February 19, 2017
Spencer P Morrison
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Germany’s population is declining, and this will cause economic problems—but increased immigration and accepting refugees (migrants) won’t fix it.
This article looks at the logic behind Chancellor Merkel’s “immigration grows the economy” argument, and nails down the facts.
I find that there are 7.89 million Muslims in Germany, all immigrants (1st, 2nd, or rarely 3rd) or refugees—14.7% of Germany’s population ages 32 and under is Muslim.
This exacerbates the problems faced by Germany and its aging population, since the majority of these people do not contribute to Germany’s lavish welfare system. This has led to a number of economic problems.
Immigration Does Not Always Cause Economic Growth
The first distinction we need to make is between economic growth and prosperity.
While’s true that increasing the number of people in an economy will almost always cause economic growth in absolute terms (more people means more workers), this doesn’t mean it will make the economy more prosperous (average wealth won’t necessarily increase).
Think of it like this: say someone immigrates to Germany from Poland. They add $20,000 per year in value to the economy—the economy grew.
However, pretend the average value of a laborer in Germany is $40,000. In this case, the Polish immigrant did not increase Germany’s prosperity (he brought the average down).
This is especially true if we imagine that Germany’s welfare system ensures that everyone’s standard of living equates to an income of $30,000 a year. In this case, other people will be taxed to ensure the Polish immigrant has a better quality of life.
Now pretend the numbers were reversed: the Polish immigrant provides $40,000 in value, while the average German only adds $20,000—the Polish immigrant now both grew the economy and increased Germany’s prosperity.
In fact, he’s probably mad that he’s stuck subsidizing his compatriots standard of living.
This is why the type of immigrant matters: yes all immigrants will grow the economy (almost by definition), but that doesn’t mean they make the host country more prosperous—which is the true measure of economic success.
They conflate absolute economic growth with prosperity. This is a ham-fisted way of seeing things.
With this in mind, let’s look at Germany’s recent crop of immigrants and see if they’re making Germany more prosperous.
Immigrants Are Changing Germany’s Demographic Structure, But Not It’s Economic Vitality
As I’ve said, Germany’s perceived economic problem is that its population is shrinking.
This endangers the welfare system, which operates like a giant Ponzi scheme: young, healthy, people pay into the system, while the old withdraw from it (pensions, healthcare costs etc.). Germany’s problem is that there aren’t enough young people (because Germans didn’t have enough children) to support the system.
To support the system, Germany has opted to bring in immigrants from the very young, and fertile, Islamic world to replace the children they didn’t have, thereby supporting the system.
For Germany, immigration (and accepting refugees and migrants) is explicitly characterized as managed population replacement.
With that out of the way, let’s look closer at Germany’s demographics.
There are roughly 81 million Germans. The median age is 46.1—among the oldest in the world.
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So that’s Germany as a whole. Let’s look more specifically at immigrant groups.
Most immigration to Germany is from other EU countries. These immigrants have comparable levels of education and technical skills—more importantly, they have the soft skills to make it in Germany’s advanced labor market (things like language and cultural sensitivities that economists often ignore).
EU (and other Western) immigrants tend to grow Germany’s economy, but don’t strongly impact prosperity (since lower-skilled Romanian immigrants are balanced out by higher skilled British or American immigrants etc.). It’s a wash.
The other major immigrant group are those from the Muslim world: these are mostly 1st or 2nd generation immigrants, and the large group of refugees and economic migrants that began arriving in 2014.
What is their economic impact?
Germany Is Home To Double The Number Of Muslims As Government Claims
Before we can calculate the economic impact of non-Western immigration to Germany, we have to figure out how many live in Germany.
I confess that when I started writing this article, I thought the number would be easy to find.
In fact, I believe that government agencies are actively suppressing the number of non-Western, particularly Muslim immigrants and refugees into Germany, in order to maintain order—similar to what’s currently happening in Sweden.
For the sake of this article, I confine my calculations to the number of Muslim-Germans (because this is by far the largest group of non-Westerners immigrating to Germany, and the data is the most readily available).
I believe this number serves as a reasonable proxy for all non-Western immigration into Germany (subject to a modifier of course).
So let’s look at the facts.
How Many Muslims Are In Germany?
According to The Guardian, there were 4.1 million Muslims in Germany in 2011 (as per their statistical projections).
Pew Research, on the other hand, pegged it higher, at 4.8 million in 2010.
Now, I specifically chose to find sources that pre-dated the refugee crisis, having a hunch that the numbers may be skewed for political purposes.
Jumping ahead to 2016: according to the CIA World Factbook, there are 2,986,743 in Germany at the end of 2016. I presume this number doesn’t include refugees, although it’s still disturbingly low.
More troubling is the fact that when I looked at their archived page, I found that their website said in 2010 that there were 3,044,370 Muslims in Germany—the percentage of population (3.7% did not change), although the population estimates did.
So according to this US government source, we are led to believe that there are fewer Muslims in Germany now than 6 years ago—despite the fact that roughly 200,000 immigrate to Germany (legally) per year.
My only guess is that the CIA bases their estimates on the German census and didn’t bother to update the percentage. But Germany had a census in 2011, so why wouldn’t it be updated to reflect that fact?
Even more troubling is that Germany’s Federal Office for Migration and Refugees stated that at the end of 2015 there were between 4.4 million and 4.7 Muslims in Germany—roughly the same number as in 2010 (again, before the migration crisis).
So that’s what the sources say, but what’s the real number?
Let’s split the difference between Pew and the Guardian and assume there are 4.3 million Muslims in Germany in 2010.
Finally, let’s add in the refugees.
In 2014 The Telegraph said 173,000 Syrian refugees arrived in Germany.
Finally, 280,000 migrants arrived in 2016 according to the New York Times.
All totaled, the Muslim population in Germany is7.89 million people, as of January, 2017.
That’s almost twice what Germany’s government believes.
Just as a side-note: if Germany wanted to help refugees so badly, why did they only accept 150 Ukrainian refugees during the same period, when there were 2.6 million Ukrainian refugees?
The Economic Impact Of Non-Western Immigration On Germany
This article isn’t interested in positing a hard number, what I’m interested in is the impact of this revised demography on the German welfare state in the future.
Let’s break it down.
Given that the median age of Islamic immigrants in Germany is 32, this means that there are 3.95 million aged 32 or younger.
There are only 22.86 million Germans (of both native, and Western-immigrant background) in Germany in that age group. This means that 14.7% of Germany’s young population are newcomers from a different cultural heritage.
Given that 81% of these recent immigrants are unskilled by German standards, and that 80% of Germany’s Islamic population receives welfare payments from the government, I believe the question of whether or not this type of immigration will fix Germany’s demographic problem is an open and shut case.
Germany is making their economic and demographic problems many times worse, by bringing in immigrants who drain from the system, rather than pay into it—which was the whole point, was it not?
America has the same issue with illegal immigrants, to a lesser degree.
About Spencer P Morrison