By the middle of 2018, only a quarter of those who arrived during the migrant crisis had found a job and only a fifth were paying into the social welfare system, according to the Institute for Employment Research. Most of those who were employed had low-paying jobs, and many of them were receiving supplementary welfare benefits to make ends meet.

"We are creating the framework for more controlled immigration of qualified specialists." — Interior Minister Horst Seehofer.

The new immigration law is a tacit admission that Chancellor Angela Merkel's open-door migration policy, which has allowed into Germany more than a million mostly unskilled migrants from Africa, Asia and the Middle East, has failed to resolve the country's most pressing demographic challenges and labor shortages.

Germany's Minister of Labor Hubertus Heil (left), Economic Affairs Minister Peter Altmaier (middle) and Interior Minister Horst Seehofer (right) present the government's immigration policy framework for skilled workers, at a press conference on October 2, 2018 in Berlin, Germany. (Photo by Sean Gallup/Getty Images)

After months of wrangling, Germany's coalition government has reached an agreement on the key points of a new immigration law — one that is aimed at filling labor shortages and stabilizing the public pension system by encouraging the immigration of skilled workers from outside the European Union.

The new law, which will tighten restrictions on the immigration of unskilled workers, is a tacit admission that Chancellor Angela Merkel's open-door migration policy, which has allowed into Germany more than a million mostly unskilled migrants from Africa, Asia and the Middle East, has failed to resolve the country's most pressing demographic challenges and labor shortages.

Interior Minister Horst Seehofer (CSU), Labor Minister Hubertus Heil (SPD) and Economic Affairs Minister Peter Altmaier (CDU) presented the compromise agreement during a joint press conference in Berlin on October 2.

The so-called Fachkräftezuwanderungsgesetz (Law on Immigration of Skilled Workers) would waive existing requirements for companies to give preference to German or EU citizens when filling job vacancies. Specifically, it would allow companies to recruit non-EU (Drittstaaten) citizens in all economic sectors, provided that those recruits are qualified for the job and have satisfactory German language skills.

Even lower requirements would apply for information technology professionals, who would be allowed to come to Germany without formal academic qualifications, provided they have solid work experience and a job offer.

The new law would also provide skilled workers without concrete job offers a six-month residence permit to find a job, provided they have German language skills and the financial means to support themselves during this period.

On the other hand, the proposed law states that non-EU citizens without higher education will not be allowed to migrate to Germany: "We do not want any immigration from unqualified third-country nationals," the deal states.

"We will ensure through clear criteria that the rules cannot be abused. We will align our efforts with the needs of our economy, taking due account of qualifications, age, language skills, evidence of a real job offer and the ability to guarantee livelihoods."

The agreement does not specifically mention the so-called Spurwechsel ("lane change") proposal, a plan championed by the SPD that would allow migrants living in Germany to exchange their asylum seeker status for permanent residency status if they find a job and learn German. "We maintain the principle of separation of asylum and labor migration," the document states. "We will prevent immigration into the social welfare system."

Seehofer and others said they feared that the "lane change" proposal would reinforce the immigration pull factor, thereby further encouraging unskilled economic migrants to travel to Germany in the hopes of being allowed to stay. "We had a silent consensus that there should be no lane change," said Seehofer.

In a compromise, however, the deal commits the government to "define clear residence criteria" for so-called Geduldete ("tolerated") migrants: well-integrated refugees whose asylum applications have been rejected but who cannot be deported because they lack identification papers, their home countries refuse to take them back, or there is legitimate fear for their safety once home. Currently, there is no unified policy on Geduldete migrants; some of Germany's 16 federal states are showing leniency while others are taking a hard line.

Seehofer said he was "extremely satisfied" with the results and described the agreement as a "pragmatic, practical response to the reality of life." He added: "We are creating the framework for more controlled immigration of qualified specialists."

Labor Minister Heil said the agreement represented the first step for a "modern immigration law in Germany."

Economic Affairs Minister Altmaier said that the deal would "ensure that all jobs for skilled workers can also be filled."

By contrast, the leader of the anti-immigration party Alternative for Germany (AfD), Alexander Gauland, said that the compromise on the so-called lane change proposal would encourage more illegal immigration:

"With the new immigration law, the SPD has once again prevailed against Seehofer. Asylum and immigration are now being mixed beyond recognition and the opportunities to escape deportation are massively expanded. "This is now officially what the AfD has always warned: As soon as illegal immigrants have crossed our borders, they may stay with us forever."

Business leaders praised the deal. The chief executive of the Confederation of Employers' Associations, Steffen Kampeter, said that the German economy "relies on qualified specialists from abroad" in order to maintain competitiveness: "We need the brightest brains from all over the world."

