The Precarious Incentives Created by Subsidized Migration

by Domenico Ummarino

Migration is a dominating feature of social and economic life across many countries. It has become a very sensitive topic and, in particular, one of the main areas of contention among different political parties in all those countries that have experienced relevant immigration flows.

As far as Europe and immigration from non-European countries are concerned, what I hereby would like to highlight is the fact that immigration flows have been heavily influenced by European governments, their advertised pseudo-humanitarian disputable rhetoric and the profitable grids of social security laws and, in general, welfare state made possible by profligate public spending and opaque and hefty taxes.

No matter what type of immigration is involved, the wealth of Europe, the ease of accessing it and the fact that governments unequivocally promise to provide, inter alia, public assistance to immigrants, are a worthy incentive to reach the Promised Land, the land of plenty, where you have all kind of rights and few, if not any obligations at all, where you can even protest for receiving more state assistance because your wealth expectations in life have not been immediately met by European governments (see for example).

The deliberately induced or intensified immigration phenomenon can be easily comprehended by taking a brief look at the situation in Italy.

In 2017, the costs for the rescue and the reception of migrants could have risen up to 4.6 billion euros (0.27% of GDP) , i.e. up to one billion more than 2016, in a country with one of the highest tax burden in the world (it ranks in the first 7/8 positions ), a debt-to-GDP ratio standing at 131.6 percent, the highest in the euro zone after Greece’s, and hence a clear impossibility to be more generous with its deteriorated public finances.

How does it work in Italy? Immigrants are taken to welcome centers for identification and a decision on their destinies. In theory, only those who identify themselves and claim political asylum can remain in Italy until their application is refused or indefinitely accepted. According to the Dublin Accords, they can only claim political asylum in Italy, the country where they arrived in the EU. In practice, however, only a minority claim political asylum in Italy. Most of them remain there incognito, or else move on to other European countries.

In the welcome centers, they are given free board and lodging plus mobile phones, three euros a day in pocket money, and lessons in such things as ice-cream-making, driving a car and other different activities. In line of principle, their presence in these welcome centers is voluntary, and they are free to come and go, though not to work, and each of them costs those Italians who do pay tax 35 euros (45 euros if they are minors) a day. Besides, other costs for daily meals and phone recharges must be added to the list. Irregular immigrants are even entitled to hospital care for illnesses and accidents, in public or private facilities, for free.

I point out that the briefly described public effort to manage immigration in Italy is “oddly” creating inefficiencies and attracting the greedy attention of opaque business actors represented by public and private entities with different legal features involved in the “welcome business” and connected to organized crime.

By consulting Italian newspapers of various political and religious orientations, and, more important than that, by living the Italian daily life, it is evident that immigrants who reside regularly or irregularly in Italy can afford not to abide by many current laws, such as anti-begging laws, counterfeiting laws, tax laws, irregular business activities etc. One has easily the impression that there is a sort of impunity pact among Italian institutions that basically makes immigrant illegal attitudes untouchable for politically correct and ideological reasons. Even in southern cities, with high unemployment levels and low developments, the unparalleled flow of irregular/regular immigrants attracted by unsustainable promises of welfare states and unconditional state assistance is under way.

The picture of this situation and, in particular, the circumstance that a number of immigrants are spending their time begging for money or carrying out illicit activities should suggest us that the decision of immigrants to reach Italy has been totally wrong, having been based on misleading information and unsound political and ideological decisions.

What makes it worse is that the dominant social democratic ideology represses any attempt to denounce problems and inconsistencies caused by uncontrolled and state-assisted immigration as populist, fascist or libertarian (i.e. inhuman).

European governments talk about legal civilization and rule of laws, but they have lost the sense of justice and are bogged down in red tape and injustice. It is clear that the socialist idea of justice has become an arbitrary evaluation of political and governmental institutions and judiciary. To put it simple, the abused “social justice” that is being promoted to us during our whole life and in all fields of civil, economic, political, social and cultural life is the end of Justice.

In the case of immigration, political interference generates unpredictable social damages by lavishing immigrants with “unwarranted praise” and spoiling their entrepreneurial potential. European governments, driven by their impossible and naïve idea of the state and drunk with social democratic ideology, have the power to manipulate immigration decisions, mislead the entrepreneurship of every immigrant and, in this way, pave the way to unpredictable consequences.

In other words, what is happening in European countries is another plain school case of how government actions are going to lead to unintended consequences and to an impoverishment of societies, where people’s behaviors are continually confused by state planners who make decisions as if they had divine powers, whereas they actually have little information to take any decision whatsoever and languish in a state of great ignorance.

Once again, to take an optimistic view of the mess of immigration, the time needed to re-establish natural and genuinely driven migratory flows will be longer, due to the intrusion of European governments and their conditioning social ideological rhetoric.

Domenico Ummarino is a Qualified Business and Tax Advisor and Auditor based in Italy.


The views expressed on austriancenter.com are not necessarily those of the Austrian Economics Center.

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