Refugees will struggle to find jobs, bank warns

Many of the refugees arriving in Germany could initially find it difficult to get a job because of their young age and lack of qualifications, the German central bank or Bundesbank said on Monday.

Refugees will struggle to find jobs, bank warns
Refugees in Hesse. Photo: DPA

The Bundesbank estimated that the net immigration of asylum seekers — ie. the number of inflows minus outflows — could total over one and half million between 2015 and 2017.

Of these, “the share of non-employed persons will probably remain comparatively high for the time being as many newcomers will first need to acquire German language skills and other qualifications,” the central bank wrote in its monthly report.

Germany, the EU's biggest economy, this year looks set to take in one million people fleeing war and misery in what the government has said is its biggest challenge at least since national reunification a quarter-century ago.

Germany will take in more refugees than any other country in Europe, but many people are worried about the economic consequences of doing so.

The Bundesbank said that, initially, the rate of participation of the new arrivals into the labour force would be “just under 50 percent.”

That was “well below” the average for the general population, roughly three-quarters of which is in the workforce.

The aggregate labour supply was projected to grow by around 520,000 persons – or one and a quarter percent – in cumulative terms until the end of 2017, the Bundesbank said.

But, “the results of empirical studies suggest that this additional pool of labour will initially push up unemployment owing to low or irrelevant skills as well as cultural and linguistic barriers, with refugees only gradually gaining a foothold in the labour market,” the Bundesbank said.

According to the IAB Institute for Employment Research, the level of unemployment among foreigners from war-torn and crisis-stricken countries, many of whom were likely to have entered Germany only recently, “stands at around 40 percent,” the report said.

“Despite the currently favourable labour market situation, the projection assumes an unemployment rate of 70 percent in the first 12 months following recognition as a refugee, falling to a still sizeable 40 percent in the third year.”

This translated into an employment rate of around 15 percent in the first year following the granting of refugee status, rising to roughly one-third after three years, the Bundesbank said.

Turning to the general economic effect of refugee immigration, the Bundesbank estimated it could help boost domestic demand.

“The supply effects and the long-term impact on public finances will largely hinge on how quickly and effectively refugees are integrated into the labour market,” the central bank said.

“In the short run, the effects are likely to be comparatively modest due to the presumed low initial participation rate and high unemployment among these refugees, and their integration will remain a major challenge for some time to come,” it concluded.

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INTERVIEW: What is the biggest problem foreigners face when applying for German citizenship?

Many foreign nationals are considering applying for German citizenship, especially as the law is set to change in future. The Local's Germany in Focus podcast asked an expert for advice on the process.

INTERVIEW: What is the biggest problem foreigners face when applying for German citizenship?

For lots of people building a life abroad, applying for citizenship of their country of residence is a major step that cements integration. 

But the German rule that means non-EU nationals can’t hold more than one citizenship if they become German – unless they can argue an exception – means lots of people hold off from naturalising. 

That is all set to change under new plans from the German government which will allow people to hold more than one nationality when they become German. 

The plans would also see the number of residency years needed slashed from eight to five – and even to three in some cases. 

Although the government’s plans are still in the works, Berlin-based immigration lawyer Sven Hasse told the Germany in Focus podcast that he expected the reform, which is likely to come into force next year, to prompt a wave of new applicants. 

“The timeline for naturalisation is shortened from eight years to five years (in the draft law) – that of course brings a lot more applications at the moment the law is enforced because you have three years more on the application process,” he said. 

“It’s possible to shorten it to three years if you have C1 language skills and other special achievements like a good job, a good education or you work in an NGO or even in a football club. So that brings a lot more applicants to the process and the right to apply.”


Hasse added that because Germany will in future allow people to hold multi-nationalities, it would encourage those living in Germany who are originally from countries like the US, Australia and Canada to get a German passport.

“My clients from these countries do not apply for citizenship (currently) for this reason,” he said. “So they of course would love to do so after the law has changed.”

But what are some of the hiccups people face when applying for citizenship in Germany?

“The main problem people run into at the moment is the appointment situation,” said Hasse.

He said part of the issue is that in most cities, there are scores of people looking to get naturalised, particularly those who came to Germany as refugees in 2014 and 2015 and now qualify for citizenship. 

“They (authorities) are not capable to offer the amount of appointments required for the number of applicants who want to apply for citizenship so that is the main and the biggest problem.”

From 2024, the capital Berlin plans to run a centralised office for dealing with German citizenship in the hope that it will transform the process. 

Currently, citizenship applications are being processed by the administrative offices (Bürgeramter) in each of Berlin’s districts. Through the new office, set to belong to the foreigners’ authority (Landesamt für Einwanderung), the capital’s senate aims to increase the number of residents who receive citizenship each year from 8,000 to 20,000.

“They (district offices) are letting the applicants know that they will contact them again in 2024 knowing that another authority will contact them,” said Hasse, regarding the situation in Berlin.

“Some district offices frankly say – ‘please apply in 2024 once the new authority is in force’. That (waiting times) is the biggest problem. But the same situation you’re going to see in Frankfurt, Potsdam, in other cities.”

A sign on the State Office for Immigration (LEA) on Friedrich-Krause-Ufer in Berlin.

A sign on the State Office for Immigration (LEA) on Friedrich-Krause-Ufer in Berlin. Photo: picture alliance/dpa | Jörg Carstensen

Berlin is planning to increase the number of caseworkers from 70 to 200 under the centralisation plans. 

But Hasse said he’s “not optimistic that the appointments situation is going to change after the new law has been implemented”.

“I expect a high number of new applicants,” he added. 

Should people who still want to keep their current citizenship apply now or wait until the new law is in force?

Hasse pointed out that the application form currently asks people if they are willing to give up their citizenship. 

“If you are not willing to give it up, the authorities can ask for reasons or exceptions or they can reject their application,” he said.

“Once the law has changed no one is going to ask you to give it up. But of course, it is still in the process and there is no guarantee that it is implemented in January next year, although it is highly probable.

“So the answer is: if you want to be sure that you become a German citizen (and hold onto your citizenship) then you should wait until the law is in force or at least signed by the president. And if you consider giving up your citizenship, or if you are willing to gamble a little bit, then, of course, you should apply.”