1 / 31

EMPLOYMENT POLICY, LABOUR MARKET AND FREE MOVEMENT OF WORKERS

March 17, 2006. EMPLOYMENT POLICY, LABOUR MARKET AND FREE MOVEMENT OF WORKERS. Sven Dörge, Damon Craig, Kirby Watkins, Daniel Zeng. OUTLINE. Legal Framework Before and After Enlargement Pros & Cons of Free Labour Migration Sweden Germany Recent Developments.

paytah
Download Presentation

EMPLOYMENT POLICY, LABOUR MARKET AND FREE MOVEMENT OF WORKERS

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. March 17, 2006 EMPLOYMENT POLICY, LABOUR MARKET AND FREE MOVEMENT OF WORKERS Sven Dörge, Damon Craig, Kirby Watkins, Daniel Zeng

  2. OUTLINE • Legal Framework Before and After Enlargement • Pros & Cons of Free Labour Migration • Sweden • Germany • Recent Developments

  3. 1. LEGAL FRAMEWORK BEFORE AND AFTER The Internal Market and the Free Movement of Persons

  4. INTERNAL MARKETS AND THE 4 FREEDOMS • Foundations For Internal Market in 1957 • Implementations Reluctant • Free Movement of Persons, Capital, Services and Goods • Delors Era • White Paper, Single European Act, Maastricht Treaty

  5. RIGHTS • Equal Rights for All Workers From EU Members When Working in Other Member-Countries • Joining Trade Unions and Voting • No Discrimination on Grounds of Nationality • Treatment According to Law in the Hosting Country • Rights Charter, Art. 15.

  6. CONSEQUENCES OF ENLARGEMENT • Enlargement Treaty Allows EU 15 to Restrict Access to Labour Market for Workers From the EU 8  Exception From EU Law • By Means of National Law or Bilateral Treaties • 12 of 15 Opted for Restrictions

  7. 2+3+2 PRINCIPAL • Restrictions Are Limited for Maximum 7 Year (from 1 May 2004) • 1st Period of 2 Years • Consequences Are Evaluated by April 2006 • Sovereign Decision on Extending of Restriction by Each EU 15 State • End of all Restrictions by 2009 Recommended by Treaty • States can prolong by two more years  2011

  8. 4 REGIME TYPES • Different EU 15 Countries Block Access to Labour Market to Different Extents • 4 Regime Types • Full Restriction (i.e. Germany) • Quota Systems • Access to Labour, Closure of Welfare • Full Opened Market (Sweden)

  9. 2. PROS AND CONS OF FREE LABOUR MOVEMENT Examining the Many Considerations Between Old and New EU Member States With Regard to Labour Migration

  10. FEAR OF WESTWARD MIGRATION FROM EASTERN MEMBER STATES • Cheap Labor • Already High Unemployment Levels • Welfare Tourism • Currently Only 1.5% of Total Work Force Are Employed In Other EU Member States • Geographical Proximity to New Members Causes Greater Concern

  11. EASTERN CONCERNS • EU 8 Countries Want Equal Rights Regardless of Actual Interest In Migration • More Non EU Citizens Work in EU 15 Countries Than EU 8 Citizens • Brain Drain • Youth Drain

  12. INDIVIDUAL CONCERNS • Language Barriers • Recognition of Professional Qualifications • Knowledge of Rights and Laws Abroad • Psychological Effects of Culture Shock • Distance From Families

  13. FILLING THE PROJECTED LABOR GAP • Low Birthrate • Rising Life Expectancy • So Far Eastern Workers Take Positions Otherwise Hard to Fill • Denying Legal Entry Increases the Size of Black Market Labour

  14. RESTRICTING NEW STATES • With ascension of new states such as Bulgaria and Romania, EU8 countries may impose similar restrictions. • What is Considered Eastern Shifts as Enlargement Continues • Potential Restrictions on Bulgaria From Czech Republic

  15. 3. SWEDEN Third of three countries to open its labour market to citizens of EU-8. Only country of EU-15 to not restrict access to social services for citizens of EU-8. In order to qualify for welfare benefits new workers must work only 10 hours per week. By law workers can not work more than 40 hrs/week.

  16. SWEDISH STATISTICS BEFORE ENLARGEMENT • Like many industrialized nations, had a low birth rate. However unlike other industrialized nations, the Swedish birth rate had been rising since the early 1980s • Prior to EU enlargement immigration from other Scandinavian countries accounted for 40% of population growth. • Labour force numbered about 4 million. • Recession in early 90’s saw real wages fall, growing unemployment, and 4% drop in GDP.

  17. CONCERNS BEFORE ENLARGEMENT • The generous Swedish social security program would attract “benefit shoppers” interested mainly in exploiting the program. • An increase in migrant workers would lower overall wages and increase unemployment. • Social Democrat government proposed restrictions on immigrant labor from EU-8, exemplified by keeping Sweden’s “work permit scheme.”

