Mass immigration may cost Germany up to €19.2 trillion, and has already cost the country €5.8 trillion, according to a top German academic on public finances, Prof. Bernd Raffelhüschen, of the University of Albert Ludwig University of Freiburg.
Often referred to as the “pension pope,” Prof. Raffelhüschen’s study blows a hole in the narrative promoted by pro-migration parties and business leaders, who claim that mass immigration will save Germany’s public finances and the job market.
“Immigration as it has been happening so far is costing us €5.8 trillion overall economically,” writes the professor in a new study.
However, unlike some other economists who say that Germany is being harmed financially via unskilled labor and needs more skilled labor, Raffelhüschen also says that importing skilled labor will actually cost the German tax and pension system more than entirely shutting the borders to any immigration.
The large debt figures provided by Raffelhüschen may not be so far off the mark, at least when compared to other countries. As Remix News previously reported, several top Dutch professors recently released a study detailing how migrants have cost the Netherlands a minimum of €400 billion since 1995, and the Netherlands has accepted far fewer migrants than Germany. In Norway, researchers found that only half of migrants are employed despite the state spending €6.6 billion on workforce integration projects over the course of 10 years.
Prof. Raffelhüschen shows in his study that due to Germany’s rapidly aging society, there is a “huge gap between what businesses and employees pay into the German tax and social system,” which includes taxes, daycare, pensions, and health insurance, and what they can demand in the future in terms of pension, health care, and social welfare.
This “sustainability gap” will grow to a massive €19.2 trillion if Germany continues to allow 300,000 foreigners into the country every year, according to the professor. As he notes in his study, the integration process takes an extremely long time for most foreigners, and during this time they have little income — and often no income — and therefore there is a substantial lag regarding their contributions into the social system. Even for those who do become employed, they often feature far lower income levels, often to the point that they still qualify for welfare, which results in a tremendous burden on Germany’s ample social welfare system.
A fence around Germany
Raffelhüschen also explained what would happen to Germany if the country theoretically “put a fence around Germany from now,” which would mean zero immigrants coming in.
Under such a scenario, it would close the future financial gap from €19.2 trillion down to €13.4 trillion, which would be €5.8 trillion lower.
“That is the price of immigration in our current system,” said the social expert.
Raffelhüschen breaks down how he comes to his conclusions, writing that on average, migrants require six years to integrate and join the German labor market and contribute very little to the pension system during that time — or nothing at all.
Even after entering the job market, if they do at all, they earn less and therefore contribute very little to the social system.
However, these foreigners also enter the statutory health insurance system, where they receive the same benefits as Germans who have sometimes been paying into the system for decades.
The professor offers an example: “An asylum seeker comes to Germany at the age of 26, is rejected after two to three years, but remains here with tolerance. Then he gradually begins his first job, gets qualified and, at the age of 35, begins a career as a tax and contribution payer. Because his pension entitlement is low, he receives basic security as a pensioner — for which his contributions would never have been enough.”
He notes that “it is not worth it. It’s all far too expensive.”
Skilled labor will not save Germany’s pension system
The professor goes further, calculating what would happen if Germany accepts 100,000 highly skilled foreigners on top of the current 300,000 migrants per year, which would cost the German social system €14.2 trillion a year. However, this actually would still cost more than accepting a system with no immigration, where the “sustainability gap” would only amount to €13.4 trillion.
Raffelhüschen says, “If we carry on as before, we’d be dumb as a rock. Although the age structure of migrants potentially has a demographic rejuvenation dividend, this does not lead to a positive fiscal balance of migration in any of the scenarios considered.”
He argues that Germans need to work longer and have fewer pension benefits, that only legal residents should not have access to the social and pension systems, and that contributions need to increase.