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Looking for ultimate flexibility: East-West migration in the EU and labour market uncertainty. Guglielmo Meardi ESRC seminar on migrant workers Norwich, 17 June 2010. A multi-level interpretative effort. Structural approach to labour markets + comparative analysis of actors reactions

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looking for ultimate flexibility east west migration in the eu and labour market uncertainty

Looking for ultimate flexibility:East-West migration in the EU and labour market uncertainty

GuglielmoMeardi

ESRC seminar on migrant workers

Norwich, 17 June 2010

a multi level interpretative effort
A multi-level interpretative effort
  • Structural approach to labour markets + comparative analysis of actors reactions
  • Country of origin determinants, e.g. PL, LV
  • Country of destination determinants, e.g. UK
  • Sector specificities, e.g. construction in UK, E
  • Link new migration – uncertainty (Crouch 2008)
  • G. Meardi ‘Where Workers Vote with Their Feet’ (2010) + ongoing project on UK & Spain
context east
Context: East
  • Social failures of EU integration, despite economic and geopolitical successes:
    • Workers as ‘losers’ in relative and sometimes absolute terms
    • Strong dissatisfaction with working conditions (EWCS, qualitative research)
    • Extreme marketization
    • Residual legacy welfare state does not protect today’s workforce
    • Continuous weakening of unions, faster than in EU15
    • Perverse transfer of the ‘social acquis’
    • Increased social pressure stemming from competition for FDI, Maastricht
    • Disappointment with EU promise, populism
  • Do you remember?

‘most people were ‘better off’, but they had suffered and continued to suffer this slight improvement as a catastrophic experience’

(E.P. Thompson, The Making of the English Working Class, 1966, p212)

context west
Context: West
  • EU’s ‘almost desperate structural need, in both demographic and labour force terms, for increased intra-European population movements’ (Favell 2008)
  • 20 years of admiration for US immigration-driven growth
  • 10 years of longing for flexicurity, but reforms are politically costly (Germany, Italy, France)
  • Financial crisis: flexicurity myth dismantled, contradiction between need for secure consumers and need for flexible workers
  • Wages already constrained by EMU, social pacts, de-unionisation: traditional Marxist explanation (Castles and Kossack) insufficient
  • Migrants as the solution of the uncertainty problem?
pros and cons
Pros and cons…

Pros:

  • Adaptability, mobility, long hours, sensitive to $/€
  • Less sensitive to prestige
  • They don’t vote

NMS additional pros:

  • White and Christian
  • Extremely high activity rate (78% vs 67%)
  • Extreme mobility: they go home when not needed
  • Potential solution to trilemma: migrants’ segregation / good ethnic relations / border control

Cons:

  • Need to be ‘temporary’ and replaced often
  • Need not be integrated socially
  • Social costs for migrants themselves (hidden suffering)

NMS additional con:

  • EU-wide migration policy?
  • EU limits to selective social policies

=> More or less feasible for intra-EU migration?

the realities of intra eu mobility
The realities of intra-EU mobility

All forecasts wrong:

  • Boeri/Brücker 2000, UK Home Office: no worry, nothing new
  • 2m, not 1m (Boeri/Brücker) arrivals in EU, 200,000/y, not 15,000/y (Home Office) in UK
  • Sinn/Ochel 2003, Kvist 2004: threat to welfare states, ‘social raids’
  • Very high activity rate, very little social burden

Lessons:

  • Evidence of disregard for social factors
  • Do not extrapolate regardless of context!
  • New: ‘Transnationalism’, erosion of distance
  • ‘Mobility’ rather than ‘migration’
post 2004 developments
Post-2004 developments
  • EC enthusiasm (2006, 2008): complementarity, growth, tax revenue, pension funding, inflation control

€€€

  • Race to opening in most EU countries (except A, D) following UK/Ireland success (not the bottom – another wrong forecast by Boeri/Brücker)
  • Little effects on local wages (-0.09% if you still trust Brücker)
skilled unskilled or deskilled
Skilled, unskilled or deskilled?
  • LFS: 1% of EU15 workforce, but 1.9% of elementary occupations and 0.1% in skilled occupations
  • But higher qualifications than EU average!
  • Mechanisms of deskilling, brain drain, especially on female careers (Currie 2008)
countries of origin
Countries of origin
  • Extreme case of ethnic minorities in Estonia, Latvia, Romania, Czech Republic
    • Emigration as political ‘safety valve’ (Piore 1979)
    • ‘Exit’ following lack of ‘voice’ for ‘grey passport’ Russian speakers of LV, EE
  • Exit for dissatisfaction with jobs/job offers/welfare
    • Eurobarometer: 59% for income, 57% for working conditions
    • Inverse association migration – welfare (especially sickness, family and unemployment benefits)
    • Voting with their feet?
s elf reinforcing or self defeating process
Self-reinforcing or self-defeating process?
  • Mobility lowers unionisation (e.g. Poles in the West Midlands: 10% in PL, 3% in UK)
  • Estimates: exit of >10% workforce in LV, LT, RO, >5% in PL, SK (EU15 cross-border mobility: 2%)
  • Labour shortages: wage concessions, concentrated in high-emigration countries and sectors (2004-06: +89% in SK, +60% in CZ; +118% in LV, +100% in EE; +26% in €-zone)
  • But not related to collective bargaining (lowest coverage in the Baltic states, great wage drift)
  • Some evidence of union regained assertiveness, but no revitalisation:

