We should not confuse the potential economic benefits of immigration for the United States with what is happening in Europe and specifically Germany. While the benefits can be great, what is happening in Europe largely involves people seeking asylum who bring different skills and behaviors than immigrants.
Germany’s problems, opportunities, and solutions are so different from those of the US, that its “model” for handling new arrivals has limited application. That’s the sense that one gets in reviewing responses to this month’s column.
Anne, for example, pointed out that the German system assigns a certain number of immigrant families to specific villages, has them take German lessons, and gives job assignments with benefits conditioned upon taking a job if offered. "American Civil Liberties would have heart failure, I suspect, over these requirements to take English lessons, go where assigned to live, and mandatory job placement,” Anne writes. Writing from Germany, Andreas Schulz reminded us that, “The huge number of refugees is only admitted as asylum seekers, not as immigrants. The majority of them is supposed to return to their countries of origin....” Ben commented that “We have a need for skilled and unskilled labor here (in the U.S.) and we value inclusion and integration... (But) I think our government shouldn’t copy any other country’s ideas.” Harry added, “They are different countries, and the beliefs that they share are different.”
Bowlweevils, injecting a political note into a discussion intended to deal with economics, argued that Germany has no model for dealing with immigrants and asylum seekers. As he put it, “Germany ... is making things up as fast as it can to respond to an overwhelming amount of people. And Germany does not know who these people are.”
Tinashe Madakadze was, in general, enthusiastic about the idea of increased immigration for the US. In fact, the immigration experience in the US could even be better than Germany's because the source countries for the U.S. are not at war. "People who are flocking to Germany and other European countries, who are running away from war, civil strife and unrest in their countries ... may be unskilled and may not easily integrate with the ideals of the host countries.”
Ian Bell, writing from Paris, was introspective about the European “lessons” on immigration. “Compare (Germany) with France, which provides time off for parental leave and financial incentives to have children, and unsurprisingly they have plenty of kids ... and are not so keen on immigration. Now where does the US fall?”
On immigration does the US have anything to learn from Europe? What do you think?
In this forum 15 years ago we discussed the question of the effect of the North American Free Trade Agreement (NAFTA) on immigration from Mexico to the United States. At the time, the border between the two countries was porous, with many workers crossing from Mexico, every day. Given the relatively low rate of unemployment in the US and the paucity of jobs in Mexico at the time, it seemed certain that the issue of immigration would be pursued by the leaders of the two countries after the signing of the trade pact.
But as we know, no substantive solutions were reached. Instead, “markets” provided the best regulation. By 2011, according to a Pew Research Center study, the number of Mexican-born residents in the US had actually begun to decline as the Mexican economy began providing more jobs. Net migration patterns fluctuate like trade flows. People come and go.
Today, of course, immigration has become a prominent political issue in the US just as the humane treatment of refugees is a current issue in Europe. If possible, let’s put politics aside and stick with the economics of immigration.
The economic argument for countries like the US and Germany is that immigration has a tendency to attract those with the strongest motivation to form a new life, learn new skills, and obey the law (especially if illegal entry puts them at special risk of deportation). Typically, it lowers the average age of the population in the prosperous country, stimulates demand for products and services, and creates as many jobs as it fills, thereby not increasing unemployment.
In the US, as the argument goes, it could also help address the economic shortfall in Social Security by expanding the proportion of the population paying into it (although this would require some kind of security for illegal immigrants to induce them to come forward and pay into the system). This message has undoubtedly influenced Germany’s willingness to accept relatively huge numbers of immigrants this year from the Middle East and Africa. It has prompted the Chairman of German auto producer Daimler to comment, “In an ideal case, this can help foster another economic miracle.”
Poorer nations benefit from outward migration most often because their birth rates are much higher than an economy can sustain, in part because children are perceived to represent the best insurance against old-age poverty, even though at a macro level they lead to an economy with more consumption than income, no resulting capital for investment, and so much risk aversion that little innovation and improvement in productivity and growth occurs. Artificial capital infusions (say, from the IMF) may actually backfire because they eventually lead to longer life expectancy, further population growth, greater consumption of output produced by the investment, and a return to the previous condition of poverty. Economist John Kenneth Galbraith called this “the equilibrium of poverty.” (As a side note, one problem with Galbraith’s argument is that “labor exports” often involve people with the best education and skills, producing a brain drain. The result could well be greater inequality among the world’s economies.)
Germany has an effective system for achieving a “human transfusion” for its economy. In recent decades, it has had plenty of practice--with good and bad experiences--in integrating other peoples into its society. Instead of building physical or psychological “fences” and arguing about quotas designed to limit migration, it has spent its money developing methods for receiving, documenting, and legalizing large numbers of immigrants. Just as important, it is implementing various ways of training immigrants to get them into the work force as soon as possible. As a result, it knows who its immigrants are.
Is Germany’s response to immigration a model for the US? What do you think?
To Read More
John Kenneth Galbraith, The Nature of Mass Poverty (Cambridge, MA: Harvard University Press, 1979), especially pp. 44-60.
Jeffrey S. Passel, D’Vera Cohn, and Ana Gonzalez-Barrera, Net Migration from Mexico Falls to Zero—and Perhaps Less, Pew Research Center, April 23, 2012.
Alex Webb and Alessandro Speciale, “Refugees May Ease a German Labor Crunch,” Bloomberg Businessweek, September 21-27, 2015, pp. 16-18.