Labor migration benefits both new and old members of the European Union. The Baltic states are demonstrating economic growth, rising wages, and declining unemployment. Western European countries with the most liberal migration policies are also leaders in economic growth. Scandinavia, Great Britain, and Ireland have not been overwhelmed by the influx of Eastern European immigrants; their contribution to EU population growth is only 0.2%. Nevertheless, as Expert notes, most old EU members do not want further liberalization of migration policy, insisting on extending existing national restrictions.
Rules and Exceptions
One of the fundamental principles underlying the creation of the European Union is the so-called four freedoms—free movement of goods, services, capital, and labor. On May 1, 2004, ten new members joined the old 15 EU members, resulting in an increase in the EU population by as much as 75 million people. The absence of visa restrictions on the movement of citizens within the European Union did not automatically grant the right to seek work in any country. This was mainly because the standard of living in the Eastern European eight (Estonia, Latvia, Lithuania, Poland, Czech Republic, Slovakia, Hungary, and Slovenia – hereinafter EU-8) significantly lagged behind that of Western Europe. For example, hourly wages in Estonia are five times lower than in Finland, and the average salary in Denmark exceeds that of Lithuania by eight times. Two years after enlargement, the GDP per capita of EU-8 states still amounts to about half of the EU average. Poland, with its nearly 40 million population, caused and continues to cause particular concern.
To avoid an uncontrolled situation in the single labor market, a transitional seven-year period was provided for the EU-8, during which old members could impose temporary migration restrictions. These seven years were divided into three periods (2+3+2 years), after each of which Western European countries could introduce measures for further liberalization of national rules or, conversely, tighten migration policy.
During the first two years after enlargement, the policies of old members regarding labor migrants from the EU-8 varied considerably: the United Kingdom, Ireland, and Sweden liberalized their migration legislation, while Germany and Austria imposed very strict restrictions. Countries that are part of the European Economic Area agreement (besides EU countries, the EEA includes Norway, Iceland, and Liechtenstein) also had to determine the rules for admitting EU-8 citizens to their labor markets.
Potential and Reality
For migrants from the EU-8, the desire to find work abroad was driven not only by the chase for the 'long euro' but also by escaping unemployment. In Poland and the Baltic states, unemployment levels still significantly exceed the European average. While in the Baltic states the unemployment rate is 8-10%, in Norway it does not exceed 3.5%.
The choice of country for a potential migrant is determined by the strictness of migration policy, as well as geographic, cultural, and linguistic proximity. Thus, most migrants from Estonia (over 30%) prefer to seek employment in neighboring Finland. Between 1995 and 2004, about 9,000 Estonians moved to Finland for permanent residence, and the Estonian diaspora in the land of Suomi grew to 14,000 people. The presence of acquaintances and compatriots in a foreign country facilitates the decision to move; conversely, restraining factors include the presence of family and relatives at home, language barriers, moving costs, and lack of information.
The emigration potential in the Baltic states is quite high: studies conducted in Lithuania in 1999 showed that 2.5% of Lithuanian citizens planned to go abroad for work within the next three years. In 2002-2004, the number of those wishing to go abroad for earnings was 1.6% of the country's total working-age population. In 2003, 3.1% of all Estonians aged 15-64 wanted to move abroad permanently; in 2004, 5.4% of Estonian doctors and nurses had definite plans for employment in Western European countries.
Estonian sociologists have compiled a portrait of a potential migrant. Half of those wishing to leave are people aged 15-29, of whom 41% are women. Those with higher education (37%) are less interested in migration than those with secondary and specialized secondary education (43%). Among those wishing to leave, Estonians are a minority—40% compared to 45% of non-Estonian population.
Contrary to fears, the EU countries that opened their doors to labor migration from Eastern Europe did not face a massive influx of newcomers. Today, the share of migrants from the EU-8 is about 0.2% of the population of the old EU members. For comparison, the total percentage of immigrant population in Western European EU countries is 5.1%. A migrant from Eastern Europe in most cases comes for a limited period; the average stay of a worker from the EU-8 in the West ranges from one to one and a half years. Surveys show that for 75% of Estonians wishing to go abroad, temporary work for a few months is preferable. Typically, a typical Eastern European labor migrant leaves his family at home.
Pardon my French
A significant number of migrants from the Baltics preferred the United Kingdom and Ireland. The choice is determined by the relatively liberal employment policies of these countries, the language factor, and the sharp reduction in air travel costs. EU-8 citizens gained the opportunity for free employment in foggy Albion from May 1, 2004. Over 375,000 people took advantage of this right, which is about 0.85% of the total workforce.