The president of the Federal Association for Information Technology (Bitkom), Achim Berg, said there currently are about 55,000 job vacancies in the IT sector, costing German companies about 10 billion euros in lost sales each year:

"Bitkom has been campaigning for years for the immigration of skilled workers. We very much welcome the fact that this is now fundamentally addressed by the federal government with the Law on Immigration of Skilled Workers. We need the brightest minds from around the world to shape digitization in Germany, to support our economy and to strengthen the labor market."

Germany will need to take in 300,000 migrants annually for the next 40 years to stop population decline, according to a leaked government report. The document, parts of which were published by the Rheinische Post, revealed that the German government is counting on permanent mass migration to keep the current size of the German population (82.8 million) stable through 2060.

The report implied that Chancellor Merkel's decision to allow into the country some 1.5 million mostly Muslim migrants between 2015 and 2016 was not primarily a humanitarian gesture, but a calculated effort to stave off Germany's demographic decline and to preserve the future viability of the German welfare state, in which the young are obligated support the elderly.

The report stressed the need quickly to integrate migrants into the workforce so that they can begin paying into the social welfare system. "According to past experience, this will not be easy and will take longer than initially often hoped," the report conceded. "Successes will only be visible in the medium to long term."

By the middle of 2018, only a quarter of those who arrived during the migrant crisis had found a job and only a fifth were paying into the social welfare system, according to the Institute for Employment Research (IAB). Most of those who were employed had low-paying jobs in the hospitality or services sectors, including in cleaning, package delivery or security, and many of them were receiving supplementary welfare benefits to make ends meet.

In August 2018, Deutschlandfunk public radio reported that "disillusionment has arrived" as many refugees are still receiving social welfare benefits or working in the low-wage sector:

"'First refugees, then 'German craftsman,' 'Young, alone and motivated,' 'People come to work hard,' 'Refugees are lucky.' This is what the headlines sounded like in the summer of 2015, when images of the German welcome culture were seen around the world. The welcoming teddy bears at Munich's central station promoted the view that hundreds of thousands of young men from Syria, Afghanistan, Eritrea and Iran could solve several problems in one go — rejuvenate aging German society and alleviate the skills shortage. "Three years later, the headlines sound sobering: 'Job miracle among migrants is missing,' 'Where are the specialists?' 'Most of the refugees live on Hartz IV [unemployment benefits],' 'The high burden of refugee policy.' "Was Germany naïve in summer 2015? Did policymakers and experts see the situation from too rosy a perspective and forget that integration into the labor market is a long, sometimes rocky path? .... "Only one out of every 100 refugees is working in a highly skilled job in Berlin. Nationwide, 8 out of 10 asylum seekers have neither a university degree nor a vocational qualification...."

In another segment entitled, "No New German Economic Miracle in Sight," Deutschlandfunk reported:

"The German economy needs skilled workers: When almost one million refugees came to Germany in 2015, hopes of the big corporations were aroused. But what role do the 30 DAX [blue chip stock market index consisting of the 30 major German companies trading on the Frankfurt Stock Exchange] companies play in integrating into the labor market? "Deutschlandfunk conducted a survey — the result is sobering: only 800 refugees have been recruited by DAX companies. Most of them work at Deutsche Post — especially in parcel sorting centers or as couriers — and also at the carmakers BMW and Daimler. But: The majority of stock market heavyweights has not hired any migrants...."

Company executives said the main problem is that migrants lack professional qualifications and German language skills.

According to the Federal Labor Office, the educational level of newly arrived migrants in Germany is far lower than initially expected: only a quarter have a high school diploma, while three quarters have no vocational training at all. Only 4% of new arrivals to Germany are highly qualified.

For now, the vast majority of migrants who entered Germany in 2015 and 2016 are wards of the German state. German taxpayers paid around €21.7 billion ($25 billion) on aid for refugees and asylum seekers in 2016, €20.8 billion in 2017, and will pay a similar amount in 2018, according to government figures published by Focus magazine.

A Finance Ministry document revealed that the migrant crisis could end up costing German taxpayers an additional €94 billion ($107 billion) by 2020. About €25.7 billion would be for social spending, such as unemployment benefits and housing support. About €5.7 billion would be destined for language courses and €4.6 billion for integrating refugees into the workforce.

Over the long-term, the 2015 migrant crisis could end up costing German taxpayers more than one trillion euros -- the equivalent of around one-third of Germany's current GDP -- according to calculations presented by economist Bernd Raffelhüschen on behalf of the Market Economy Foundation (Stiftung Marktwirtschaft). He concluded:

"We need people, that is clear. But we need people we need. Which means: Germany needs an immigration limitation law. Only those who fit into the German qualification requirements may come. Other countries do that too. One must have the courage to discriminate, that is to select."

Germany currently has more than 1.2 million job vacancies, according to the Institute for Employment Research (IAB). Of these, 440,000 are for skilled jobs, which, if filled, would increase German economic output by a full percentage point, according to the German Economic Institute in Cologne.