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

1. Looking for ultimate flexibility:East-West migration in the EU and labour market uncertainty GuglielmoMeardi ESRC seminar on migrant workers Norwich, 17 June 2010

2. 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

3. 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)

4. Poverty risk by age (Eurostat)

5. 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?

6. 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?

7. 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’

8. 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)

9. 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)

10. 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?

11. Link exit-voice? r = -.7174

12. 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

13. 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) => …

14. Host countries: a new spectre haunting Europe

15. 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

16. 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

17. 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)

18. 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

19. Job losses, 2009: Spain vs UK Note: National Migrants Survey in Spain, but only (migration-underestimating) LFS data in the UK

20. 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’

21. 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)

22. 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