Most of the arrivals are men aged 18 to 34, predominantly Poles, with the next largest group of workers coming from Lithuania. Only a small portion of them receives social assistance. According to the latest reports, the contribution of labor migrants to the country's economy over the past year amounted to approximately €750 million. The United Kingdom still has about 500,000 vacant jobs requiring strenuous physical labor, and it is here that the main flow of foreign labor is directed. Polish electricians, carpenters, and masons, as well as Latvian maids and waitresses, have filled most of the vacancies, but it would be wrong to speak exclusively of low-skilled workers. The United Kingdom suffers from a shortage of medical personnel and imports them from the EU-8; in Warsaw, for example, there is even a special educational institution that supplies dentists to the English labor market.
Ireland also immediately opened its labor market to the new EU members. This country has a very low unemployment rate and one of the highest economic growth rates in the European Union. Eastern European citizens have been employed in Ireland since 1999; the country leads in the number of foreign workers per capita. Ireland's population is 4 million, and about 40,000 Poles work there, most of them in construction. Many experts consider Ireland to have the most successful migration policy: employment and wage levels are rising. In 2005, the average wage level increased by 7%.
The negative results of the referendum on the new EU constitution in France in 2005 were largely explained by the fear of further globalization and the associated rise in immigration. Opponents of the new constitution quite successfully used the scarecrow of the 'Polish plumber' taking jobs away from native inhabitants and being a vehicle of social dumping. France did not become a significant center of attraction for workers from Eastern Europe, largely also due to language problems, and the number of migrants from the new EU countries is insignificant here. Nevertheless, unemployment remains huge and 2.5 million French people are without work.
Norwegian Leadership
The Scandinavian labor market is one of the most attractive for citizens of the EU-8, especially those from the Baltic states and Poland. In the period from May 1 to August 31, 2005, work permits were issued to 4,047 workers from the EU-8 in Denmark. According to data from Statistics Denmark, the number of employed in 2004 was 2,706,434, thus the Eastern European 'contribution' to the labor market did not exceed 0.15%. By the end of August 2005, half (50.7%) of the workers were employed in agriculture, horticulture, and forestry, followed at a large distance by the construction sector (7.1%). The share of migrants working in agriculture reached 5% of all agricultural workers in Denmark.
92% of all work permits issued by the Danish authorities to citizens of the EU-8 went to Poland and the Baltic states: Poland's share was 46%, Lithuania 33%, Latvia 10%, Estonia 3.3%. The fact that labor migrants from Lithuania are so widely represented on the Danish labor market is explained by long-term cooperation in the field of agriculture, which began immediately after Lithuania gained independence in 1991.
Among the Nordic countries, the most migrants work in Norway, despite the fact that its labor market is about half the size of Sweden's and its migration laws are less liberal. From May 2004 to August 2005, Norway accepted 13,701 migrants from the EU-8, which was 47% of their total number in the Scandinavian countries and Finland. According to the latest data, since May 1, 2004, Norway has issued over 36,000 work permits to EU-8 citizens, and an additional 21,500 permits have been extended. The country granted the right to work to almost as many citizens as Denmark, Sweden, and Finland combined.
What Next?
In May 2006, the first two years of the EU-8 countries' presence in 'greater Europe' expired. The old EU countries did not undertake any significant liberalization of migration legislation. One can only note that stateless persons living in Estonia and Latvia (mostly Russian-speaking population) received the same rights as citizens of these countries as of January 1, 2007. But setting up enterprises and offering their services as labor within the EU still involves overcoming many national rules and regulations. An earlier, radical draft law by the European Commission aimed at solving this problem was shelved.
Stubborn figures show that the best economic growth with minimal unemployment was achieved by countries pursuing the most liberal migration policy – the United Kingdom, Ireland, Sweden. Recent studies suggest that the migration potential in EU countries will not exceed 1% of the working-age population. At the same time, the labor market in Western European countries is affected by factors that do not contribute to increasing welfare: working hours are decreasing, the duration of education is increasing, and life expectancy is rising. Today, one Norwegian pensioner is supported by 4.6 workers, and by 2040 this figure will drop to 2.8. It is not yet clear how to resolve these contradictions without liberalizing migration.
Nevertheless, the United Kingdom and Ireland decided not to open their labor markets to the newly minted EU citizens – citizens of Romania and Bulgaria. The Polish plumber and the Latvian waitress became not so much a problem as a political symbol for opponents of globalization.