Abstract
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INTRA-EU IMMIGRATION: POLISH PLUMBER PROBLEM OR POSITIVE ECONOMIC INGREDIENT? ABSTRACT FOR PAPER TO BE PRESENTED TO THE GENERAL SESSION, NISPAcee, 17TH ANNUAL CONFERENCE, May 14-16, 2009, BUDVA, MONTENEGRO, submitted by Donald E. Fuller, Ph.D., Anglo-American University, Prague, Czech Republic.
PROBLEM. It is alleged that a “Polish Plumber Problem” exists within the EU. Open markets may pull mid and high value added workers toward greater material benefits, even cross-border. The paper excludes migrants from outside the EU. It specifically argues that unequal EU wage and labor markets may attract workers from low wage EU members (EU 12) to migrate toward high wage members (EU 15). Such migration allegedly drains brains from countries of origin and competes unfavorably with host receiving country workers. Thus, the economic and social impact could be negative for both sending and receiving countries.
RESEARCH QUESTION. To what extent are EU labor markets, at least by 2011, likely to provide undue labor market pressure on EU 15 members while undermining the need for value added jobs in the EU 12?
ISSUES. There are two major issues: first, is whether present migration is such that EU 12 workers are settling in the EU 15, or is such migration circular, in that migrants tend to migrate in circular fashion, returning home after 2-3 years’ time due to a variety of factors. Primary factors seem to derive from economic conditions in both the receiving country and countries of origin. The second issue, is whether or not those remaining in the EU 15, cause a permanent malaise both from a home brain drain perspective, and from a job displacement perspective in the host country?
THEORY. Rational man theory argues that man’s primary priority resides in evaluating and acting upon materialistic benefit. Numerous theorists since Adam Smith and John Stuart Mill argued the premise. Over time, David Ricardo, Leon Walras, Vilfredo Pareto, Karl Polanyi, Thorstein Veblen, John Maynard Keynes and many others have supported the phenomenon.
PRELIMIMARY ANALYSIS. Theory/literature suggests that open labor markets contribute to the value added capacity of countries. The U.S. is the typical example provided: the U.S. includes 3.2% foreign workers as a percentage of migrant workers; Europe includes 1.72%. It continues to surpass the technological capacity of Europe, and spends double the amount of national income on technology development. Its patents tend to outnumber those of Europe. Since the Lisbon Agenda extolled the need for increased technological capacity for Europe, very little has changed. Secondly, the number of high value added workers migrating from east to west, has hardly filled existing vacancies in countries such as UK, Ireland, Sweden and even the Czech Republic. The Germans bemoan their educational strategies that do not produce what “industry” needs. Further, the migration of such high value added workers has largely been embraced by EU 15 members. Visas would quickly be granted on behalf of such migrants. The net result is that economic development may well be retarded by labor protections.
The overwhelming element of what is now appearing to be circular migration consists of construction, some services, such as shopkeepers, road construction and young students seeking education and experience. No Polish plumber has made the headlines, let alone created any sizeable impact.. As to brain drain, Poland is now seeing a return of many of its migrants; Polish officials, such as in Wroclaw, are actively recruiting their return with financial incentives.
ANALYSIS. The paper hypothesizes that open labor markets will surpass restrictive labor markets, all things being equal. Despite this hypothesis, EU members continue to delay opening markets or attempt to restrict migration to certain critical high value jobs, though construction is likely to remain included as well. Most countries want computer engineers, doctors, nurses, dentists, and a variety of high value added workers. Yet, the low wage, low tax EU members, such as Slovakia, have provided incentives for automobile production. Slovakia now has the world’s highest per capita automobile production. This alleged “race to the bottom” pits EU member vs. member to engage those workers who seek better working conditions. Yet this involves both corporate interests as well as labor. German auto manufacturers threatened to leave Germany in view of high taxes and wages. Only a ten year agreement with their workers guaranteed jobs, and averted, presumably, an exodus. Yet VW joined with Skoda to locate in Slovakia. This then is the second level of workers: the worker who will migrate to earn the higher wage in the same job. Nevertheless, many if not most workers migrating to UK and Ireland (thus, not outsourced as VW/Skoda in Slovakia), encounter jobs that reward the migrants at one level below their qualifications earned in their home countries. Assumedly they will only remain until wages in the country of origin tend to rise or the economy in the host country tends to experience inflation.
The EU is proposing a blue card for certain workers. It is hardly needed. Those covered can migrate almost immediately. There are vacancies for these jobs. The blue card is simply an accelerated work visa.
METHODOLOGY. The paper will examine migration statistics to measure the prevalence of circularity and of a “hump” in migration caused by economic circumstances in both the country of origin and host country. Second, the paper will search for data that suggest that those countries utilizing more open labor markets tend to initially attract migrants, some of which are high and mid value added. The question remains open as to whether such migrants settle permanently in the host country.
A PRIORI EXPECTATION. We expect to find that intra-EU migration is not overwhelming EU 15 labor markets, and, if anything, high value added jobs are becoming attractive to non-EU members particularly in Asia, reflecting the ongoing labor and educational shortcomings of European members.
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