Surge in refugees hits young Germans’ job prospects, warns OECD

Tim Wallace 20 June 2018 • 4:39pm

Dortmund, Germany September 6, 2015 — Crowds welcomed refugees to Germany, but economists worry that large concentrations of low-skilled young male asylum seekers could harm the job prospects of already disadvantaged workers through extra competition Credit: INA FASSBENDER/REUTERS

Refugees run the risk of damaging the job prospects of low-skilled young men in Germany, Austria and Sweden as more people compete for jobs, the Organisation for Economic Co-operation and Development (OECD) has warned.

In parts of Germany refugees make up more than 15pc of the unemployed, putting pressure on vulnerable parts of the existing workforce. These new job seekers pose the greatest competition to young men with few qualifications, who are already most likely to struggle.

“In most districts of Eastern Germany, refugees and asylum seekers represented less than 7pc of all job seekers, while the country average was 10.5pc,” the report said.

“In a number of districts of Western Germany, this share reached more than 15pc, especially in cities."

Relatively few migrants are highly skilled, so that part of the pre-existing labour force is unlikely to see much impact.

Likewise, most new arrivals are young, so older workers are not likely to see an influx of competition.

It is the category of 18- to 34-year-old men educated to lower secondary level or less most at risk, the OECD reckons. The size of this group will rise by 21pc in Austria from 2013 to 2020, and by 18pc in Germany. In Switzerland it will increase by 10pc.

Overall this segment of the population amounts to around 5pc of the European workforce, but in specific countries it could be hit disproportionately hard by new arrivals.

“In this segment, especially in Germany, Sweden and Austria, the labour supply shift is significant,” the OECD said.

Workers welcome

The OECD noted that the influx of asylum seekers could be welcome as low unemployment across the continent has created a need for more workers. It noted that refugees make up only a small proportion of Europe’s population.

Even though this is the biggest wave of humanitarian migration the OECD has ever seen in its member countries - at over 900,000 in 2016 - it has only pushed up the working age headcount by 0.26pc between 2014 and 2017.

Refugeee map — Refugee populations have concentrated in particular regions and cities of Germany, making life tougher for low-skilled young men in the area Credit: OECD

The distribution by country is highly uneven, however.

Britain, Poland, Spain and another 12 countries experienced a rise of less than 0.1pc.

Another eight countries had an increase of up to 0.4pc.

In Germany, Austria, Sweden, Greece and Luxembourg the figure was more than 0.5pc, and could even reach 1pc by the end of 2020.

The unequal effects of migration by country and by age group could also turn political opinion against refugees and immigrants more broadly, the OECD warned.

“Even if this sub-group of the population is relatively small, a further deterioration of employment outcomes among them, due to competition with refugees for access to jobs, could have significant negative spillovers on the public perception of the average impact of refugee flows on the economy,” the report warned.

Integrating refugees into the workforce more quickly should help, the OECD said, as it reduces reliance on benefits, aids the economy and helps social integration.