  18. WERE THESE FEARS PROVED ACCURATE? • Sweden’s imbalance rate (unemployment+ those in labour market programs) is 7.6% (May 2005). This is an increase of .6% over May 2004. • At the time of these figures (May 2005) the imbalance rate was decreasing on a monthly basis. • The long term unemployment figure also decreased by 7.500 persons and the number of job vacancies increased by 8.000 during the same period (May 2004-May 2005).

  19. WERE THESE FEARS PROVED ACCURATE (CONT) • Real wages did not decrease over this period. • Around 22.000 immigrants from the EU-8 have arrived in Sweden. This represents a tiny portion of its total labour force of 4.5 million, suggesting that there has not been any “welfare tourism.” • First time permits (for more than three months of work) numbered only 8768 for the period 1 May 2004-31 Dec 2005.

  20. CONSEQUENCES • Sweden has become increasingly concerned with foreign companies paying their workers in Sweden a ‘fair wage’ (Vaxholm Affair). • New immigrants are sometimes unaware of rights and responsibilities in Sweden, this problem is further exacerbated by firms’ willingness to circumvent Swedish laws i.e. taxes, environmental laws. • Assimilation and Integration i.e. Language Barriers

  21. GERMANY: BEFORE EASTERN ENLARGEMENT • General Problems Concerning German Labour Market: • High Unemployment (12 % in 2/2006) • High Non-wage Labour Costs • Low Birth Rate (age structure) • High State Expenses (subventions, welfare system)

  22. GERMANY: BEFORE EASTERN ENLARGEMENT • Reaction: National Reform Project “Agenda 2010”, Started in 2003. (For EU: Lisbon 2000, 2005 Revised) • Development of national labour market as one point. • Goal: More employment through more mobility and flexibility. (Expanding sector of low qualification work, forcing unemployed to take any work etc.)

  23. GERMANY: BEFORE EASTERN ENLARGEMENT • Fears: • Cheap workers coming to Germany. (Especially to eastern regions with already high [long-term] unemployment.) • ‘Welfare Tourism’ • Increased Criminality (Populism) • Reduced subventions for economically underdeveloped east German regions. • Relocation of specific sectors out of Germany. • Higher chance of immigration compared to Sweden.

  24. GERMANY: BEFORE EASTERN ENLARGEMENT • Benefits: • Projected Need of Workers From 2010 (Immigration to Compensate National Age Structure) • Cheap labour helps in overall economic competition. (stimulation) • Easier Access to Eastern Markets – Good for Export Country (and thus employment) like Germany; Need for New Equipment Through Transformation Process

  25. GERMANY: BEFORE EASTERN ENLARGEMENT Historical Analogy: • 1986 EU Southern Enlargement • 7 years of restriction for workers from Portugal and Spain. • Feared immigration did not take place.

  26. GERMANY: BEFORE EASTERN ENLARGEMENT • Germany is one of the countries that applied restrictions for EU-8. • Classified as “Restrictive” (EU-8 treated like non-EEA) • Group also consists of Belgium, Finland, Greece, France, Luxembourg, Spain

  27. GERMANY: AFTER EASTERN ENLARGEMENT Development after the first 2 years of enlargement: - Germany extended the restrictions for at least another 3 years. • Some countries of this group consider dropping the restrictions.

  28. 5. RECENT DEVELOPMENT • Several States Announced That They Will Lift Restrictions by May 2006 (P, E, SF) • EU 8 Exercises Pressure Against Restrictions • GER + AUT Will Keep Restrictions After 2006

  29. THANK YOU FOR YOUR ATTENTION Any Questions?

  30. SOURCES • www.fafo.no/Oestforum/Kunnskapsbase/Publikasjoner/FoU/dolvik_eldring_eng_feb06.pdf • www.etuc.org/a/1992 • http://www.workpermit.com/news/2004_02_27/eu/working_restrictions.htm • http://www.migrationinformation.org/Feature/display.cfm?id=274 • http://www.workpermit.com/news/2004_04_29/sweden/opens_market_for_new_eu_workers.htm • http://www.scb.se/templates/Standard____130877.asp • http://europa.eu.int/comm/employment_social/social_model/index_en.html#intro • The Economist, European migration: The brain-drain cycle, December 10th 2005 • EurActiv, Member states ponder lifting labour market restrictions, January 24th 2006 • EurActiv, Feared labour exodus from the East a no-show, August 31st 2005 • EurActiv, Prague threatens labour restrictions on Bulgaria and Romania, December 16th 2006 • EurActiv, Germany will not lift labour movement restrictions for EU-10, November 4th 2005 • http://www.bundesregierung.de • http://www.destatis.de

More Related