Immigration 101, for the attention of the French

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France’s political imbroglio over its immigration bill on Monday has resulted in an ambitious mechanism to grant one-year automatic visas to irregular workers being dropped. And it’s a shame: regularising working migrants is a good thing.

The – baseless – theory that Europeans are being ‘replaced’ by immigrants from Sub-Saharan Africa has infused French political conversations for years now.

The rhetoric crystallised during the 2022 presidential and legislative elections, when several parties, spanning from the conservatives to Éric Zemmour’s identity-obsessed far-right, called for an urgent curb to both ‘legal’ and ‘illegal’ immigration numbers. They argued it was high time to fight off an alleged demographic overturn, once coined “the challenge of the century” by Zemmour.

After over a year’s worth of drafting, the government introduced an immigration bill this summer that ramped up the penal response to ‘illegal’ immigration – appealing to conservative MPs, whose votes are crucial for the legislation to pass.

Given the public discourse, it also came as quite a surprise that the very same bill created a one-year visa for all irregular migrants who can prove they have been working in sectors experiencing acute labour shortages.

That’s right, irregular migrants already work in France – undeclared, under the radar, and too often in precarious conditions. Their labour contributes to many sectors, from construction to hospitality and care work.

Unsurprisingly, the government’s efforts to tackle this reality gave many immigration sceptics a heart attack and triggered strong pushback against the proposal. Back in November, the right-leaning Senate voted on a reviewed version of the bill which considerably limited the scope of the one-year visa clause and heavily hardened irregular migrants’ access to basic health services in the country.

In the end, with the support of left-wing parties for whom the penal chapter was just too tough, the bill was discarded on Monday (11 December) before it could even be scrutinised by MPs.

Whatever one may think of the politics, dropping the bill’s migrant regularisation article is a shame. Thinking in economic terms, such a provision is economically sound.

There is no official data on how many irregular workers operate in France, but a legal mechanism put in place in 2012, which grants work visas to irregular workers under specific circumstances, estimates a yearly 30,000 people are being regularised.

And that’s a gross underestimate – workers are unlikely to step forward, risking deportation, and companies that employ them are in a legal blur they have little incentive to clarify.

That notwithstanding, “the positive effects of regularising working migrants on economic activity can be significant”, Pierre Cahuc, a Sciences Po scholar, wrote in a Les Echos oped back in September. “It’s a crucial element to take into account in a context of low growth and population ageing. On the fiscal side, regularisation could translate a net positive, as declared work brings in more revenues for the State.”

In fact, there seems to be an economic consensus that workers’ regularisation is a good thing, no matter what border fanatics may say.

Studies have found that, on average, it has positive fiscal and macroeconomic consequences in all OECD countries.

It also brings in competition between employers to hire the best talents, upping wages as a result, Cahuc wrote – running against the view that immigration drags pay down.

“[Irregular workers] take jobs that are complementary to those natives take on,” immigration expert Ekrame Boubtane outlined in 2021.

It is not true to say that immigrants ‘steal’ natives’ jobs: “Upon arrival, even with comparable education levels, an immigrant lacks the specific local labour market knowledge that would help them integrate it quickly,” she wrote.

A research piece interrogating the consequences of regularising undocumented immigrants found regularisation in the EU also led to wage increases, as wage exploitation is harder to hide. “The magnitude [of wage increases among member states] ranged from 2−10% for men and from 0−21% for continuously employed women.”

And, perhaps most importantly given the current EU state of play, irregular migration actually fulfils unmet demand in low-wage sectors that are burdened by labour shortages.

Around 75% of companies are struggling to both hire and retain talent, according to EU statistics body Eurostat. Countries are warning vital industries’ viability is at risk.

Reskilling native workers, and forcing the unemployed into the labour force just isn’t enough, labour economist Sir Christopher Pissarides told Euractiv in an interview earlier this month, who claims policy-makers have a duty to look into accommodating immigrants.

“The talk about immigration is completely disjointed,” he said, especially as immigrants are needed in critical sectors including construction or health care, the latter of which is forever more burdened by an ageing population.

Days after Monday’s political fiasco, the government is working its parliamentary magic to keep the legislation alive – with a high chance the text’s provisions get toughened up to sway conservatives.

There are even talks the economic chapter of the bill could be dropped entirely, to favour a repressive-only text.

This is worrisome, and quite a way to sleepwalk into two unavoidable realities: migration waves are here to stay, and so are labour shortages.

We’re kicking the can down the road, and any hope of having a sound debate on economic immigration is waning by the day.

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Chart of the Week

The ageing population is no myth – and the past 10 years show the fastest growing age group by far is that of the population 60 years old and older. Compare that to the younger age groups, all of which are declining.

This demographic reality is one of the key reasons behind the need for a strong economic migration policy, which sees migrants as an asset, both to offset growing demographic imbalances and reduce severe labour shortages.

Regularising migrant workers is not the full answer to the problem, but evidence shows it is one step of the way.

You can find all previous editions of the Economy Brief Chart of the week here.

Economic Policy Roundup

France ramps up debt rules fight as file enters last leg of negotiations. French political heavyweights are raising their voices to warn against the risks of an unbalanced and counterproductive debt rules reform, as negotiations look to wrap up before year-end and austere German criteria appear to be here to stay. A counterproposal, spearheaded by French Economy Minister Bruno Le Maire could make tweaks to the Excessive Deficit Procedure, so countries can reduce their deficits more slowly all the way up to 2027. Read more.

EU Parliament and Council reach political agreement on due diligence law. On Thursday (14 December) early in the morning, negotiators from the European institutions found a political agreement on the Corporate Sustainability Due Diligence Directive (CSDDD) that aims to hold companies accountable for violations of human rights and environmental standards in their value chains. The negotiators also found compromises on the most contentious issues about the inclusion of finance and whether companies would have to implement their Paris-aligned climate plans. See what’s in the deal here.

Germany solves budget spat by cutting climate fund and increasing energy taxes. The German government on Wednesday (13 December) resolved its internal disagreements on how to deal with a €60 billion hole left in the government’s finances after a ruling by the country’s constitutional court, announcing a mix of expenditure cuts and additional sources of income. The mix of measures includes total cuts of €45 billion in the “Climate and Transformation Fund” as well as some higher taxes and levies, such as on electricity, heating and road fuels. The government faced criticism from affected industries as well as economists.

EU lawmakers nail down rules for platform workers. The representatives of the main EU institutions reached a provisional agreement over the Platform Workers Directive in the early hours of Wednesday (13 December) after almost two years of strenuous negotiations. At the heart of the file is a new legal presumption of employment, a mechanism through which self-employed platform workers could be reclassified as full-time employees based on their working relationship with digital platforms. New ambitious provisions on algorithmic management in the workplace were also adopted. Read more.

EU Parliament and Council agree to set up Anti-Money Laundering Authority (AMLA): On Wednesday (13 December), the EU Parliament and the EU Council finalised trilogue negotiations on the AMLA that should supervise the EU’s new AML rulebook. The AMLA will directly supervise financial entities with operations in six or more member states and it will be able to step in if national AML supervisors are failing. However, co-legislators have not yet agreed on the seat of the AMLA, to which several European cities have applied. This decision should be taken in 2024.

Macron pushes for admin simplication bill in the fall. French President Emmanuel Macron vowed on Monday (11 December) to put together a new bill to “drastically” reduce and simplify administrative burdens on businesses. “We must go much further in supporting entrepreneurs, and crush the accumulation of administrative procedures,” he said. This comes atop European Commission President Ursula Von der Leyen’s commitment in her State of the Union speech in September to reduce reporting requirements by 25%.