Immigrants are good for the economy, report says

Despite the gloom and doom from some quarters, immigration actually adds to the state’s coffers

Sep 30, 2013

The extra money spent and taxes paid by immigrants outpace the public services they use and result in a net gain of over a billion kroner per year for the nation's economy, according to a report from Organisation for Economic Co-operation and Development (OECD) that seems to fly in the face of the naysayers who say ‘welfare tourism’ by immigrants flocking to the country to suck on the state teat is draining the society dry.

“There is a big discussion about welfare tourism in many EU countries, but it is clear that most immigrants add to a country’s bottom line,” Thomas Liebig, one of the authors of the OECD report, told Politiken newspaper.

The OECD report looks at the years between 2007 and 2009, and critics say that the positive numbers slipped during the financial crisis and that the organisation needs to change its matrix for measuring the effects of immigration to reflect current economic realities.

Liebig argued that even with the crisis, immigration has not pulled Denmark into the minus column, because immigrants from wealthier EU countries are often better educated than Danes and find high-paying jobs – and thus pay higher taxes than the average Danish worker.

The OECD report identified Denmark as one of 19 countries in which immigration had a positive overall fiscal impact. Just six countries – Germany, France, Poland, Ireland, Canada and the Slovak Republic – had a negative fiscal impact from immigration. When pensions were excluded from the formula, immigration was an even greater economic boon, with just three countries – the US, Ireland and Canada – experiencing a negative fiscal impact from immigration.

Right-wing unconvinced
The report did little to quiet the fears and rhetoric coming from right-wing politicians regarding 'welfare tourists' destroying the Danish system.

Mads Rørvig, the SU spokesperson for Venstre (V), called the potential drag of thousands of students from other EU countries coming to Denmark for an education and getting student help “a bomb under the entire SU system”.

But his party cohort, Anne E Jensen (V), a member of the European Parliament disagreed.

“[Rørvig] may know something about SU, but he doesn’t know much about EU systems," Jensen told Politiken.

Jensen said that neither SU nor other welfare systems were cash machines where immigrants could simply pull out what they needed without meeting any requirements.

Rørvig, in turn, accused Jensen of being out of touch with reality and said that SU money that went to immigrants and foreigners was money that was lost to Danes.

“Scare tactics”
Kasper Ernest, a Brussels-based representative of the industry group Dansk Industri, accused Venstre and their conservative compatriots Dansk Folkeparti (DF) of using scare tactics to create a backlash against immigrants.

“The amount of east European immigrants receiving unemployment help in Denmark is not at all out of proportion,” Ernest told Politiken.

DF's EU spokesperson Pia Adelsteen countered that her party was not trying to scare anyone but merely stating the reality.

“We are not saying that the welfare system will collapse tomorrow, but little by little every system is being eroded," she told Politiken. "SU, unemployment, child allowances … what’s next?”

The OECD report can be viewed here.