Meeting Report

The Gifford Center and the UCB EUCE supported comparative migration conference held at the German Marshall Fund June 10, 2014. Over 30 participants from universities, think tanks, and US and other governments participated in the discussion of two major issues, intra-EU migration and migrant integration.

The EU is built on four fundamental freedoms, the freedom to move goods, capital, labor, and services freely among member states. Freedom of movement of labor is the most controversial of these four freedoms, since workers can move from poorer to richer member states and compete for jobs with local workers.

When poorer countries join the EU, existing member states may restrict the influx of workers from new member states seeking jobs, generally for up to seven years. The EU often provides aid during this transition period to improve infrastructure in new member states, which encourages private firms from older and richer EU member states to invest in poorer countries to take advantage of lower wages. The hope is that economic development will narrow economic differences between old and new member states so that when the freedom of movement arrives, there will be little disruptive migration.

The share of EU nationals living in another country roughly doubled between the early 1990s and 2012, from two to four percent, and there are now 20 million intra-EU migrants among the EU’s 500 million residents. Over 10 percent of intra-EU migrants are Romanians, 2.3 million, followed by almost 10 percent Poles, 1.9 million, and Italians, 1.7 million. Germany and other EU countries with low unemployment rates are attracting intra-EU and non-EU migrants. According to the OECD, Germany was second only to the US as the recipient of migrants in 2012.

There are many reasons to expect more intra-EU migration, including the accession of poorer central European countries as EU members, enabling migrants to earn higher wages by moving to another EU member state. Many EU leaders want to encourage more intra-EU migration. However, anti-EU and anti-migrant political parties who did well in May 2014 EU Parliament elections do not favor more intra-EU migration or immigration from non-EU countries.

One of the most controversial types of intra-EU labor migration involves posted workers, as when a Polish staffing firm hires Polish workers in Poland and sends or posts them to jobs in higher-wage Germany. Posted workers are considered employees of their country of origin, so the Polish workers posted to Germany are considered Polish workers, and their payroll taxes flow to their home governments, that is, posting workers abroad provides both jobs and taxes to support the sending country’s welfare system.

The major issue in the richer EU countries to which most posted workers move (40 percent of the 1.5 million posted workers in 2011 were in France and Germany) is the appropriate minimum wage.  If the host country has a minimum wage, host governments can require that posted workers receive at least this minimum wage. This rule is spurring most EU countries to develop minimum wages.

If the number of posted workers continues to rise, there may be pressure on governments to shift the financing of social welfare systems from earnings to general tax revenues, much as increased trade in goods forced standardization of VAT rates. Under the current system, the payroll taxes associated with e.g. the earnings of Poles in Germany flow to the Polish government.

In the US, inter-state migration has decreased significantly over the past quarter century for reasons that range from more uniformity in amenities as well as more international migration, since newly arrived foreigners are most likely to move to opportunity. About 10 percent of persons born in Mexico have moved to the US. Mexico-US migration has declined recently, as has migration within Mexico.

German leaders denied that Germany was a country of immigration until the 1990s, when it was clear that millions of foreigners had settled in Germany and more were continuing to arrive with the intent to settle. Over the past two decades, there has been sea-change in the attitudes of German leaders, who now talk of “welcome culture” that embraces foreigners.

The effort to develop a welcome culture and an inclusive society takes many forms, from government integration plans and measures to assess their effectiveness to the German Islamic Conference that provides an official forum for the German government to interact with Muslim religious leaders. European governments, beginning with the Netherlands, developed individual integration contracts that included sanctions for immigrants who failed to learn Dutch. However, the German government elected to support “integration agreements” that stressed voluntary agreements between counselors and individual migrants rather than contracts that include sanctions for failure to learn German.

Germany has moved from discussing foreigners (non-German citizens) to residents with a migration background, defined as being born outside the current German state or having at least one parent born outside Germany; almost 20 percent or 15 million of Germany’s 81 million residents have a migration background. By most measures, second- and third-generation residents with a migration background are better integrated than earlier arrivals, that is, Germany is succeeding in integrating migrants.

Germany has successfully integrated waves of newcomers, including 12 million Germans who moved mostly to West Germany after WWII. German leaders today appear confident that migrants can be integrated into a changing Germany. They emphasize that Germany needs immigrants for economic and demographic reasons, which helps to shift from a reluctant country of immigration to a nation more confident that it can attract and integration newcomers.

The US has not and does not have an explicit immigrant integration policy, although most immigrants to the US have sponsors, including US relatives, employers, and NGOs that help refugees to resettle. Many general US policies promote the integration of immigrants, from birthright citizenship that ensures that children born in the US are automatically US citizens to flexible US labor markets that help immigrants to get the higher-wage jobs most seek and anti-discrimination policies that make it easier for minority immigrants to integrate. Americans tend to identify with civic ideals rather than English, religion, or other attributes that could be used to define integration into a country’s culture.

Most studies show that the single most important factor promoting and demonstrating integration is knowledge of the host-country’s language. Many European countries including Germany encourage or mandate that newcomers learn their language. The US does not mandate that immigrants learn English, but most newcomers soon learn that climbing the US economic ladder is much easier if they know English. Mandates versus incentives are an ongoing source of controversy over appropriate integration policies.