Guest workers pay off in Norway
August 28, 2012
The Norwegian state profits from guest workers who pay considerably more in taxes than what they claim in benefits, according to recent research by state statistics bureau SSB. Immigrants, however, join average Norwegians in pulling more money from the public purse than they put into it.
Newspaper Dagens Næringsliv (DN) has reported that taxes of about NOK 5 billion (USD 850m) were paid in 2010 by the roughly 117,000 guest workers in Norway at the time, according to data compiled by SSB (Statistics Norway). Guest workers are defined as people working and residing in a country for six months or less.
Give less than they take
Very few guest workers decide to stay in Norway after their temporary jobs end, according to SSB. This means that very few benefit from the country’s generous social welfare programs.
“There is little doubt that guest workers mean profit for Norwegian public finances,” Erling Holmøy, a researcher at SSB, told DN. “Guest workers go home before they become disabled or use health and elder care.” That suggests they pay more into the state welfare system than they take out of it.
Of the 64,000 guest workers registered Norway in the fourth quarter of 2007, only 7.7 percent were still in the country a year later, most of whom were still working. None was enrolled in welfare programs while only 0.2 percent were registered as unemployed or students. The figures had hardly changed even after several years, according to Holmøy.
“Everything indicates that they create a surplus,” Holmøy told DN. Workers from Poland, Lithuania, Sweden, Denmark and Great Britain were the largest contributors to the Norwegian treasury.
Immigrants not as sustainable
An earlier report from SSB showed that immigrants might produce higher revenues for the state early in their residence, but that this eventually turns into a deficit.
According to Holmøy, who wrote the SSB report with colleague Birger Strøm, the average Norwegian also contributes less money to the state than he or she receives back through welfare services over a lifetime. Norway’s large oil revenues, stacked away in a sovereign oil fund to save them for a future when the country’s oil and gas resources may run dry, can be tapped to cover the gap.
“But as the number of inhabitants increases because of immigration, there are more people to share the oil money,” Holmøy told DN. “Immigration will therefore lead to a deficit in the long run. It is not sustainable when each person costs more than he or she brings.”
Critics: ‘Don’t blame immigrants’
The report has been met with criticism, with some saying the question of profitability is irrelevant because Norway has often taken in immigrants because they are in need, not because the state can profit from them.
Others pose the question of why immigrants often are “blamed” for being a burden on the state welfare system, saying that if the average Norwegian also takes more than he or she receives over a lifetime, it is the welfare state that is not sustainable and in need of reform.
Another argument is that the report may leave the impression that Norway would do better without immigrants. However, working immigrants are a valuable resource and without them the economy would be put under even more pressure, some say.
Norway is currently trying to attract more engineers, for example, to meet demand in the offshore industry. Also among those needed are health care workers, nursing home attendants and service industry employees.
Views and News from Norway/Aasa Christine Stoltz
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