Some countries have been slow to adopt new EU legislation requiring members to offer work permits to asylum-seekers within nine months of filing their application, according to Human Rights Watch. 

The authors conclude that newly-arrived workers do not threaten jobs or wages, as commonly feared. Nor do they believe a "tipping point" exists, where the number of migrants would become economically unfeasible, Ms. Detragiache told the Guardian. 

But refugees do face unique challenges, compared to previous waves of family or economic immigrants. Historically, they've often fared worse. And, although many are skilled workers, their abilities may not be as needed in European markets, making job training a priority.  

Yet today's refugees may be better educated than yesterday's. Some 21 percent of Syrians arriving in Germany have a college education, for instance, compared with 23 percent of Germans themselves. But the longer refugees go without language training or job prospects, the harder it is to make use of those qualifications.

Several countries have begun combining cultural, language, and job training, preparing new arrivals to survive not just financially, but socially. In Sweden, for instance, immigrants who have arrived within the past three years are offered benefits to enroll in a 40 hour-per week program of language education and professional courses, from welding to gardening, which incorporate Swedish lessons into on-the-job practice. 

Although adult migrants may be better educated than in the past, refugees' children have often suffered disruptions in their own education. To keep growth going in the next generation, the IMF recommends that countries strengthen schools in often-isolated neighborhoods with a high percentage of immigrants, bolstering language support and teachers' own cultural training to properly address their pupils' needs. 

"The people who are coming to us want to change their lives – otherwise they wouldn’t come," Cologne Mayor Henriette Reker told Der Spiegel in early January, combatting alarm over migrant integration after attacks at the German city's train station on New Year's Eve. "We need to take decisive action to help them."