Thursday, 17 March 2011

A New Wave of Emigration?

On May 1st the German and Austrian labour markets will finally be opened up to workers from the new EU member states that joined in 2004. This is the date when the 7 year opt-out period, where countries could prevent workers from the new member states from working in their countries, finally comes to an end. And about time to. The situation whereby goods and capital could freely move around the EU but the movement of labour from East to West was restricted was never justifiable. Austria and Germany have been the only countries to maintain these restrictions for the whole seven year period - although most countries restrict the entry of workers from Bulgaria and Romania.

The question that is now raised is whether we will see a new wave of migration out of countries such as Poland? Already large number of Poles work in Germany and it is in fact estimated that there are already more Polish workers in Germany than in the UK. However, the vast majority of these workers are employed illegally - often in low-skilled manual jobs. Also, since January this year Polish workers have not been required to obtain permits to take up seasonal jobs in sectors such as the hotel industry, gastronomy, agriculture, forestry, fruit and vegetable processing.

Nevertheless, it is estimated that between 300,000 and 400,000 Poles could move to Germany to seek work in the next 3 years. It should be remembered that before Poland joined the EU in 2004 it was predicted that around 60,000 Poles would emigrate westwards - although it turned out that between 1.5 and 2 million Polish workers moved to Ireland and the UK between 2004 and 2008. Now we may hope that researchers have learnt from their past mistakes and that there will not be such discrepancy between the predictions and reality this time round. Also we should not expect that the level of migration will be on the scale of that experienced after 2004. Nevertheless, it is likely that Poland will experience a new exodus of labour.

This is due both to 'push' factors that encourage people to leave Poland and 'pull' factors that draw these people to Germany. Up till now those working in Germany have tended to be older workers who over time have developed informal networks that have facilitated them finding work in Germany. Younger and often better skilled workers have been more likely to move to Ireland or Britain. From May 1st such people will be free to look for work legally in Germany. Furthermore Germany is an economy that has been relatively unaffected by the global economic crisis, which will be another reason why Poles and other workers from CEE may seek employment there. The situation is certainly much better than that in Britain and Ireland - both suffering from the policies of austerity - and therefore it may also be postulated that Polish migrants in such countries will decide to seek work in Germany instead.

The major 'push' factor in Poland continues to be the extremely high level of unemployment, especially amongst young people. Unemployment amongst those aged under 25 exceeded 23% this year and is predicted to keep rising. Moreover, unemployment amongst young graduates is also continuing to increase. In 2010 unemployment amongst graduates rose by 15% (whilst unemployment in general grew by 3%). Currently over 1/3 of all those unemployed under the age of 27 are graduates from higher education institution. The situation is particuarly difficult for those studying humanities' subjects, with over a half of these graduates believing they have no chance of making a career in Poland.

Young workers in Poland also have to deal with a lack of job security and low pay. Of the 50% of 19 to 27 year olds in Poland who are in paid employment, 37% are on temporary contracts and 30% are employed by commission or through contract work (Umowa zlecenie/umowa o dzieƂo). This means that they have no job security and their social security payments are not paid by the employer. The average monthly salary for these young workers is just 1446pln (€357) a month. You do the math!

Despite this situation the majority of young Poles do not wish to migrate, with only 15-20% stating that they are prepared to leave their place of residence to look for work. The reality of the situation is, however, that Poland could once again see some of its most educated and dynamic workers seek employment elsewhere. The ability to move freely and work in other countries is a human right and brings great benefits to individuals. In many ways Poland has benefited from the outflow of labour since 2004 - after which unemployment fell and money flowed back to the country. The fact that a large section of its population has had the experience of living and working abroad is potentially a huge asset to the country, especially if a section of these people return to Poland. However, the situation on the labour market is not only discouraging a large flow of returnees to Poland but is also threatening a new outflow.

According to the Polish Statistics Agency the Polish population will fall by 3 million by 2030. This is no surprise in a country where the birth rate and immigration are low and emigration is high.

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