The case for opening the labor market to refugees

von Nicole Raz / 20.09.2015

Eine Öffnung des Arbeitsmarkts für Flüchtlinge könnte sich langfristig bezahlt machen, sagen Experten. Nicole RazDie US-amerikanische Radio- und Multimediajournalistin Nicole Raz ist im September und Oktober als US-Austrian Journalism Exchange Fellow bei NZZ.at und wird insbesondere die Wirtschaftsberichterstattung bereichern., unsere amerikanische Austauschjournalistin, analysiert.

While there will be major short term costs associated with accepting a huge population in need of housing, language courses and possibly medical services, food and clothing—there is an economic case to welcome refugees with open arms.

The influx of asylum seekers can be seen as a public stimulus program for the Austrian economy, “but, one with an uncertain payoff,” says Labor Economist Monika Merz with the University of Vienna.

It is very possible that asylum seekers will provide a much needed boost to Austria’s labor force and tax base in the long run.

But as NZZ.at previously reported, there are massive discrepancies in the amount of refugees expected to seek asylum in Austria. The exact number of new migrants in Austria remains to be seen.

“It all depends on who these refugees are,” Merz told NZZ.at. “How old they are, and what qualifications they are bringing with them.”

Migrants tend to be younger than the average population in the receiving host country—although in this case, many families with young children are also in the mix.

“Once these people become minimally integrated into an economy, into a country, then they become part of the labor force,” says University of Vienna Economics Professor Alejandro Cunat.

A labor force that can sustain Austria’s strained pension system and fill the impending gaps in Austria’s labor market.

“If these asylum seekers are highly qualified, then that can mean a wonderful opportunity,” Merz said. “A country like Austria does need highly qualified people and there’s ample opportunity in the IT sector and the services industry.”

On the other end of the spectrum, there may be even more of an opportunity for less qualified workers.

“I’m talking here in terms of services that are related to housing, such as cleaning, but also taking care of the elderly. In the near future, that’s going to be a booming market.”

The quicker that asylum seekers are able to integrate into Austrian society and enter the labor market, the quicker and more likely the “refugee public stimulus program” will have a positive payoff. But making the integration process quick and effective, is a political question.

Allowing asylum seekers to work and breaking down barriers to enter industries within the labor market will require legislative changes.

“Above all, there is a humanitarian case for changing laws in Austria [to allow asylum seekers to work],” Cunat said. “Secondly, I think that if we are admitting the people as we should into our country we should do our best so that they can have a normal life—they should be allowed to work. Otherwise, they are going to be dependent on whatever the taxpayer wants to hand out to them.”

Austria’s highly regulated labor industries may prove a burden for migrant entrepreneurs looking to start a new business, or to enter what would have been a private sector industry in their country of origin.

Opening up the labor market will also provide an incentive for the refugees to learn German and to assimilate, says Flooh Perlot, a political scientist at Vienna’s Institute for Strategic Analysis.

“If the aim of any politician is to have one [united] society, then you have to make sure that people from many different cultures can interact with each other. It’s very important from day one to put the refugees into contact with the people living in Austria.”

Lawmakers are stepping into uncharted territory, and they are faced with garnering public support for policies catering to the migrant populations while simultaneously not alienating migrant populations.