Purple pig and other thoughts
A little bit of basic economics. Long overdue to turn the conversation away from "refugees" and towards a win-win for local EU economies struggling to find workers. First day of school in Ukraine.
Took this photo yesterday in the new Heidi Horton collection. The purple pig is enormous, perhaps you can tell from the painting hanging on the wall behind her? A mother. Sometimes I feel like a mom to two dozen kids. Non-stop texts and calls with questions big, small, very relevant, not at all my area of expertise. This morning I will take a little breather and try to put in words what has been spinning in my head in recent weeks. Namely: where we are and what needs to change.
The asylum system, under which Ukrainians’ basic needs are being provided for under Austrian law, is designed for failure. It is designed to send the message to migrant men in third world countries: do not come to Austria. Its intent is to deter. When the EU passed the “temporary protection” status for Ukrainian citizens, it did not specify how the refugees should be provided for. Therefore, conditions for Ukrainian refugees vary widely from country to country within the EU. Some, like Belgium, treat Ukrainians on the same financial basis as an unemployed local citizen seeking aid. While others, like Austria, treat Ukrainians as asylum-seekers whose cases have not yet been approved, putting them on the so-called Grundversorgung (basic care). The problem with this basic care is that it is like a product of communism, something that provides bed, bath & board, without understanding how markets work.
As an economics major, it is my belief more often than not, that bad policy derives not just from racism and xenophobia (that too) but simply from a lack of understanding of how markets work and why as a society we want and need markets to work. When we humans interfere and prevent supply from meeting demand, you get bad outcomes, and throw tons of money at bureaucratic solutions which are very often giant cost centres with little valuable output other than pages and pages of pdfs no one will ever read.
So now we have an influx of often (but not always) highly educated refugees from Ukraine. If they fled with the clothes on their backs and what savings they could take with them, that money ran out quickly. The vast majority did not bring with them enough money to rent housing on their own. So what did they do? They asked the state for help. The state, at least at the beginning (more on the housing crisis in a minute), provided room and board. Board was either pretty terrible food three times a day, or €260 per adult per month (actually €215 because only Vienna and Tirol are to my knowledge paying out the new amounts the government increased this summer). So what’s the problem, you might ask? They have a roof over their heads and some money for basic foodstuffs or are “fed”.
The problem is Ukrainians living in state-provided housing for free cannot work. Because, remember, conditions like asylum-seekers. The law states that those seeking asylum, i.e. in Grundversorgung, cannot legally earn more than €110 per month per adult and €80 per month per child in the family. In other words: you ask the state to put a roof over your head and give you minimal money/food, you are forbidden from legal employment. Natasha wanted to get a job for two hours a day cleaning floors in a hair salon. I had to tell her not to take it. I had to warn her if she earns €270 per month, she will lose the €600 (food money + rent for her and Pasha) she receives from the state. It’s Kafka-esque and unfortunately very real.
The cover story this week in Profil states 250,000 open jobs in Austria and no one wants to apply for them. 80,000+ refugees from Ukraine in Austria desperate to start working and start providing for their families. But the poorest, those who could not afford to rent private accommodation, which is actually really hard here — months of deposits required, agent feeds, three months of salary slips — they are living in accommodation provided by the state, and therefore banned from the labor market. A closed, viscious circle.
So what do you do when you cannot work legally but need money? You work illegally, doing whatever you can, whatever you find, for whatever money the “employer” is willing to pay you. This illegal work is also reportedly (refugees told me directly) taking place inside accommodation provided by the state, paid out in cash by NGOs (I have heard of more than one instance of scrubbing toilets and washing floors at hourly rates which would not be considered fair in any EU country).
This leaves you ripe for exploitation and doesn’t help you get any more integrated in the country. You are not receiving a paycheck on your bank account, you are not paying taxes, you are not in the “system” for other benefits working parents are eligible for. You agree to any wages because some money is better than no money. You are a trapped audience.
