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Open Borders in Europe means More Neoliberalism

Summary:
An International Monetary Fund study is gushing over the benefits of 1.1 million new migrants in Germany.Why, you ask?Once you put aside the minor point about a temporary boost to GDP, we get to the real issue: according to the pro-business IMF, Germany can get migrants into jobs in the coming years by ramping up “labor-market flexibility” – which is nothing but neoliberal code for smashing up what’s left of German labour market regulations and trade unions, since unhinged neoliberal ideologues always think that if only wages were made more flexible, then the economy would adjust to full employment. This is delusional fantasy.Unfortunately, the sober reality is also sinking in that, as described here, most of the migrants are unskilled or semi-skilled workers, who will do little except compete for scarce jobs with domestic German low-skilled workers, and in the process drive wages down. Economists even talk about lowering Germany’s minimum wage to effect the needed labour market flexibility, and the IMF suggests the same thing and for other European states to boot!It will take years for the state to teach the new arrivals German and make them into highly-skilled workers for German industry or services, and one can barely believe that the Germans will suddenly become Keynesian big-spenders to stimulate the domestic economy.

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An International Monetary Fund study is gushing over the benefits of 1.1 million new migrants in Germany.

Why, you ask?

Once you put aside the minor point about a temporary boost to GDP, we get to the real issue: according to the pro-business IMF, Germany can get migrants into jobs in the coming years by ramping up “labor-market flexibility” – which is nothing but neoliberal code for smashing up what’s left of German labour market regulations and trade unions, since unhinged neoliberal ideologues always think that if only wages were made more flexible, then the economy would adjust to full employment. This is delusional fantasy.

Unfortunately, the sober reality is also sinking in that, as described here, most of the migrants are unskilled or semi-skilled workers, who will do little except compete for scarce jobs with domestic German low-skilled workers, and in the process drive wages down. Economists even talk about lowering Germany’s minimum wage to effect the needed labour market flexibility, and the IMF suggests the same thing and for other European states to boot!

It will take years for the state to teach the new arrivals German and make them into highly-skilled workers for German industry or services, and one can barely believe that the Germans will suddenly become Keynesian big-spenders to stimulate the domestic economy.

In the absence of government stimulus and with a weak private sector (and a possible global economic downtown this year), more mass immigration means more unemployment, and more demand on Germany’s welfare state, which in turn could easily provoke neoliberal demands to slash welfare to “incentivise” unemployed people into work.

The effect of all this should be perfectly clear: open borders means an intensified neoliberal assault on the population. It surprises me that more left-wing people don’t see it.

One can barely believe it, but according to this report here, an average of 3,000 people a day are still pouring into Germany from Austria.

Lord Keynes
Realist Left social democrat, left wing, blogger, Post Keynesian in economics, but against the regressive left, against Postmodernism, against Marxism

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