Wednesday 28 September 2016

Dan O'Brien: It's time to turn this influx into opportunity

European countries must learn from each other if immigration is to be a win-win, writes Dan O'Brien

Published 17/01/2016 | 02:30

Monthly number of first-time asylum seekers in the EU
Monthly number of first-time asylum seekers in the EU
ON THE MOVE: Migrants cross the border from Greece to a transit centre for refugees near the southern Macedonian town of Gevgelija. Photo: AP/Boris Grdanoski

There is little sign that the migration crisis will ease in 2016. There is every indication that it will be an even more fraught issue in the countries which are receiving most of those arriving in Europe.

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The events in Paris in November and Cologne on New Year's Eve will - rightly or wrongly - heighten fears about the downsides of immigration. While talk of a "clash of civilisations" is overblown, if not alarmist, there are often frictions when cultures rub together. The greater the cultural gap between peoples, the greater the friction can be.

This is all very understandable. We evolved to be suspicious of outsiders.

Most of our species' history was spent in precarious circumstances. Because life in the past was a zero-sum game - what you got, I lost - new arrivals in an area could mean the difference between life and death for those already there.

Happily, our world is different from life on the savannah where we evolved. Modern market economies are positive-sum games - the co-operation that people engage in creates more for everyone (even if there will always be debate around distributional issues).

Among the best ways to ensure that this positive-sum process can happen, and that new arrivals can become a win-win opportunity, is to integrate those who are granted asylum as quickly as possible into the labour market (that is not to advocate an open-door policy towards immigration, which would be disastrous when income disparities across the world are so large).

Last Tuesday, Eurofound, an EU agency which happens to be headquartered in Dublin, published a useful paper* on getting refugees into work. It looked at experiences across the 28 members of the bloc, all of which, it is worth noting, are signatories to the 1951 UN convention on refugees.

Countries need all the ideas that they can get. The influx of immigrants - refugees and economic migrants - into Europe last year amounted to one of the largest movements of people since World War Two. The accompanying chart shows just how big the increase was in the numbers seeking asylum.

Complete figures are only available up until September, but the surge as last year progressed was very marked.

In the January to September period, there were 830,000 applications for asylum in the EU. That represented an increase on the same period in 2014 of 120pc.

Figures from October, which don't yet include every member country of the EU, show a slight increase on the record high of September. That suggests that the poorer winter weather has had less impact than anticipated on people's decision to attempt the usually arduous journey to Europe.

Where are people coming from?

Just under half of Europe's first-time asylum applications were from the three biggest source countries - Syria, Afghanistan and Iraq.

In the first nine months of 2015, Syrians accounted for just over one-quarter of the total number seeking refugee status. Afghanis were in second place and Iraqis in third. Together they made up one-fifth of the total.

It is clear that in Syria and Iraq in particular, the deterioration in the security situation in line with the rise of so-called Islamic State has been the main push factor in propelling people towards the safety of Europe.

But the pull factor of a better life in Europe is also a factor for those coming from other countries. There were almost as many Kosovars seeking asylum as Iraqis in the nine months to September. Albanians were only fractionally behind. Given that both Balkan countries have experienced no security issues over the past year, it is very hard to avoid the conclusion that many people there and elsewhere have taken advantage of the more porous borders to try their luck in the EU.

This has caused the lines between those who are economic migrants seeking a better life and those escaping war to become blurred, making it all the more difficult for governments to respond, as if integrating migrants into the labour market was not already challenging enough. That is particularly the case for refugees who had no desire to leave their countries of origin in order to seek their fortune elsewhere and who may be ill-equipped to work in alien surroundings.

Reducing the duration refugees have to wait to get processed and the duration before they are allowed to work is one way of reducing the initial costs which fall on host countries - according to the OECD, past evidence shows that the fiscal impact of welcoming refugees can be relatively high in the short term, but that it decreases rapidly if they work. Several governments have moved in this direction.

Although asylum applications in Ireland more than doubled last year over 2014, rising above 3,000 for the first time since the crash, the numbers are below the EU average on a per capita basis. Our location and the relatively few direct flights into the country from outside the EU are factors explaining the limited numbers applying for refugee status here. Another factor is likely to be the asylum system, which, by accident or design, has probably deterred at least some of those seeking asylum from coming to Ireland.

Ireland and Lithuania are the strictest of the EU countries when it comes to allowing refugees to work. Only here and in the Baltic state are asylum seekers not allowed to work until a final decision has been made on their refugee status. There is a strong case to be made to change the system so that it is more similar to most other EU countries.

Among the more coherent labour market activation policies cited in the Eurofound report is Denmark's. One scheme already in place is the so-called 'staircase model', which aims to allow refugees gradually adapt to the Danish labour market. The first step (lasting four to eight weeks) provides language lessons and identifies the refugee's competencies. The second step (lasting up to a year) includes a government-funded traineeship with an enterprise and additional language classes. Thereafter, the refugee should be ready to take a job with a wage subsidy.

A more controversial Danish proposal is 'phased-in wages', where employers are incentivised to hire refugees by being allowed to pay below the sectoral minimum wage. However, unions and some employer groups have opposed the measure, saying it would drive down wages while pushing refugees into poverty.

Such labour market activation policies will be important to integrate migrants into a country's economy and society. But they are not the be all and end all. How well refugees are accommodated into the labour force will also depend on the underlying dynamism and strength of the economy.

As well as these economic realities, the political difficulties of large-scale immigration appear frequently in the Eurofound report. In France, there has been caution in introducing policies that would appear "too favourable" to migrants, in case it helps the Front National.

A study in Austria predicted a small increase in unemployment if there was a full opening of the labour market to all asylum seekers, findings that were sensitive in a country where the reactionary Freedom Party leads polls.

Short of revoking the 1951 refugee convention and attempting to seal the continent's borders, Europe will continue to have large numbers of people seeking asylum in the short term. It is far from clear that public pressure on governments to do exactly that will not become unbearable.

Over the longer term, making an opportunity out of the crisis will involve getting newcomers into jobs as quickly as possible. If that doesn't happen, the legacy could be ghettoisation and social strife.

*http://www.eurofound.europa.eu/observatories/eurwork/articles/industrial-relations/approaches-towards-the-labour-market-integration-of-refugees-in-the-eu

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