Europe is facing a growing refugee crisis on a scale that hasn't been seem since World War 2. Over the past three weeks alone nearly 3 million Ukrainians have fled into nearby European countries because of the Russian invasion of Ukraine. However few Ukrainians are willing to call themselves "Refugees", viewing themselves rather as people seeking temporary shelter, with plans to return to Ukraine either soon, or when the conflict is over entirely. For example, from a report coming from the Romanian government out of 431,000 Ukrainians that have entered Romania since the start of the conflict, only 3,800 have asked for asylum. This could be likely to Europe's recent dealings with asylum seeking refugees and the negative connotations that have formed around the word. Or that most Ukrainians fleeing Ukraine have some sort of skill that can be used to work in the countries that Ukrainians are fleeing too.
The economic impact that this crisis will have on the European Union might be catastrophic, at least initially, as seen in the 2015 refugee crisis that saw Europe take in 1.3 million refugees from the middle east. The European Union has already pledged $550 million USD in humanitarian aid for those fleeing the crisis, but experts have estimated that it might take $30 billion USD for the first year alone, to help those fleeing the crisis have food, shelter, and other living arrangements. Dealing with this crisis is going to be a staggering task for the European Union, already strained by the pandemic, supply chain issues, and high inflation.
Inflation in European Union, or Eurozone is 5.8%, and with the increased and forecasted spending needed to deal with this refugee crisis, inflation is expected to rise to 7%. Inflation is not the only economic worry, as the labor force might be significantly impacted by the influx of Ukrainian workers. The level of education in the Ukraine is similar to some of the host countries that refugees are fleeing into. It is important to note that a large amount of refugees are going to areas of other countries where they have a network of friends and family that can help them integrate into the local economy. Ukrainian refugees also have a record of previous employment to help them land jobs in their settled area.
The labor force is sure to be impacted, as impacts are already being reported. Hard to fill jobs like low paying service workers, and home assistants are already being filled. And the labor market for skilled jobs is becoming more competitive as the supply of labor is increasing. While this problem has not been reported yet, we have analyzed the affect of a higher supply of workers has on a job market, and lower wages are a result of it. The article does not address this directly, but does note that Governments should jump on the crisis quickly before political and social backlash follow the sharp changes caused by the refugees. Only time will tell how long the refugees will be in the eurozone for, or how they will integrate into their new environments.
https://www.nytimes.com/2022/03/16/business/economy/ukraine-refugee-crisis-europe-economy.html
I am interested in seeing the EU's decision on refugees from Ukraine. Will they accept refugees? Will they provide work authorization? In my opinion, many people will not return to Ukraine in the near future. However, there is a cost that European countries should bear.
ReplyDeleteIt will be interesting to see what not only the EU does but also the U.S. when it comes to the refugees. I recently saw that around 10 million refugees are leaving the country. I think the labor force will be hit the hardest as unemployment will rise as the population rises
ReplyDeleteIt is interesting that most Ukrainian refugees don't see themselves as refugees and instead people just seeking temporary shelter. Because the war in Ukraine has gone on for a while now, a lot of the country is completely destroyed, and people really won't be able to go back to their homes for a long time, since many no longer exist. I wonder what is going to happen then when more Ukrainians most likely start to ask for asylum once they realize they might be stuck in another country for longer than they first expected, and how that will affect the refugee crisis.
ReplyDeleteIt is interesting to see how war effects not just the countries the war is between, but those that surround and those that help. I think that it will be interesting to see how it plays out with the decisions on refugees and how these decisions affect their economy.
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