Germany Makes a Business Decision

Germany just announced that it could accept an additional 500,000 refugees when other countries are jockeying to accommodate as few as possible. As much as the announcement was portrayed as a humanitarian effort, it is just as likely a simple business decision.

Few members of the European Union, or those outside of the EU for that matter, would accuse Germany of fuzzy-headed liberalism. Their insistence on economic reforms focused on austerity, curtailed government benefits and a balanced budget (or at least closer than most nations manage now), has earned them the enmity of most Greeks and  economic liberals throughout the continent.

While I can’t criticize the undeniable human benefits of Germany’s decision, it also reflects two key factors that are important for any business or economy; the size and talent of its workforce.

Like northern hemisphere nations from Canada to Japan, and including the United States, China and the entire European Union, Germany’s working population is ageing. Multiple studies by both their government and private think tanks predict a shortage of up to 1.5 million skilled workers in the next five years.

Any shrink in new and skilled workers (who are also consumers) will slow economic expansion. The EU countries with the lowest birth rate over the last 30 years are Greece, Spain, Portugal and Italy. Japan is already feeling the impact. China will be hit worse, but a bit down the road ( from 2030 to 2050). In the US, the massive exiting of the Boomers from the workplace has begun, and will accelerate over the next ten years.

liberty and NY skylineThe key term is “skilled” workers. As technology whittles away at the middle class, few societies are say “Give me your tired, your poor, your huddled masses” anymore. That’s where Germany’s offer is brilliant.

The Atlantic published a great look at the Islamic State in its March issue. Trained by ex-KGB agents, IS infiltrators enter a city in advance of their military force. They attend town meetings and other public events, noting the names of community activists, elected officials and business executives. When they attack in force, assassination squads equipped with the names and home addresses of these leaders go from house to house eliminating them. Their objective is to decapitate any local nucleus for organization.

The result has been to create a refugee population that is generally better educated and wealthier than their countrymen. Anecdotally, a friend who visited Greece a few weeks ago tells the story of a Syrian refugee’s frustration at the inability of Greek shopkeepers to make change for 500 Euro notes, the smallest denomination he carried. Many of these refugees are anything but destitute. Germany is seizing an opportunity to add much-needed skills (and possibly capital) to their worker population.

In the meantime, the run up to the U.S. Presidential nomination continues to generate waves of anti-immigration rhetoric, ranging from the racist to the silly. Mass deportations, amending the Constitution to limit citizenship and building a giant wall are populist sops that, unfortunately, play well with a frustrated population.

The problem isn’t immigration, it’s the right immigration. I understand that the egalitarian ideal expressed in “All men are created equal” is part of our national psyche, but does it mean that we have to run our economy into the ground in its observance? I’m certainly not racist, but no rational businessperson would argue that a Latin American subsidence farmer has the same economic potential as a Chinese PhD.

Germany has seized a business opportunity by reaching out to talent that can positively impact its economy. The United States can do the same by introducing a sensible immigration policy that includes some consideration of economic merit.

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7 Responses to Germany Makes a Business Decision

  1. Dan Bowser says:

    Thanks for putting a face on the other side of the immigration issue. Our country benefited greatly economically from immigration in the past. We can benefit now while helping many people at the same time.

    I wonder if we as a nation can get past the frustration of extreme political self-interest and see through the pandering on the part of some candidates.

    I’m hopeful but concerned.

  2. David Cunningham says:

    This observation is spot on. Japan will suffer worst because their racial intolerance is so bad that they cannot contemplate the an immigration program at any scale that would save them. On a visit to Yokohama I had repeated experiences in being denied access to jazz clubs, because they were “Japanese Only”. It was a trivial discrimination but it made me aware how bad it can make you feel.
    The least intelligent of the current US immigrant phobias are the proposals to repeal the 14th Amendment to the Constitution – “All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the state wherein they reside.” and to repeal the Dream Act that removes the threat of deportation for children of illegal immigrants. In most cases, we have already educated these young people and they are an economic benefit to their communities.
    I wish “Cost / Benefit” analysis could be applied to many of the challenges that face the USA.

  3. Katrin Anger says:

    Good point!
    While there are many perspectives that can be taken on this topic, this is certainly one with a positive side effect. – Whilst I don’t think that this is the main motivation for the German government, it could indeed prove true and benefit Germany in a few years … if they succeed on integration.

  4. Several years ago I was traveling in Norway and was struck by the large population of Somali immigrants there. Norway also has a negative population problem and had been attracting immigrants from many countries including the US becuase they seem to be color blind according to several former American black people I met. they would rather raise their children there there away from gangs and low expectations. Norway only wants you to commit to raising your children there and will subsidize you to do so with parental leave, education and job training for the parents. I was surprised to see so many olive and dark skinned people in the land of the blond, blue eyed Norsemen even outside of the urban areas..

  5. Mike Wright says:

    On Point. One other factor in Germany’s favor is the effectiveness with which they assimilated a less skilled East Germany population back in so efficiently and effectively. We must make education and training of the new immigrants a priority so they can help our economy grow, and not just to perform low skilled low paying jobs.

  6. We all should be champions for open immigration and free movements cross the borders, as long it is based on the trader principle. If you have the right to your life, you should be able to live and work wherever you want, in a free world.

    Immigration as become a hot topic in Scandinavia. I hope people will learn from the melting pot and the land of opportunity: the United States of America.

  7. As with most European countries, meetings etiquette in Germany relies on professionalism, good business sense and formality. Bearing the above in mind, together with a positive attitude will ensure good results.

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