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EMPLOYMENT

‘Job market integration won’t come for free’

If the government doesn't speed up its labour market reforms, Sweden risks losing out on the full potential of an entire generation of foreign-born workers, argues Swedish Confederation of Enterprise (Svenskt näringsliv) economist Li Jansson.

'Job market integration won't come for free'

New data show that immigration has increased and integration improved since 2006. Yet to make sure that people born outside Europe get the chance to catch up, we need a new and clear reform agenda. If we continue on the current path, it will take another 78 years before the employment level of foreign-born workers is as high as that for people born in Sweden.

The recent meeting in Maramö of the leaders of the four government coalition parties marks the half-way point of their second term in power. Unfortunately, however, the political gathering did not end up with the governing centre-right Alliance coalition offering any political updates, despite the tangible need for reforms in Sweden.

SEE ALSO: Flag-raising fail marks Alliance strategy shindig

One the most important societal challenges is how to integrate foreign-born workers in the job market.

Negative headlines sometimes paint the picture that integration will only work if the number of immigrants falls. This new data, however, shows that Sweden has improved integration at the same rate that immigration has picked up.

We already know that people born abroad now increasingly find work. The proportion of people working full-time has also increased more than it has among people born in Sweden.

If we compare the time period 2000 to 2005 with the subsequent five-year period leading up to 2011, we see a marked difference on the labour market.

In those first few years, the proportion of the Swedish population born outside Europe went up by 1.8 percentage points, while employment levels in that group hovered around 50 percent throughout.

During the following period, however, the proportion of the Swedish population born outside Europe went up by 2.9 percentage points. By 2011, the increase in employment went up by 2.18 percentage points for foreign-born residents compared the year before, which outperformed the 2.0 percentage-point increase in employment among people born in Sweden.

Despite the financial crisis, the average employment rate was higher between 2006 and 2011 than it had been in the years before then. By 2011, employment rates among the foreign-born had reached the same record level as during the economic boom a few years before prior to the 2008-2009 financial crisis.

A contributing factor to why integration improved was that employment went up among newly arrived immigrants in particular. In the first few years of the 2000s, employment among new immigrants had actually gone down, but then it picked up after 2006.

In 2011, 26.5 percent of immigrants who had arrived within the past two years were working – the highest level yet.

These results show us that it is possible to be both an open country and to get people into work. The lesson we should learn from the positive outcome between 2006 and 2011, however, is that success doesn’t come for free.

To raise employment rates and improve integration by even by a small amount, we need a reform agenda, including tax cuts, tax deductions for the purchase of services in the home (RUT), and increased incentives in the social security system to get people into the workplace.

We have improved integration but we are nowhere near the target. The gap between people born in Sweden and those born outside Europe is still, in terms of employment, 28 percentage points.

We need extensive reforms to improve integration. Helping businesses operate at the local level has the potential to create 275,000 new jobs, of which 120,000 would be work that does not require high-level technical or academic skills.

On the national level, Prime Minister Fredrik Reinfeldt of the Moderate Party and his three coalition partners must consider lowering the threshold for foreign-born employees to get work, for example by lowering the cost of employing someone, softening the right to work, and by creating functional vocational training programmes.

The employers also have a particular responsibility in securing more introductory jobs.

Li Jansson is an economist at the Confederation of Swedish Enterprise (Svenskt näringsliv)

A Swedish version of this op-ed was originally published on the opinion pages of the Expressen newspaper.

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JOBS

Which regions in Germany need foreign engineers?

Germany’s worker shortage is hitting the engineering sector hard, and there are huge differences in worker shortages between the regions. The Association of German Engineers (VDI) is calling for Germany to be more welcoming to foreign engineers in order to fill the gaps.

Which regions in Germany need foreign engineers?

What’s going on?

Germany is currently facing a worsening shortage of skilled workers, with employers struggling to fill around 630,000 job vacancies in various industries. The engineering sector is particularly affected and saw a 21.6 percent increase in vacancies in the fourth quarter of 2022 compared to the same period in 2021.

According to the latest figures from the Association of German Enginners (VDI), there are currently 170,300 vacancies for engineers.

READ ALSO: ‘600,000 vacancies’: Why Germany’s skilled worker shortage is greater than ever

There’s a particular shortage of civil engineers, computer scientists and electrical engineers which is leading to hold-ups in public construction and digitalisation projects.

Which regions are particularly struggling?

Though there are shortages everywhere, there is a widening gap between the numbers of foreign engineers in large cities and those in rural areas.

In Munich, for example, foreign nationals make up almost 13 percent of the total number of engineers. In the Stranberg district of the city, more than one in four engineers are foreigners.

The employment of foreigners in engineering professions is highest in Berlin where they make up 18.6 percent of engineers, followed by Hamburg with 13.3 per cent and Bavaria with 12.7 per cent. Schleswig-Holstein has the lowest proportion of foreigners out of the western German states with a share of 4.9 per cent.

Employees of the Tesla Gigafactory Berlin Brandenburg work on a production line of a Model Y electric vehicle. Photo: picture alliance/dpa | Patrick Pleul

In eastern states like Mecklenburg-Western Pomerania and Saxony-Anhalt, foreign engineers are few and far between, despite being desperately needed.

There are also differences between the states in terms of the types of engineers needed. For example, in the last quarter of 2022, the total number of vacancies in information technology jobs in Hesse increased by 49.7 per cent, in Baden-Württemberg by 45.2 per cent and in Berlin/Brandenburg by 40.1 per cent, while the number in Rhineland-Palatinate/Saarland decreased by 23.5 per cent.

READ ALSO: Germany sees ‘over 550 percent increase’ in Indian IT workers over decade

The demand for civil engineering jobs, however, decreased significantly in Berlin/Brandenburg (-3.8 per cent), Saxony (-7.7 per cent) and Saxony-Anhalt/Thuringia (-7.8 per cent).

According to the VDI, the huge differences in the proportion of foreign engineers mainly depend on which universities and companies there are in the region.

If there are technical universities with lots of foreign students, this increases the proportion of engineers with foreign passports in the region.

The presence of factories or international corporations has a similar effect. For example, the proportion of foreign engineers in the Oder-Spree district in Brandenburg was stuck at two to three percent for a long time. But at the end of 2020, that figure tripled within a few months – thanks to the car manufacturer Tesla opening a factory there.

Germany needs to be “more welcoming” to foreigners

Head of the VDI, Dieter Westerkamp has said that without a strong influx of foreign skilled workers, Germany will not be able to close the gap in the labour market for engineers and that this could ultimately slow down Germany’s economic development.

READ ALSO: IN DEPTH: Are Germany’s immigration offices making international residents feel unwelcome?

The VDI is now calling for Germany to make itself more attractive to foreign engineers. The German government recently published a new draft law which aims to plug its skills gap by adapting its immigration laws. Amongst other things, the proposals aim to loosen the requirements for Blue Card applicants and to bring in a points-based job seekers visa. 

However, Westerkamp complains that some immigrants wait months for a visa appointment at the German embassy and that staff shortages at the foreigners’ offices lead to delays.

A recent study by the Bertelsmann Foundation’s Skilled Migration Monitor also found that managers increasingly complain about bureaucratic and legal hurdles as well as difficulties in the recognition of qualifications for foreign workers. 

Westerkamp said that Germans must understand that their standard of living can’t be maintained without more immigration and said that, people must “give foreigners the feeling that they are welcome in this country”. 

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