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Refugees in Sweden - Seeking asylum and jobs

2016-11-04 13:46:10

Too few refugees, not too many, are working in Europe

Nov 5th 2016 | STOCKHOLM

WHEN Ameen first arrived from Aleppo, he was thrilled to have made it to

Sweden. Speaking as he takes a break from a protest near parliament, he says he

thought there would be plenty of jobs. But none was available. Now that the

government has made it harder for family members to join the refugees, some

have taken to Stockholm s cobbled streets. The rules on asylum-seeking in

Europe mean refugees like him have to stay in their country of arrival. If we

could leave, many of us would, he says.

A big reason refugees cause alarm across Europe is the fear that they will

steal jobs. But a more serious problem may be their joblessness. France,

Germany and Norway all have big employment gaps between native- and

foreign-born workers. But the gap is widest in the Netherlands and Sweden and

these figures do not yet include the 163,000 asylum-seekers who arrived in

Sweden last year (see chart).

In part, Sweden is a victim of its own generosity and success. No European

country has a larger proportion of refugees in its population and in 2015 none

welcomed a larger flow of asylum-seekers, proportionate to its population, than

Sweden did. Employment rates for refugees are no lower than in most European

countries, but the difference with Swedish-born workers is striking. Partly it

is because many Swedish-born women work and Swedes are highly educated.

Nevertheless, fears are mounting about the social impact of the two-tier labour

market that is developing. Magnus Henrekson, an academic, fears further

ghettoisation and alienation.

On the surface, Sweden has one of the least troubled labour markets in the

world. The economy is growing, vacancies are plentiful, only 5% of

15-74-year-old native-born workers are jobless and the unemployment rate is

falling. But foreign-born workers are three times as likely to be unemployed,

and the ratio is rising. For those from outside the EU it is higher still

(22.5% are unemployed). Hidden discrimination, housing problems and a Swedish

reliance on informal networks help explain the gap. But many refugees simply

lack the skills for Sweden s job market.

The issue is not unique to Sweden. In a report published in September, the OECD

and UNHCR found that many employers do not see recruiting refugees as a

business opportunity, but as a CSR (corporate social responsibility) issue.

Large employers made a big fuss about providing apprenticeships and mentoring

schemes, but few offer jobs. The obstacles employers cite include uncertainty

about refugees qualifications and their right to work, sceptical public

opinion, and worries that language barriers will mean lower productivity.

The concerns reflect changes in Sweden s employment market. Fewer than 5% of

jobs are now low-skilled, requiring less than a high-school qualification,

compared with 9% in Germany and 16% in Spain. Countries such as Greece and

Italy have larger shadow economies, helping explain why refugees there have

higher employment levels than natives. High-school diplomas are Sweden s

biggest divider, says Anna Breman, chief economist at Swedbank. Nearly all

Swedes have them, yet only half of new arrivals do, according to government

statistics.

The paradox, says Thomas Liebig, from the OECD, is that Sweden has among the

most advanced refugee-integration policies. A two-year programme is meant to

make refugees job-ready , but is often too long for educated refugees and too

short for those lacking basic literacy and numeracy. Only 22% of low-educated

foreign-born men and 8% of women found work in the year after completing the

programme. On average it takes seven to eight years for newcomers to find

employment. According to a survey in 2014, across Europe it takes refugees and

other beneficiaries of international protection 20 years to reach employment

rates similar to natives. This contrasts with America, where research has shown

that refugees find work faster than other immigrants, and even do better than

economic migrants over time.

Highly educated migrants also lag behind their Swedish-born peers in finding

work. The biggest difficulties are posed by the large group with few

qualifications. The obvious way to help is to train them better, particularly

the young. Around 70,000 of last year s arrivals were minors, half of them

unaccompanied. But a large proportion of 15-24 year-olds, especially women,

drop out of education or training.

Ms Breman thinks the real bottleneck in Sweden is that the lowest wages are so

high. But cutting wages or lowering the minimum wage is impossible: powerful

unions would object. So instead, successive governments have experimented with

wage subsidies for certain sectors, such as restaurants, as well as tax

credits, for example for house renovation. Supporters argue that such subsidies

compensate employers for taking a risk and a (temporary) fall in productivity.

Worries about unemployed refugees have been masked by the recent strong

performance of Sweden s economy ironically boosted by increased spending on

refugees. (IKEA, a furniture chain, is reported to have run out of mattresses

at one point.) But there is a growing realisation that Sweden and Europe as a

whole cannot afford to delay reforms to ease the integration of refugees. The

numbers now are simply too big.

Like most of Europe, Sweden s population is ageing. Educating and integrating

young refugees could help plug gaps in the labour market. Failure to do so will

exacerbate pressure on government spending and could lead to permanent

exclusion and further polarisation. Europe is right to be worried about

refugees and jobs albeit for the wrong reasons.