Integration Challenge

Refugee Agency Head Resigns

Refugee face at fence-gregor fischer-dpa
Many of the refugees coming to Germany are unskilled and would require training to be integrated into the workforce.
  • Why it matters

    Why it matters

    The expectation that the current wave of refugees and migrants will help to solve Germany’s labor shortage is overly optimistic.

  • Facts

    Facts

    • An estimated 1 million refugees will arrive in Germany this year.
    • The head of Germany’s Federal Office for Immigrants and Refugees Manfred Schmidt led the agency since 2010.
    • Research data on asylum seekers and refugees coming to Germany in previous years shows that about 40 percent were either graduates or trained professionals.
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    Audio

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The head of Germany’s Federal Office for Immigrants and Refugees, Manfred Schmidt, 56, unexpectedly resigned on Thursday “for personal reasons,” the German Interior Ministry said on Thursday.

The agency is tasked with granting and rejecting asylum requests and integrating migrants into German society.

Thomas de Maizière, the interior minister who was Mr. Schmidt’s boss, lamented the civil servant’s departure and praised his efforts to cope with the largest influx of asylum seekers since the early 1990s.

Mr. Schmidt’s agency has been the target of increasing criticism in recent months, as it struggles to process a ballooning number of asylum requests.

Through August, more than 256,938 people applied for asylum in Germany, a number outstripping the 202,834 requests for the whole of 2014.

The influx of refugees, which could total 1 million this year, are seen by some as a welcome boost to German businesses, which are having trouble finding employees to fill vacant positions. The number of young people entering the trades in Germany declined by 25 percent over the past 10 years and continues to drop.

In 2014, a third of all businesses were unable to fill all their apprenticeship positions, and a record 600,000 positions were unfilled. So, from the standpoint of labor market policy, it would seem that Germany could benefit from the influx of refugees.

But Klaus Zimmermann, director of the Institute for the Study of Labor, or IZA, doesn’t think so and prefers to puts a damper on the euphoria. “Refugees alone will not solve our demographic problem,” he said. “Merely the fact that a lot of new people are coming to Germany now doesn’t mean everything will be fine.”

Forecasting is difficult at the moment, because Germany lacks a reliable assessment of the newcomers’ qualifications. Based on initial experiences with the “Early Intervention” pilot project launched by the Federal Employment Agency, less than a tenth of all asylum seekers could be directly placed into jobs.

“The Syrian doctor is not the norm,” said Labor Minister Andrea Nahles, a member of the center-left Social Democratic Party.

“Refugees alone will not solve our demographic problem. Merely the fact that a lot of new people are coming to Germany now doesn't mean everything will be fine.”

Klaus Zimmermann,, Director of the Institute for the Study of Labor, IZA

According to data compiled by Federal Employment Agency on asylum seekers and refugees who came to Germany in previous years, 16 percent were graduates and 23 percent were trained professionals. But more than half of the migrants arrived in Germany with no formal qualifications.

Based on random samples, this percentage is probably higher in the current wave of refugees.

Integration into the German labor market will take time, according to Herbert Brücker, a migration expert with the Institute for Employment Research, or IAB. The institute has found that 55 percent of asylum seekers and refugees fit for employment had jobs after living in Germany for four years. The employment rate is 10 percent higher for legal immigrants.

Expediting the asylum process is a key factor. As long as a refugee’s status remains unclear, labor force participation ranges between 5 and 15 percent.

Ms. Nahles, the labor minister, anticipates 1 million additional recipients of Hartz IV welfare benefits in 2019.

Labor market experts, trade associations and lawmakers all note that most refugees are young, about half of them under 25 years old. These people, according to Mr. Brücker, offer the greatest potential for the labor market. “Every euro we invest in education and training is money well spent,” he said.

The older refugees and migrants will be more difficult to integrate, according to experts. The German Institute for Economic Research, DIW, expects 50,000 refugees to look for work this year, and predicts the number will increase to 120,000 in 2016. It is unlikely that all of them will immediately find jobs to match their qualifications.

“Even if someone is trained as a metalworker in Syria, it doesn’t mean he can operate a computer-controlled milling machine,” said Holger Schäfer with the Cologne Institute for Economic Research, IW.

A Syrian with a university degree would be initially happy to accept a menial job in food service or agriculture. “That’s why it wouldn’t surprise me to see a displacement effect at times in the low-wage sector,” said Mr. Zimmermann of the IZA.

At a trade union convention on Tuesday, Ms. Nahles said the minimum wage was introduced “just in time” to prevent the exploitation of refugees.

The initial challenge will be to match refugees to employers. For umbrella organizations in the German economy, the regulations are strict, especially when it comes to the so-called priority review. The shift in jurisdictions between employment agencies and job centers is also frequently an obstacle to quick job placement. And sometimes asylum seekers are simply not located in the places with openings for jobs and apprenticeships.

Mr. Zimmermann proposes changing the procedure involved in distributing refugees to increase the emphasis on manpower requirements, instead of focusing primarily on tax revenues and population. In a position paper Handelsblatt has obtained, the IZA also calls for faster asylum procedures, better language training, an immigration law and assessing the qualifications of refugees as quickly as possible.

Fast-track procedures and shorter waiting periods could then apply to asylum seekers with skills that are desperately needed in German businesses.

 

Ditmar Neuerer covers domestic politics for Handelsblatt in Berlin. Frank Specht covers the labor market and trade unions. Gilbert Kreijger, an editor with Handelsblatt Global Edition, and Désirée Linde, an editor with Handelsblatt, contributed to this article. To contact the authors: neuerer@handelsblatt.com and specht@handelsblatt.com

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