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Free movement of workers


EU migrants seen as social system freeloaders


By Stefania Summermatter



 (Keystone)
(Keystone)

The free movement of people has not only brought plenty of foreign workers to Switzerland but also a growing number of unemployed, according to the rightwing Swiss People’s Party, which points the finger at “welfare tourism”.

“Free movement of workers was devised to allow European citizens to come and work in Switzerland. Today, however, there is an increasing number of people who, driven by the crisis, arrive in our country without a contract or remain after losing their jobs. This is at the expense of the social welfare system,” says People’s Party parliamentarian Guy Parmelin.

The prospect of welfare tourism, which has also triggered political debate in Britain and Germany, is one of the planks in the People’s Party campaign for its initiative “against mass immigration”, which is to go to a nationwide vote on February 9.

Since the bilateral accords with the European Union in 2002, Switzerland has opened its doors to 700,000 more foreign workers, of whom 60% come from Europe. And not just the foreign workforce has been growing, but also the number of European citizens getting unemployment and social welfare benefits here.

Unemployment statistics

In 2013, Switzerland had an average unemployment rate of 3.2%, compared with 2.9% the year before. The breakdown in terms of nationality was:

Swiss: 2.2% (+0.1)

Non-Swiss: 6.0% (+0.5)

Among citizens of the 27 member countries of the European Union. the average unemployment rate was 5.2%, up 0.7 percentage points. The breakdown in terms of nationality was:

Portuguese: 7.5% (+0.9)

French: 6.1% (+0.6)

Spanish: 5.8% (+1.2)

Italian: 4.7% (+0.4)

German: 3.6% (+0.4)

(Source: SECO)

Does this increase mean abuse of the system? For those working in the field, abuse is not the right word.

“We have not noted any real welfare tourism,” says Marcel Suter, president of the association of cantonal departments of migration. “Most of the immigrants from the European Union already have an employment contract when they arrive in Switzerland.”

The same view is held by Michel Cornut, director of social services in Lausanne, one of the Swiss cities most affected by migration and poverty.

“Obvious cases of abuse, like people who arrange to bring their whole family and then go on welfare, exist but are marginal. It is, however, clear that the presence of foreign workers here means that some may find themselves getting into difficulties, often because they hold less secure jobs. Then they ask for help.”

Entitlement to benefits

To get social benefits, you don’t need to resort to trickery of any kind. The bilateral accords provide for it.

For example, an Italian who arrives in Switzerland with an open-ended employment contract has the right to a five-year, renewable residence permit. If he loses his job, he can get unemployment insurance – as long as he can show he has worked at least 12 months in the past two years – and in case of need he can get social welfare.

For Parmelin, those who are no longer contributing should have to go back to their own countries soon instead of “burdening the social welfare system”.

“Often, they have no desire to do so,” he said.

Social welfare statistics

In 2012 in Switzerland 250,333 people were in receipt of social welfare benefits, 3.1% of the population.

Foreign nationals have been the most vulnerable to job loss because they often have a lower level of education and training, a larger family and less secure employment.

In 2012, according to the Federal Statistics Office, the rate of social welfare claims among the foreign population here was 6.3%, compared with 2.6% among Swiss.

Among European Union citizens, the rate was 3.1%, comparable to the national average.

(Source: Swiss statistics on social welfare 2012 – Federal Statistics Office)

In 2012, there were about 35,000 citizens of the 27 EU countries on welfare, or 3.1% of the total. Welfare dependence is not a sufficient reason to revoke a residence permit, explains Suter, even if it may make renewing it difficult. 

The situation is different for someone who comes across the border in search of work. In that case, the permit is only for six months and the law does not allow access to social welfare, as is in fact the norm in the European Union.

Some local governments do, however, have a kind of aid for very needy people. This approach is being challenged in various quarters, and just a few weeks before the vote, the federal government has announced that it will put a stop to this by introducing a new piece of legislation.

Spectre of bogus contracts

There is another loophole, however, that the People’s Party is alarmed about: cases of entitlement to unemployment insurance being “carried over” from other countries.

Theoretically, as the State Secretariat for Economic Affairs (SECO) explains, a French or German citizen could work one day in Switzerland and then claim unemployment – as long as he had contributed for at least one year in a European country.

“These cases become Switzerland’s problem and they are just a liability on the social insurance system,” complains Parmelin, who voices suspicions about bogus employment contracts being used.

But according to SECO figures, in 2013 this loophole was exploited by only 1,800 people, or 2.5% of the 73,318 newcomers. The number of cases is increasing, but remains fairly slight.

The government has stepped up controls and collaboration between departments to try to uncover any bogus contracts and abuses of the system.

Impact on social insurance

SECO downplays the issue of foreigners claiming Swiss benefits: the rate of unemployment remains normal and the overall impact of migration on social insurance is a positive one.

“European immigration has offset the ageing of the population and thus taken pressure off contributory social insurance programmes,” says spokeswoman Isabel Herkommer. Without inward migration, old age security – the main component of the Swiss pension system – would have been in the red since 1992.

Are migrants funding Swiss pensions?

According to a report from the Federal Social Insurance Office, between 2001 and 2010 the proportion contributed to old age security, the cornerstone of the Swiss pension system, by European Union citizens rose from 18.5% to 22%. The proportion contributed by the Swiss themselves fell from 75.2% to 72.8%.

In 2012, European citizens received only 15% of old age security benefits paid. At present, however, the federal government finds it “impossible to make a precise and accurate forecast” of the effects of immigration on future costs of pensions.

(Source: Federal Social Insurance Office)

As regards unemployment insurance, SECO finds there is a reasonable balance between contributions paid and benefits received by European citizens here.

Parmelin remains sceptical. In his view, these figures do not reflect reality and do not allow for the scenario of a possible recession in the Swiss economy.

“We are dealing with a time-bomb. Thirty or 40 years down the road, European migrants who now contribute to financing our pensions will be entitled to one themselves. Who’s going to pay for this? Migration is really just postponing the action needed to deal with the ageing of the population.”

At this point, Switzerland seems to be the country that has benefited most from free movement of workers, according to an OECD (Organisation for Economic Co-operation and Development) study reported by the newspaper NZZ am Sonntag.

If costs of administration, infrastructure and social welfare occasioned by immigrants are subtracted from what they pay in the form of taxes and other deductions, Switzerland’s net benefit comes to CHF6.5 billion ($7.25 billion). The battle of the numbers goes on.

By Stefania Summermatter, swissinfo.ch
(Translated from Italian by Terence McNamee)



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