Austria’s asylum system should never have been used to provide for Ukrainians. They themselves know the numbers perfectly. They talk to, as they say, the “Syrians” on the playgrounds. They know a Ukrainian adult in state care gets in Vienna €260 per month (in Steiermark it is only €150 just because…), but a “Syrian” whose family has had their asylum case approved collects €800 per month in unemployment (or something like this) and therefore argues it doesn't even make sense to go to work…
In short, don’t mess with labor markets. Keep them open. Making it as easy as possible to go to work. One rumour I heard recently is the idea to give Ukrainians a grace period of 3-6 months to live in state-provided housing and work legally before having to move out. Would be a very smart solution, but then the problem will be immediately (because Austria), how to make the change to the law without affecting all the other asylum-seekers the government wants to prevent from working (because “pull factor” as they say).
They should have created a unique set of provisions for Ukrainians fleeing war and all of this would be so much easier. Instead, we have now a state that is largely absent, NGOs overworked and not responding to serious needs fast enough if at all.
We have a major housing crisis as new arrivals quite literally have nowhere to go and many Ukrainians who have been in Austria for months are seeking new housing all at the same time and there is nothing, really nothing, to be found which they can afford and access easily. This “refugee” bureaucracy of state and NGO costs a huge amount of taxpayer dollars (Euros sorry) and does so little in return. A free and open labor market would solve so many problems immediately. And yet…
A family from Mariupol whose son is to have sight-restoring surgery is told there is no more housing in Vienna, not even for them.
Another family from Mariupol would love to send their kids to school as they wait for Canadian visas but they are in no man’s land in temporary housing neither here nor there.
A young mom with stage IV cancer and three kids is housed in a dorm which is a shelter for homeless in winter and may close this fall.
A young woman, a victim of abuse, calls me crying from a refugee hotel in the middle of the country, says there is theft and violence and it doesn’t feel like a safe place to stay, describes an atmosphere of low-ranking NGO employees on power trips and threatening anyone who speaks up with eviction.
A mother of a newborn writes me yesterday “We, me, my newborn child, my 8 year old son, and my mother are looking for a new home. We are very upset, as the guardian refuses to provide us with further housing. You have to knock on many doors. Can you help us with this difficult housing search?”
I received this message a few days ago. I was immediately told as a cancer surgeon she could work now in Poland. I forwarded the information.
The hearing-impaired man from Ukraine in a wheelchair who left last week, he wrote me from a refugee hall in Lviv. He would try Poland. He hoped it would be better for him than Austria was “I really like Austria. Well, the general manager of the boarding house ruined my stay I Austria, it’s a pity that I had to go.”
A 73 year old woman wrote me yesterday from that same “boarding house”. “Hello Tanechka, sorry to bother you, I’m 73 years old. I’m from Ukraine, I came alone, I temporarily live in Vienna, we are fed here, thank God, for which I am infinitely grateful, but I have no pocket money or blue card still not, they say you need to register first, but where they don’t say, look for yourself, but where to look? I was told that you can help. Thank you for your help.”
She is in a wheelchair. I will meet her on Sunday. I will bring her a grocery card to the shop across the street so she can buy fruit, yogurts, some toiletries. But I cannot help her register her way out of “no man’s land” a situation Vienna has known about for months and done nothing about.
Housing, jobs, schools. One crisis piling on top of the next and all because Austria tried to shove a square-shaped peg into a circle hole. If the asylum-seeker Grundversorgung system had never been used, we could have welcomed Ukrainians here, provided housing, given enough cash to buy basic necessities for a limited period of time (to those able to work), for an extended period of time to those unable to work, and opened the labor market. Provided housing close to where we need workers the most.
But “refugees” are treated by one group of bureaucrats and “labor market” is handled by a total different group of bureaucrats and my biggest suggestion is remove all the barriers to entry and let them work and live in state-housing until they get on their feet. The country needs people to fill the jobs Austrians don’t want to take (frankly because unemployment payments are either too high or wages are too low but that is another can of worms).
At the moment, it truly feels, at least in my phone and in my role as a volunteer, as if no one is in charge. There is no visible oversight, there is no palpable accountability.
