German companies profit from the new “refugee industry”By Sven Heymann
14 August 2015
https://www.wsws.org/en/articles/2015/08/14/refu-a14.html
German companies profit from the new “refugee industry”
*By Sven Heymann 14 August 2015*
“War feeds its people better”. This line from Bertolt Brecht’s “Mother
Courage” could be the motto of a new industry today that enriches itself
from the plight of refugees.
Thousands of people who seek refuge in Germany from poverty, war and
dictatorship find catastrophic conditions upon their arrival. Since the
state has contracted with private companies to provide for their care and
treatment, it has opened up lucrative business opportunities. The less
spent on refugees, the greater the profits.
Details were reported late last week by business daily *Handelsblatt*,
whose main concern was cutting down on government spending. However, the
newspaper revealed certain details of a “refugee industry”, for which “the
new, forced migration of peoples [acts] like a never-ending economic
stimulus package”. Starting with providing accommodation in refugee hostels
and hotels, the supply of shipping containers (for lodgings) and other
facilities, and the security personnel to guard them, it all makes for a
profitable business, for some running into the millions of euros.
The Interior Ministry estimated that the care of a refugee costs
€12,000-14,000 annually. At the same time, the ministry expects about
450,000 people will seek asylum in Germany this year. Thus the state is
making €5.4 and €6.3 billion available for their care. Profiteers are
seeking a lucrative piece of this cake.
The company “European Homecare”, the largest provider of refugee
accommodation in Germany, now operates more than 50 hostels. It gained
notoriety last autumn when it was removed from managing a refugee hostel in
Siegerland Burbach after its security guards tormented and tortured
refugees.
Through its provision of refugee hostels, including security personnel,
European Homecare now makes millions in profits. According to*Creditreform*,
the company’s turnover in 2013 was a whopping €30 million—and rising. With
a return on equity of 66 percent, the company beats all companies listed on
Germany’s DAX index.
The personnel expenses per hostel costs European Homecare about €1,400 per
employee per month. This contrasts with revenues in excess of €4,000 per
employee per month. So the company is not only exploiting the situation of
refugees but also their own employees.
A former hostel manager, whom *Handelsblatt* quoted, mentioned an internal
company guideline that security guards should not be paid too much, since
otherwise they would not be eligible for state housing benefits. A monthly
salary of €1,400 was therefore already too much for an employee controlling
the entrance. Overall, according to the newspaper, European Homecare pays
on average less than €2,000 for white collar employees, including the much
better paid hostel manager.
Business is also flourishing for the manufacturers and lessors of shipping
containers to be used as living units. Demand is so great that there are
delays, and affordable containers for use as accommodation cannot be
obtained for months. As a result, some companies are now hiring additional
temporary workers. Since there are currently few containers available for
rent, many municipalities are buying their own containers to use as
accommodation for refugees.
Not only private companies but also charities like the German Red Cross
(DRK) are recording increased revenues. The DRK now looks after more than
15,000 refugees nationwide in more than 40 camps. The number of those
affected has doubled in two weeks, writes *Handelsblatt*. Meanwhile, the
DRK has also erected tent camps, manages the initial reception of refugees,
provides food and takes care of medical emergencies. The bill for these
services then goes to the respective municipalities.
Numerous owners of hotels and inns are also taking advantage of the
desperate situation of the refugees.
*Handelsblatt* reported on a rundown hotel near a Düsseldorf railway
embankment where an individual could rent single room for €33 per night.
Now, the city authorities will pay on average €35 per night per refugee.
And instead of a single occupancy, up to five refugees are housed in one
room—a rich jump in profits.
As a result, some hotel owners have now completely changed their operations
to only providing accommodation for refugees. Especially in less touristy
areas, many hoteliers have turned to providing mass accommodation for
refugees, which is then paid for by the municipalities. Given the
increasing number of asylum-seekers, many of these hotels are then fully
occupied year-round, or over occupied—a lucrative business.
In Saxony, three out of four accommodation facilities for refugees are
operated privately; in Saxony-Anhalt it is nearly two-thirds. Where the
major part of the profits flows directly into the pockets of private
companies, most of the municipalities have remained quiet about the cost of
such accommodation.
The case of the Berlin state executive’s Social Affairs Senator Mario Czaja
shows that there are sometimes extremely close ties between politicians and
the refugee industry, enabling it to operate a profitable business. Czaja
is accused of having shown a preference for two hostel operators in bids,
who then submitted completely prohibitive cost demands, and were initially
awarded the contract.
Moreover, municipalities have to rely on private providers because the
public infrastructure is completely dilapidated, especially in eastern
Germany. Firstly, fewer and fewer financial resources have been provided
for the reception and accommodation of refugees in recent years. Secondly,
after the reintroduction of capitalist relations into eastern Germany, the
public infrastructure there has largely disintegrated. The responsibility
for this is born by the same parties whose call for military intervention
by the Bundeswehr (Armed Forces) all around the world is setting the stage
for an even greater refugee crisis.
https://www.wsws.org/en/articles/2015/08/14/refu-a14.html
Received on Sat Aug 22 2015 - 20:02:45 EDT