Economies Will Continue to Rely on Migration Post Pandemic

The global health pandemic has highlighted the vital role of international migration and migrant labor in Europe’s economies. Cross-border migration will remain a relevant factor for economic development across the EU in the post-pandemic environment.

Migrants among those hit hardest by recession

On average, 13% of workers in key sectors in the EU are immigrants from either another EU state or a third country. Notwithstanding their key role, migrants, along with elderly employees and women (namely, groups overly represented in precarious jobs), have been severely impacted by the economic recession following the Covid outbreaks.

Rising vaccination rates and the end of national lockdowns have put economies in EU member states back on track. In its latest forecast the EU Commission predicted that GDP in the bloc will grow by 4.8% in 2021 and that the volume of output will return to pre-crisis levels towards the end of the year. New Covid variants that are spreading faster — and among younger, non-vaccinated cohorts in particular — are causing uncertainty regarding whether the economy can remain open, especially in (migrant-reliant) sectors such as tourism and hospitality.

Early indicators regarding new restrictions include the late August removal of the USA, along with other countries including Israel and Lebanon, from a list of safe countries, potentially limiting mobility for travelers from these countries to essential travel only, especially if they are not fully vaccinated. Countries included on the EU’s safe list are required to have a maximum of 75 infections per 100,000 people over the previous 14 days. While EU member states can decide independently whether to implement EU recommendations on Covid-related mobility restrictions, most tend to follow the EU’s advice in that regard.

Skills shortages remain an economic impediment

What is certain is that international migration and mobility will continue to play an important role in the EU’s economy and its development, given the ongoing skills shortages across many member states. Apart from recruitment from abroad, there are several options to address skills gaps. These include training, better work and wage conditions to attract qualified applicants within the EU, and internal company re-organizations to increase productivity levels, as well as technological changes to advance automation. Many of these measures require large investments, political consensus that is often difficult to achieve, and time. The supply of workforce in Europe, moreover, is limited due to an aging demographic. International migration is hence likely to remain a key factor for economic recovery and development.

Immigration, however, is widely contested in Europe. Public opinion tends to be more favorable, though, towards migrants who are seen to be contributing to host countries, whether by working, paying taxes, or supplementing labor market skills shortages.

Despite the mantra of political elites in Europe of the necessity of attracting the best brains and talent, namely, the need to attract highly skilled migrants, labor market analyses reveal that the EU is most in need of a mid-level skilled workforce and, in addition, needs low- and high-skilled workers. Most occupations where there are shortages are in the construction, engineering, healthcare, hospitality, ICT, and mechanics sectors, with 55% requiring medium-level qualifications, 28% requiring low-level qualifications, and 25% requiring high-level qualifications.

Lack of legal pathways still a difficult challenge 

With the exception of migration programs aimed at attracting highly skilled workers, permanent legal migration avenues are few. This absence of legitimate pathways substantially contributes to irregular migration, the vulnerability of migrants, and a loss of tax revenues for member states estimated to be in the realm of EUR 445 million to EUR 891 million.

Low-skill sectors, especially, are often limited by legal frameworks that allow only temporary employment by non-EU citizens. According to new data from the Center for Global Development,  Germany is one of the few champions in the EU in terms of adequate labor migration policies.

The EU has only a limited say on labor migration, as this policy area remains largely under the control of individual member states. This is mirrored in the European Commission’s  New Pact on Asylum and Migration. The Pact proposes two sets of measures relating to labor migration — the EU Talent Pool, a skill-matching mechanism, and Talent Partnerships, a cooperation scheme with third countries to enhance skilled migration. Whether these talent partnerships will take off will ultimately depend on the willingness of EU member states as well as that of third countries and the private sector.

Integration of asylum seekers needs to be strengthened

Amid new political turmoil such as the fall of Kabul, Europe must look anew at challenges concerning the mobility of asylum seekers and refugees and integration into the workforce. Female refugees also need more attention as despite their often high aspirations to work, their integration into the labor market tends to be slower than their male counterparts.

Lengthy asylum procedures, language barriers, temporary residence permits, and restrictions on the right to work for asylum seekers, in addition to the recognition of qualifications as well as caring responsibilities are significant impediments for refugees’ labor market integration.

The reform of the EU’s skilled migration scheme is progressing

The reform of the Blue Card Directive, the EU’s skilled labor migration program, which is finally progressing these days after years of stalemate, is positive news in that regard. In addition to the flexibilization of admission criteria, and the lowering of minimum salary thresholds, the reformed Blue Card policy will also allow for more EU-intra mobility for beneficiaries of international protection.