By Simon Kent
Germany must be ready to pay a hefty price for Chancellor Angela Merkel’s decision to lay out a welcome mat for any and all Middle East migrants who make it across the country’s borders. A German economist has warned that cost will come in massive tax hikes levied sooner rather than later.
The reason German workers will be left with the tab is that most new arrivals are low skilled and will be dependent on social benefits including public housing, food and clothing for years after their arrival. At the same time they are taking from a system they contribute nothing to in terms of tax, with the resulting burden left on those in work and paying into the system.
This is the so-called dependency ratio – the number of tax-generating workers to non-working welfare beneficiaries.
German economist Bernd Raffelhüschen highlighted this cost at a symposium titled “Taxes – Law – Economy” held by the Chamber of Tax Consultants MV on Thursday in Rostock. He said that the only outcome from the migrant influx will be “massive tax increases.”
According to Mr Raffelhüschen, even today there are hundreds of thousands of unskilled unemployed in Germany. “That number will now come up to 1.5 million people to about 70 per cent of whom are also unqualified” Raffelhüschen is quoted by Deutsche Presse-Agentur.
The economist, a specialist in demographic changes and social security systems at the University of Freiburg, doubts that the majority of immigrants can be integrated into the labour market and instead of providing a boost to the economy will be a negative. “It is rather an integration into the social security systems” he explained, because benefit costs cannot be attributed to the contributors. Instead the taxpayers pay for it – not just today but well into the future.
Then there is the matter of competition for work. Published research by the Cologne Institute for Economic Research shows that foreigners already have worse chances on the German job market than Germans. Worst affected are immigrants from Arabic countries.
Germany is “the only country in the world without immigration rules” Mr Raffelhüschen continued, warning that in the coming decades the ongoing needs of unemployed immigrants will compete with those living in poverty in old age. The people who come into Germany as a 30-year-old have little chance to pay enough in 45 years into the national pension system to go from a burden to a benefit.
He expects, therefore, that the tax-financed basic funding of age needs to be significantly expanded (put simply that means Germans will have to postpone retrement until well into their 70s), something he has been warning Europe about since 1998.
Germany is, in his view, now an immigration country with zero boundaries to entry: “… it is the only country of immigration in the world with no rules”. Mr Raffelhüschen proposes that the first rule of entry should be that an applicant can contribute to – and not take from – the common good.
Germany could therefore learn from other countries such as the U.S., emphasized Raffelhüschen. He likes the fact that screening for job suitability is done in U.S. consulates before an intending immigrant lands. That way those who cannot be seen to be a viable prospect for employment can “be refused.”
It also should be clear into the future that Germany will need to control immigration at source: “But no one dares because control has to do with selection.” And an immigration law is ultimately an Immigration Limitation Act, “limited to those that we can use” Mr Raffelhüschen concluded.