AN OFFICIAL at the Ministry of Finance has challenged the Finns Party’s justification for its demand for requiring 2,500 euros in gross monthly income from work-based immigrants from outside the EU, reports Helsingin Sanomat.
Riikka Purra, the chairperson of the populist right-wing party, has cited a calculation made by the ministry as justification for the limit.
The calculation, she said, indicates that on average people contribute positively to the public economy – that is, they pay more in taxes than they receive in social security benefits – only if their gross income exceeds 2,500 euros a month.
A work-based residence permit can presently be granted if the immigrant will earn at least 1,331 euros a month in a job not covered by a collective bargaining agreement or the minimum wage in a full-time job covered by a collective bargaining agreement.
Jukka Mattila, a financial advisor at the Ministry of Finance, told Helsingin Sanomat on Wednesday that public interpretations of the calculation are founded on an “unfortunate misunderstanding”.
He stated to the newspaper that the calculation in fact indicates that an employed person on average has a net-positive impact on the public economy if they earn slightly over 2,000 euros, rather than 2,500 euros, a month.
The calculation, he also reminded, is unrelated to work-based immigration as it was drafted as part of the employment services reform to estimate the benefits of employing an unemployed person to municipalities. If the estimate was extended to the impact of work-based immigration on the public economy, it would also have to take into account the indirect taxes, such as value-added tax, paid by and the cost of the public services used by the employee.
The Ministry of Economic Affairs and Employment viewed earlier this month that the income limit for work-based immigrants should be set at 1,500 euros. The proposal is based on its estimate that people of foreign backgrounds are typically so-called net contributors if they earn over 1,500 euros a month.
Mattila argued that the calculation has similar problems. It both fails distinguish between work-based immigrants and other immigrants, and takes into consideration only the taxes immigrants pay on their earnings and the direct income transfers they receive.
He underlined that it is crucial to examine the economic impact of work-based immigrants in the long term in order to answer questions such as do they stay in the country, does their pay increase over time and do they become reliant on social security benefits if made redundant.
Setting a single income criterion for work-based residence permits on economic grounds is virtually impossible given the effects of variables such as age, according to Mattila. A person moving to the country at a younger age, he explained, is more likely to contribute positively to the public economy because they can work longer before retiring.
Work-based immigration is one of the most contentious issues in the coalition formation talks underway between the National Coalition, Finns Party, Swedish People’s Party and Christian Democrats.
While the Finns Party has called for limitations also on work-based immigration, the Swedish People’s Party is seeking to increase both humanitarian and work-based immigration in order to address labour shortages and promote economic growth.
The four parties are seeking common ground on the most contentious issues, including immigration, this week before resuming work on other issues.
Aleksi Teivainen – HT