Strikes in Poland (days):

2004200520062007 2008

400 330031400186200275800

  • Political reactions: retention measures by Polish government
  • Social costs: 110,000 ‘Euro-orphans’ in Poland, European care chain
an extreme case latvia
An extreme case: Latvia
  • An hyper-neoliberal vicious cycle:

Most regressive social system

=> high mobility

=> non-productive investment

=> bubble

=> collapse (house prices 2009: -70%)

=> even more ECB- and IMF-dependent

=> cuts in nominal wages by 15-27%

=> new boost to migration (+24% into the UK in 2009, while -54% from the other NMS)

=> …

uk example
UK example
  • Bank of England, employers’ enthusiasm
  • Government enthusiasm… until 2008

Home Office, 2006: ‘the more favourable work ethic of migrant workers had the effect of encouraging domestic workers to work harder’

  • Until only 5% of NMS workers apply for child benefits, <1% for unemployment benefits
  • Little effect on wages, unemployment, but growing ‘fear of unemployment’
  • 39% find job via agencies (UK nationals: 4%)
  • 53% temporary contracts (UK nationals: 6%)
  • Interviews: migrants decisively negative view of TWAs
  • Biggest disruptions from movement of services, posted workers
uk germany parallel paths
UK-Germany parallel paths

UK

  • Open borders
  • Liberal labour market
  • TWA
  • Temporary contracts
  • Residual welfare and pressure to leave as soon as unemployed
  • high employment rate
  • 5,000 (?) posted workers

Germany

  • Closed borders
  • Corporatist, unevenly covered labour market
  • Less employment migration
  • Seasonal work programs
  • Very high self-employment, also in factories, agriculture, care
  • 22,500 NMS-owned companies set up in 2004-06
  • 133,000 posted workers, also within factories
  • Extreme, hard to control cases of exploitation
crisis
Crisis
  • Concentration in the most affected sectors (construction, manufacturing, travel-related services)
  • Eurostat: unemployment up more among non-EU nationals (+2%) than EU nationals (+0.5%) in 4Q 2008
  • Ireland again an emigration country, but ‘any sad new song should be in Polish’ (Irish Independent): -30,100 NMS citizens in a year
    • NMS’ citizens in Ireland: 6% of workforce, 24% of job losses (Central Statistics Office, 2009)
the construction case
The construction case
  • Seasonality, volatility, mobility and risk
  • Spain and UK: major bubble in the 2000s, largest increase in immigration, painful burst, differently flexible labour markets
  • UK: mostly from Poland, Lithuania
  • Spain: mostly from Romania, + Latin America, Morocco
job losses 2009 spain vs uk
Job losses, 2009: Spain vs UK

Note: National Migrants Survey in Spain, but only (migration-underestimating) LFS data in the UK

labour market reactions
Labour market reactions

Spain:

  • Large share of undocumented migration
  • Mostly SME (second home) sector
  • Stronger self-employment regulations, collective bargaining
  • Rare foreign providers
  • Segregation within companies
  • No exclusionary option, strong union inclusiveness but low diversity awareness; strong unionisation of Latin Americans
  • Problems of guaranteeing appropriate collective agreement

UK:

  • Large share of self-employment, agencies, foreign contractors
  • More fragile collective bargaining
  • Small-large site dichotomy
  • Regional differences
  • Segregation by sub-sector and company
  • Union inclusiveness but some exclusionary tones, tensions, esp. in the North
  • Problems of wage transparency, agencies, posted workers, job grading
  • ‘Variety of non-compliance’ rather than ‘variety of regulations/capitalism’
h s implications
H&S implications
  • Frequent reporting, but little evidence, of worse H&S for migrants (overall decline of accident in the UK, stagnation in Spain)
  • Frequent mentions of job mobility, language, inexperience, segregation as risk factors
  • Increased risk in countries of origin (PL)
  • Crisis: ‘positive’ effects on accidents, but likely higher risk when growth restarts
  • UK: stronger effort in providing H&S training to foreign speakers
  • Spain: ‘yes, well, but if they have arrived here and live here, then they must understand something’ (employer); ‘training may have contrary effects’ (inspector)
conclusion
Conclusion
  • ‘Exit’ as typical market behaviour and response to liberal project and socio-political failure (‘voice’) in NMS and at EU-level
  • Ambivalent link between exit and voice: alternative in the short term, but oscillating historically
  • Intra-EU mobility: quasi-solution to the trilemma, but crisis, socialisation and ‘voice’ disrupt it: even in the optimal conditions of NMS mobile workers, the homo economicus doesn’t really exist