Immigrants Don’t Steal the Jobs of Germans

Economists sometimes come up with odd examples. Imagine the following: Each year, new high school graduates would line up outside the labor offices in early summer. The clerical worker then would ask the graduate what course of study he or she would like to take and then would respond, “History of art? We don't need that, you'll be studying engineering!“ In times of doubt, the job office assistant would have to contact Economics Minister Wolfgang Clement directly.

An absurd scenario?

Yes, but this scenario bears a strong resemblance to what could happen in Germany when the country finally adopts an immigration law. As a result, bureaucrats will check whether potential immigrants are sufficiently qualified and whether they will earn enough money to be welcomed in this country. They will evaluate whether Germany has a “superior economic interest“ in allowing self-employed foreigners to immigrate. And they will decide whether the pitiful newcomers could serve as skilled or unskilled “bottleneck workers.“

The process of immigrant selection bears some similarity to a socialist planned economy. Absurd situations arise when immigration policy is driven by the fear that immigrants will steal the jobs of Germans.

Immigrants will not enter Germany just to work. Like the Germans themselves, they also want to rent apartments or build houses, buy furniture, cars and television sets, and generally ensure that their families enjoy a good standard of living. In short, an immigrant in a foreign country is not only a worker, but also a consumer. Through his or her work, the immigrant contributes a small part to the country's gross domestic product, thereby strengthening economic growth. Through consumption, the immigrant creates more sales for the retailer around the corner and German companies. And that creates new jobs. This positive effect of immigration is not immediately visible. The formerly idled worker who just got a job at Opel would never think of attributing his new position to car-buying immigrant families. And yet demand from immigrants provides new momentum for German companies. Saying that immigrants do not benefit the German economy is wrong.

In the conflict over the new immigration legislation, politicians finally realized that immigrants can close gaps on the German labor market. When open positions can be filled only with immigrants because there are not enough skilled German workers, the positive effect on the German economy is directly visible. Politicians have also learned - from Turkish entrepreneurs, among others - that self-employed immigrants can create jobs.

But they still need to realize one thing: That unskilled immigrants also do not harm the German economy, but boost it through their consumption. Faced with more than 4 million unemployed Germans, politicians have warned that Germany should not take in more immigrants. But unemployment is not the result of immigrants “stealing“ our jobs. It is the result of a systematic deterioration in conditions for job creation: through expensive wage deals, the consistent extension of the unacceptably expensive social welfare state, high taxes and red tape. It is not the fault of potential immigrants that unemployed Germans do not get a chance.

Reluctant to allow market forces to reign on the labor market, politicians prefer to steer immigration flows. Yet no labor office assistant has the knowledge or ability to rate potential immigrants in terms of their future use for the German economy. How, then, should one decide whom to let into the country? There are better ways than bureaucratic selection to manage immigration. Immigrant placements could be auctioned off, with companies competing for contingents. Such solutions could ensure that the best and most capable move to this country, without great administrative effort.