Debate continues over freedom of movement

In April 2012, Germany’s Institute for Employment Research published new figures on labour immigration. The latest findings show that there has been an increase in the number of people coming to work in Germany from eight new accession countries whose workers were granted freedom of movement a year ago. However, the social partners and the Federal Employment Agency have stressed the need for more and better opportunities for migrants in Germany and a more open immigration policy.

Background

After a seven-year adjustment period, the German labour market was opened to Czech, Estonian, Hungarian, Latvian, Lithuanian, Polish, Slovak and Slovenian workers on 1 May 2011. The new legislation enabled people from these countries to move freely to Germany to take up work and settle. As the first anniversary of the regulations passed on 1 May 2012, the Institute for Employment Research (IAB) took a closer look at the immigration data available from the Federal Employment Agency (BA) and examined the effects of the new law.

Immigrant labour increase in 2011

The data for 2011 show that employment liable for the payment of social security contributions and marginal employment among workers’ groups from the new accession countries rose by 82,000 people. Most were involved in temporary agency work. An additional 14,200 workers found employment thanks to the new regulations.

The sectors employing the largest number of workers from these countries were the construction industry, with an increase of 11,000 people, and manufacturing, with 10,500 more workers. Other sectors also profited from the new rules, such as the hotel and restaurant sector which registered 7,900 more employees and the health sector with 4,600 more.

Unemployment figures for immigrant workers remained stable. The IAB therefore concludes that the new arrivals were successfully integrated into the German labour market.

The research institute identifies only one drawback to the latest developments: The increase in employees from the eight accession countries was only ‘moderate’ in 2011. The positive effect generated by a higher number of immigrant workers in the German economy therefore seems to remain limited.

How to attract more skilled foreign labour is, however, a major concern for the German social partners and the federal government. The background to this debate is a shrinking German population and the question of how to secure enough labour, and especially skilled labour, in the future. Labour shortages could negatively affect the competitiveness of German business.

Ongoing public debate

The social partners had already debated the pros and cons of labour immigration in 2011. For example, when the German labour market was opened up to workers from the eight new accession countries on 1 May 2011, employers hoped to attract more people to occupations threatened by, or already experiencing, labour shortages, including engineers, doctors and IT specialists. The unions, on the other hand, feared low wages and the replacement of established workers by new migrant labour, and therefore called for a greater protection of migrant workers’ rights (DE1105019I).

The debate continued throughout last year and was reignited in 2012. It was highlighted on the occasion of the second and third readings of a bill to implement the European Union guideline on easier entrance conditions for highly qualified non-EU labour, Council directive 2009/50/EC, into German law.

The bill, passed by the lower house (Bundestag) and upper house (Bundesrat) of the German parliament at the end of April and middle of May 2012 respectively, introduces the so-called EU Blue Card. This card eases labour market entrance regulations for non-EU graduates or similarly highly qualified workers. The EU Blue Card is to be issued to non-EU residents who have an employment contract with an employer based in Germany and a minimum annual gross salary of €44,800 (reduced from €66,000), thereby granting access to Germany and its labour market. It should be noted that, with an annual gross salary of just under €35,000, the minimum pay for urgently needed professions such as engineers and doctors is even lower.

Further measures presented in the bill relate to foreign graduates of German universities. Up to now, they have been allowed to stay in Germany for one year after their graduation in order to look for a job. This period has now been extended to 18 months. In addition, the rules governing part-time employment for foreign students have been relaxed. The new law is to take effect on 1 July 2012.

Social partners’ views

In this context, the German Confederation of Employers’ Associations (BDA) stressed once again the need to open the German labour market and welcome skilled labour in order to counter the labour shortage in certain professions in Germany. BDA also supports the EU Blue Card and in a press statement welcomed the latest vote by the German parliament (in German) in favour of its introduction.

The employer organisation highlights the global competition for qualified labour and the consequent need to improve German immigration regulations. In addition to the Blue Card, the BDA also welcomed a new kind of visa introduced by the latest bill that will give non-EU residents with a university or similar degree six-months to search for a new position in Germany.

The Confederation of German Trade Unions (DGB), however, issued a press statement (in German) saying that while it supports easier immigration for EU and non-EU residents in general, it does not favour the BDA’s strategy. The confederation has particularly criticised the bill on the EU Blue Card, and it does not approve of the lower minimum wage limits proposed in the bill.

Instead it wants to see jobs made more attractive to foreign workers through better wages and working conditions. The DGB wants a fundamental reform to simplify German immigration law, rather than the piecemeal introduction of additional measures which would only make already complicated legislation even more complex. It advocates more equal rights for both EU residents and non-EU residents who have already lived in Germany for a long time, and improvements for spouse and family member immigration. It is also calling for an immigration law that protects all workers, including migrants, from low wages and inferior working conditions.

Recommendations on immigration policy

Finally, the integration advisory service has also commenced its work. It was asked by the Federal Commissioner for Migration, Refugees and Integration to propose measures to interest more foreigners in working and living in Germany. It is headed by Heinrich Alt, a member of the Federal Employment Agency’s Executive Board.

On 27 April 2012, the Board put forward its recommendations and views on current German immigration policy in a report, Working and Living in Germany – your future (in German, 464Kb PDF), pointing out that the law needed to be adapted to new circumstances.

The Board has developed a three-phase model, representing each stage of a new immigration culture. It says that:

  • qualified labour can only be attracted to work in Germany if prospective workers are helped at all three stages of their immigration, beginning in their countries of origin, then when entering Germany, and finally when settling down;
  • while German immigration law was once designed to restrict access to the German labour market for foreign workers, it must now adopt a welcoming and positive stance towards labour immigration. This new attitude needs to be reflected at all times in the behaviour of German officials and the relevant staff in companies, universities and schools.

The advisory board recommends that the Federal Government should:

  • develop a single website or internet portal providing information on all immigration issues;
  • grant easier entrance to Germany for the non-German staff of German companies’ foreign subsidiaries;
  • ensure that German embassies and consulates adopt a more positive attitude towards immigration;
  • utilise the potential of migrant organisations in Germany and ask for their help in providing advice to immigrants.

Sandra Vogel, Cologne Institute for Economic Research (IW Köln)

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