Migration and Irregular Work

1. Migration and Irregular Work Judit Juhász Panta Rhei Social Research Bt. Budapest Tel./fax: +(36-1) 200-1942 E-mail: juhasz@hungarnet.hu

2. Debates • Economic, social and political significance • Regulation • Possibilities of measurement

3. Problems of definition, terminology Diversity of definitions different estimates Lack of elaborated methodology conceptual uncertainity

4. Illegal/irregular migrantworker • Legal category • Economic determination • socio-demographicinterpretation Same activity might be qualified/classified differently

5. informal economy • informal economy - all economic activity which is not officially reported, • registered is neglected when calculating the GDP of the economy. • irregular employment • „black labour” : • Employers fail to register their employees (evading taxes and contributions) • Employees accept the omission of registration, (and fail to pay their taxes and contributions) • the employee does not report that they are not entitled to unemployment benefits (as they are working); • employing foreigners without a permit • “Grey labour” : • registered labour, where the actual employment differs from prescribed conditions. (eg. registering at minimum wage,, but in practice paying more, and the difference is transferred tax-free from pocket to pocket. )

6. Methodology • In-depth interviews (experts, migrants, employers) • Secondary analysis of existing information (research, literature, statistical data, press) • Empirical research 35 experts: 16 governmental bodies 6 local governments 4 members of parliament 4 trade unions and 3 unions 2 organisations for Hungarians living beyond the borders 42 foreign emloyees 6 Hungarian employers • Expert surveys (Delphi method combined with a standard questionnaire) – 303 respondents Mailed and filled in by the experts themselves

7. Scale EU: 7-16% of GDP Hungary.: 20-30% of GDP Public opinion: part of everyday norms • Black work: 37% does not strictly condemn • 28% would take part

8. The proportion of illegal work • in the whole economy: 25-30% ~1,000,000 ps. • Within this 15-20% is from foreigners. (2000: 30%) • The range of the estimates is large: • 30% of experts: less than 20 thousand, • 30% : more than 100 thousand. Average: panel: 115,000 fő entire sample: 80,000 fő

9. Causes • high level of taxation and labour costs • high social acceptability of irregular work • weak internal mobility • difficulties of getting permits the basic problem relates not to foreigners but to irregular employment in general

10. Effects Positive • a possibility to fill less attractive and poorly paid jobs. (70%) • With flexibility and low wages contribute to the economic development. (45%) • loss of taxes and revenues • distortion of competition • it affects the social insurance system negatively • conserves poor working conditions Negative

11. Past trends declining trend of increase

12. Future trends (expectations) The rate of growth is decreasing on According to the estimations after 5-10 years the growth stops

13. Composition by citizenship and nationality 90% from the neighbouring countries, 60% Hungarian

14. Illegal work and qualification Qualification requirement of irregular labour (% of unqualified work)

15. Sectors • Construction – need for qualified and unqualified workers • Agriculture – seasonal works, multitudinous need for labour force • Catering and entertainment • Trade, vending • Textiles • Households • Highly qualified emloyees

16. Employment by sectors Source: HCSO, National Employment Office

17. Foreign or Domestic Irregular Labour? Is there any difference? Advantages of foreign irregular labour (%)

18. Labour-market competition * 1-Fully disagree, 5-Fully agree

19. Why? Reasons for the irregular emlpoyment of foreigners in general Munkáltatók Munkavállalók

20. Why? The main reason for employing foreigners irregularly (panel) Reasons for workers

21. Reasons of migration

22. Why Hungary? • Distance, knowledge of the language, simplicity • Relatives and aquaintances in Hungary • Hungarian nationality, emotional reasons • Almost a mother country (related to other countries) Personal motives • Providing existencial needs • Looking for adventure, getting rid of the ties • Long-run plans, existance, substantiating the career

23. Conditions • Conditions for work – lack of safety; high intensity of work; working overtime • wages – usually but not always worse than for the Hungarians • Conditions for housing – cheap The employees are losers in this deal

24. Accommodation of Romanian irregular workers at the edge of Budapest

25. The accommodation inside „They are rather grateful for it ”

26. Ways out • reduction of costs and difficulties of legal employment • increase the flexibility of regulation • This includes the adoption of differentiated exceptions aiming at the “whitening” of the informal economy and black labour • decentralizing the decision making mechanism based on the principle of subsidiarity and increasing the capacity and effectiveness of the administration • efficient enforcement of the existing legislation on the basis of clearly stated political aims and commitment, supported by appropriate organisational, human and financial resources • vocational training • well conceptualized, close European cooperation