“Refugees will repay EU’s spending almost twice in 5 year”
Brussels, (IINA) – Refugees who arrived in Europe last year could repay spending on them almost twice over within just five years, the Guardian reported Wednesday, citing one of the first in-depth investigations into the impact incomers have on host communities.
Refugees will create more jobs, increase demand for services and products, and fill gaps in European workforces – while their wages will help fund dwindling pensions pots and public finances, said Philippe Legrain, a former economic adviser to the president of the European Commission.
Simultaneously refugees are unlikely to decrease wages or raise unemployment for native workers, Legrain said, citing past studies by labor economists.
Most significantly, Legrain calculates that while the absorption of so many refugees will increase public debt by almost €69billion between 2015 and 2020, during the same period refugees will help GDP grow by €126.6bn.
“Investing one euro in welcoming refugees can yield nearly two euros in economic benefits within five years”, concludes Refugees Work: A Humanitarian Investment That Yields Economic Dividends, a report released on Wednesday by the Tent Foundation, a non-government organization that aims to help displaced people.
Legrain added that he hope the report will dispel the myth that refugees will cause economic problems for western society.
“The main misconception is that refugees are a burden – and that’s a misconception shared even by people who are in favor of letting them in, who think they’re costly but it’s still the right thing to do”, said Legrain in an interview.
“But that’s incorrect. While of course the primary motivation to let in refugees is that they’re fleeing death, once they arrive they can contribute to the economy”.
While their absorption puts a short-term strain on public finances, Legrain said, it also increases short-term economic demand, which acts as a welcome fiscal stimulus in countries where demand would otherwise be weak. In the longer term, refugees will increasingly contribute to tax revenues, and also create jobs.
“To put it simply, there is not a fixed number of jobs to go around”, reads the report. “Refugees who take jobs also create them. When they spend their wages, they boost demand for the people who produce the goods and services they consume. And they also create jobs for people in complementary lines of work. For instance, refugees who become construction workers create jobs for locals who are supervisors or sell building supplies”.
Legrain also highlighted how refugees could solve an impending demographic challenge in Europe. “By 2030 the working-age population is projected to shrink by a sixth (8.7 million people) while the old-age population will grow by more than a quarter (4.7 million people)”, wrote Legrain. He suggested that an influx of younger refugees could help care and pay for the increasing population of pensioners.
However, Legrain warned that refugees’ positive economic impact would be hindered if Europe does not take immediate steps to accelerate refugees’ entry into the workforce.
He stressed that asylum seekers should be allowed to work while their applications are being processed in order to lessen their burden on the state. He also noted that they should be given language lessons as a matter of urgency, and are housed in areas where there are more jobs, rather than simply in places where the housing is cheapest.
Authorities should also speed up certification of qualifications obtained in countries of origin, Legrain said, citing how a delay in certifying Syrian pharmacists in Sweden is exacerbating a labor shortage in that sector of the Swedish economy.
Quick access to the job market “reduces their reliance on public funds, ensures they are contributing their labor and taxes to the host economy, helps them adapt faster to life in their new society, and lowers the chances that they will end up marginalized from the labor market and society on a longer-term basis”, the report concludes.