Mixed feelings in the Netherlands as migrants come to Europe
The handling of the crisis by the Netherlands reflects the Dutch view that, while asylum-seekers should be welcomed in the country, economic migrants should not.
An oft-underreported aspect of the arrival of migrants (be they asylum-seekers or economic migrants) is the economic consequences they have on the country they want to settle in. While political and ethical questions are without a doubt of supreme importance in a crisis of this magnitude, it would be wrong to neglect the economics of it.
How should we assess the economic and financial impact of this migration on Dutch businesses and government?
Which sectors stand to gain?
One way to look at this is by analysing which businesses have traditionally benefited from the arrival of migrants. Experience with inflows of Central- and Eastern European labourers shows three sectors in particular that stand to gain in the short- to medium-term.
In the horti- and agricultural sector, many immigrants are employed to pick fruit or vegetables. This typically reaches a peak during the summer months, as harvests are seasonally dependent. In construction, companies can now rely on a consistent supply of labour for various jobs ranging from painting to plumbing. Finally, in the industrial production sector migrants successfully compete with natives as well.
These sectors are similar in that they offer mostly low-skilled jobs that are standardized (thus making it easy to substitute employees) as well as labour-intensive. As the majority of new migrants do not tend to be highly-educated and at any rate do not speak Dutch on arrival, the jobs available to them, at least initially, are low-skilled. This increases the pool of labour available for low-skilled jobs and pressures wages downwards, as employers in the aforementioned sectors see their bargaining position strengthened when negotiating the typical Dutch sectoral “collective employment agreements” (‘CAOs’).
To this list of beneficiaries may be added employment agencies, who have already announced their willingness and eagerness to work with refugees.
Reception by national and local governments
The reception of migrants has been mixed. The Netherlands has sent aid to Syrian refugees in the Middle East; exemplified by quintessential Dutch donation of hundreds of bikes to refugees, facilitated by the Minister of Foreign Trade and Development Cooperation Lilianne Ploumen.
There is a stark difference between how economic migrants and asylum-seekers are viewed: whereas a majority of Dutch citizens agree that asylum-seekers from conflict zones such as Syria should be welcomed, only 9 per cent of the population holds a favourable view of economic migrants.
The advice of the Social Economic Council on these issues also weighs heavily, as befits the Dutch ‘polder-model’. In December last year, it issued a report on labour-migration that reflected on the crumbling public support for immigration in times of economic crisis. It warned about an increase in “suspicion and societal opposition to free movement and migration”, especially from citizens employed in the low-skilled sectors described above.
The handling of the crisis by the Dutch national government reflects these views. While it has committed to the European Commission’s recent proposal to take in 7,000 asylum-seekers on top of the 2,000 already planned, both the social-democrats and the liberals that form the coalition-government have consistently advocated for a more restrictive policy regarding economic immigration.
Moreover, the liberals have insisted that even the number of refugees welcomed be brought down, urging that more of them should be accommodated in their own region. The main argument is that the Netherlands does not have enough social housing to accommodate these refugees and that the effect on the welfare state will be negative.
It should be noted that the vast majority of Syrian refugees are in fact in Syria’s neighbouring countries. Lebanon houses over a million registered refugees and Turkey accommodates close to two million. The EU has so far seen fewer than 300,000 asylum applications by Syrians.
Interestingly, many local governments have shown a different attitude to refugees. Over 50 Dutch municipalities now actively accomodate refugees in local housing centres. They do this not only because they see it as a moral issue, but also because they see the economic benefits of having hundreds of extra customers who receive a monthly stipend from the national government.
Long-term economic effects
The advice of the Social Economic Council stresses that in the long term, the Dutch knowledge-economy needs more highly-educated immigrants to fill vacancies caused by an aging population. A number of the much-needed skilled workers may be drawn from the Syrian refugees, who tend to be more highly educated than the average economic migrant. This is necessarily a long process, as they need to be integrated into Dutch society first.
While the social consequences of increased immigration may be increased polarization in some quarters, it is much harder to predict the long-term economic effects for the welfare state. Whereas research has found that economic migrants on average tend to contribute more in taxes than they receive in government subsidies, the hope that immigrants could compensate for the diminishing native labour-population has also been shown to be overly optimistic.
