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

labour market uncertaintyGuglielmo Meardi

ESRC seminar on migrant workersNorwich, 17 June 2010

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, ELink new migration – uncertainty (Crouch 2008)G. Meardi ‘Where Workers Vote with Their Feet’

(2010) + ongoing project on UK & Spain

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)

Poverty risk by age (Eurostat)

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:• Adaptability, mobility, long hours,

sensitive to $/€• Less sensitive to prestige• They don’t voteNMS 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 mobilityAll 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

• 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?

• 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

• 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?

Link exit-voice?Unionisation, %, 03-08

Emigration, %, 03-07

Unionisation, (000) 03-08

Emigration (000) 03-07

LT -34.1 2.3 -62 -75

SK -34.1 2.0 -196 -88

EE -18.4 0.8 -8 -10

BG -16.2 1.9 -94 -144

PL -16.1 1.9 -340 -721

LV -15.8 0.8 -27 -18

CZ -14.9 0.3 -77 -33

HU -9.3 0.4 -80 -41

SI +2.6 0.0 +9 0

RO +4.2 4.7 +85 -1,000

r = -.7174

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):

2004 2005 2006 2007 2008400 3300 31400 186200 275800

• Political reactions: retention measures by Polish government• Social costs: 110,000 ‘Euro-orphans’ in Poland, European care chain

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)

=> …

Host countries: a new spectre haunting Europe

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 pathsUK• 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• 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

• 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 UKSPAIN Nationals Foreigners

Economy -7% -14%

Construction -23% -64%

UK Nationals Foreigners

Economy -0.9% -4.3%

Construction -4% -8%

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

Labour market reactionsSpain:- 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• 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

• ‘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