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Asylum costs almost two billion Swiss francs. But does it pay dividends?

29.01.2016 – Stéphane Herzog

The Swiss Confederation’s spending on asylum in 2015 passed 1.27 billion Swiss francs, with the cantons paying 600 million. Over the long term, however, refugees also contribute to the nation’s demographic and economic capital.

How much does asylum cost? Six billion Swiss francs, as the SVP claimed in an advert? Less if you refer to the State Secretariat for Migration’s (SEM) budget, which posted expenditure exceeding 1.27 billion Swiss francs for 2015, of which 735 million goes to the cantons. They receive around 1,500 Swiss francs from Berne per asylum applicant. The remainder of the budget is used primarily to pay the 1,000 officials of the SEM, an entity that also deals with matters concerning foreign nationals.

The cost of the measures taken by the cantons and communes is estimated at over 600 million Swiss francs a year . In Geneva, which receives 5.7  % of asylum applications, spending in 2015 stood at 32.6 million francs; added to this is the 42.8 million in Confederation expenditure for social support, healthcare, housing and integration costs. Total expenses amount to 85.2 million Swiss francs, from which we can deduct the 9.8 million paid by the immigrants as a contribution to their housing costs. The Hospice général provides financial support and/or social assistance for 6,500 people. The charitable institution, which employs 240 staff in the immigrant support department alone, puts the financial cost per asylum applicant – including the salaries of staff and infrastructure – at 7,000 Swiss francs.

Canton Vaud has annual spending of 120 million Swiss francs

The Geneva authorities welcomed 940 more immigrants in October than in December 2014, representing an 18  % increase. “Families are already being accommodated in hotels to deal with the lack of places in the existing facilities,” points out spokesperson Bernard Manguin. In 2006, the Swiss Confederation reduced the theoretical number of applications to 10,000. In canton Vaud, the asylum budget stands at 120 million Swiss francs. This figure does not include support for recognised refugees, explains Frédéric Rouyard, spokesperson for the cantonal population service.

The Confederation anticipates an increase in running costs for registration centres in 2017 and 2018. These entities will provide faster asylum application processing. The funding will also be used to build administrative detention centres. This work means a 0.9  % increase in spending between now and 2018, by which time 1.3 billion will be earmarked for immigrants out of a total social security budget of 23 billion.

At the end of September 2015, SEM indicated that the total number of people in the asylum system in Switzerland stood at just over 100,000, of whom 35,000 had provisional authorisation and just under 40,000 were recognised refugees. This overall figure represents around 5  % of all foreigners living in Switzerland and 1.1  % of the resident population.

The arrival of refugees entails in the first instance costs for social aid, housing, education, medical care etc. However, “the asylum industry”, as the SVP calls it, provides thousands of jobs. In Geneva, 420 people are employed in this sector. A proportion of the 10,500 staff working in university hospitals, public education and various associations etc. should also be added to that figure.

Private companies also do well from it. That is certainly true of the ORS, which runs nine Swiss Confederation centres and 40 shelters. The company had a turnover of 65 million Swiss francs in 2014.

“Over the short term a loss-making business”

“I’ve never seen any studies on the contribution of refugees to the economy,” admits Denise Efionayi, the co-director of the Swiss Forum for Migration and Population Studies.“But over the short term, expenditure will clearly exceed revenue because even after the first three months, during which time work is not permitted, few refugees succeed in finding a job. However, within the following five to ten years, many people are in employment and contributing to the tax and social welfare systems.”

Does Switzerland need these immigrants? “In contrast to Germany before the 2008 crisis, Switzerland has never had a problem attracting European workers,” explains Denise Efionayi. The researcher notes, however, that the Syrians are showing great willingness to integrate. “Those arriving have given up all hope at home. They are leaving for their children and are prepared to make sacrifices for them. That is what convinced members of the German business community to say yes to the Syrians. The refugees will contribute demographic capital to Germany and the same goes for the young immigrants arriving in Switzerland, even if their contribution is marginal compared with European immigration.” When asked about the cost of asylum and potential contributions, the SVP National Councillor Yves Nidegger dubbed the projections of the Swiss Forum for Migration and Population Studies “vague”, estimating that 95 % of those arriving in Switzerland as refugees are not covered by asylum.

Working for a B permit and family reunion status

In October 2015, 30 % of those granted temporary admission – having arrived less than seven years ago – had a job. Also at the end of October, just 16.6 % of recognised refugees who had arrived in Switzerland less than five years ago were in employment. The figure rises to 40.9 % five years after the recognition of their status. “In the early years, the rate of employment amongst those admitted temporarily is higher than that of refugees,” points out Céline Kohlprath, SEM spokesperson. This may be explained by the fact that these people have not been directly persecuted. They also have a strong interest in working to obtain family reunion status (after three years) and a B permit (after five years).”

Temporary and precarious jobs

In canton Vaud, which receives 8 % of asylum applications, 429 people with an F (provisional) permit were working at the end of October, representing 19.3 % of this group. “Some are not able to work for medical reasons. Recent refugees are not acquainted with the labour market, their qualifications are not necessarily recognised and people are still dealing with their war experience,” underlines the spokesperson for the population service in canton Vaud. This canton encourages access to employment by allowing F permit holders to start working as soon as they are offered a contract.

Frédéric Rouyard explains that refugees work in the construction, hotel, cleaning, nursing home, domestic care, hospital and asylum sectors. In Geneva, over 80 % of these jobs were permanent at the end of October.

A study highlights that the employment status of refugees is often unconventional and precarious. In the case of F permit holders, their asylum application has been rejected but sending them back is not possible, permissible or reasonable and is therefore subject to annual assessment. This situation hampers social and professional integration, according to this study.

Stéphane Herzog is an editor with THE “Swiss Review”