So let the Ukrainians help themselves. Let them all work. Don’t kick them out of state housing for getting legal employment. Actually pay out the state subsidies (at the moment a different process and seemingly different amount in each of Austria’s nine federal states). Stop looking for ways to take funding away from them (“oh your rent is too high we can only reimburse X”); instead let them empower themselves.
The child benefit Familenbeihilfe is now available to Ukrainians but it requires a printer, address, blue card, registration, bank account, ability to make photocopies and go to a post office and fill it all out correctly. The most well educated who arrived here first will receive the money first. Those who recently fled war zones and occupied territories and arrived over the summer with nothing will not be in a position to even think about this yet. The mom with cancer, whom I took yesterday to the dentist, she still doesn’t have blue cards for her kids, doesn’t have a bank account yet, and could really really use the money. They are in living in what is a former homeless shelter.
The Klimabonus (€500 refund per adult and €250 per child paid to everyone living in Austria more than 183 days in 2022 as a compensation for inflation with no differentiation as to one’s income level — again zero understanding of how inflation works lol or cry-out-loud) will only be paid to Ukrainians in 2023, as the cut-off date for this year was made early July. How convenient. The website has no Ukrainian translation. Should have been obvious to me when I saw that yesterday.
There should be a physical location the most vulnerable refugees could go to for immediate cash and assistance. Instead, this government closes reception centres. Lower Austria doesn’t have one anymore. Vienna tells families from Mariupol there is no housing. And on and on and on.
The Ukrainians could have transformed our society for the better, at least temporarily. They are well educated, hard working, digital, fast learners share similar European values. A true shame the laws, the state, and NGO bureaucracy in Austria makes this all so damn difficult. Way too much is falling on the backs of individuals like me. None of it is sustainable.
I have heard terrible rumours ranging from closing Austria entirely to new refugees this fall, to reducing the square meters allocated per person. So a family of four may get a knock on the door and be introduced to four more people who are now their neighbours. Unfortunately, one thing I have experienced firsthand this past six months: just when you think it cannot get worse, it does.
There is no differentiation at the moment between refugees from active war zones and occupied terrorises, whose homes are bombed out and have nowhere to go back to, and those who left in March from areas of the country now deemed relatively safe. This is the elephant in the room no one wants to talk about. If resources are finite, as Ukraine is a huge country of 40 million, and Austria only has a population of 8.9 million, then maybe it is time to talk on an EU-level about who shelter will be given to. If social housing resources were given away in spring to families who now could go home, should that not at least be a conversation?
Shared some thoughts on that yesterday here. As I wrote, as an economics major, I don’t believe money grows on trees and if it is a matter of money, then by all means do more to make it possible for more Ukrainians to say in Ukraine, and for EU to absorb those who have really suffered, have really no homes to go back to, and not just the who thought it would be nice to come here for a year and have their kids learn German in school even though the school back home in Lviv or Ivano-Frankivsk is open. Yes, this is a little bit saying the quiet part out loud. I haven’t seen anyone bring this up yet; I think it’s important as Ukraine is an enormous country and personal experiences range from unimaginable and incomprehensible to a few days of scary in March.
That’s enough for today. I don’t know how to lobby in German, so I share my thoughts in English both as free therapy (lol) and also to get these topics into the public conversation. I see things as an outsider, and as an economist, and at the moment I see way too many roadblocks to the free market. State housing or minimal support is like a cushion to make sure no one falls through the cracks (in theory), but what you really need is to lift all the red tape and make it as easy as possible for those able to work to find a roof over their heads, a job, some kind of school for their kids. Those unable to work (elderly, handicapped, traumatised) should receive enough to take care of their basic needs in dignity.
We need a “crisis ambulance” for refugees, a location in every major city where they can go (open 24/7) and receive perhaps an emergency cash payment and housing guidance etc. Many of them cannot even make a local phone call. They need a Telegram address ideally they can contact. I do 70% of my communication with them over Telegram (maybe 20% Facebook Messenger, 10% WhatsApp).
Sorry this is way too long. I will end with a somber photo which stuck in my brain from the first day of school in Ukraine yesterday. Below was Zelensky at a school in Irpin. Quite the contrast. Both Ukraine. I guess that’s the point I was trying to make above.