Free movement of EU10 workers: the story so far

The opening up of (some) European borders to workers from new Central and East European EU members has helped to fill skills gaps but has not cost domestic workers their jobs, according to the European Commission's first report on the so-called 'Polish plumber' problem - that is, the transitional arrangements for workers from the new EU member states that took effect in May 2004.

The Report on the Functioning of the Transitional Arrangements set out in the 2003 Accession Treaty (PDF) found that "for the EU as a whole, flows of workers have been rather limited". Nonethgeless, there was "an overall positive message". The emphasis is from the original document:

The statistical analysis of the national data received and used for this report permits the following conclusions:
- Mobility flows between the EU10 and the EU15 are very limited and are simply not large enough to affect the EU labour market in general. In addition, mobility flows from EU15 to EU10 Member States and between EU10 Member States are generally negligible (see table A1).
- The percentage of EU10 nationals in the resident population of each EU15 Member State was relatively stable before and after enlargement, with increases in the UK and, more conspicuously, in Austria and in Ireland25. In Austria, however, there is evidence to suggest that the stock of EU8 nationals stabilised in 2005.
- There is no evidence to show a direct link between the magnitude of mobility flows from EU10 Member States and the TA in place. Ultimately, mobility flows are driven by factors related to supply and demand conditions. If anything, TA will only delay labour market adjustments, with the risk of creating "biased" destination patterns even on a more permanent basis.
- The employment rate of EU10 nationals in EU15 Member States is similar to that of country nationals, and it is even higher in Ireland, Spain and the UK.
- The migration flows following the enlargement have had positive effects on the economies of the EU15 Member States: EU10 nationals positively contribute to the overall labour market performance, to sustained economic growth and to better public finances.
- This employment rate has increased in several countries since enlargement. Enlargement has helped to formalise the underground economy constituted by previously undocumented workers from the EU10, with well-known beneficial effects, such as greater compliance with legally sanctioned labour standards, improved social cohesion and higher State income from tax and social security contributions. This also improves the integration of EU10 nationals due to a change in employers' attitudes, greater opportunities to set up private businesses, better information and regulation.
- The sectoral composition of the EU15 national workforce has not shown significant changes since enlargement showing no evidence of crowding out of national workers by the limited inflow of workers from EU10 Member States. EU 10 nationals have a complementary role to play.
- EU10 nationals alleviate skills bottlenecks in the EU15 Member States and contribute to long-term growth through human capital accumulation.

Countries that have not applied restrictions after May 2004 (UK, Ireland and Sweden) "have experienced high economic growth, a drop of unemployment and a rise of employment". According to Nicholas Watts in today's Guardian, the Commission wnats other EU countries to follow their example:

France, Germany and other members of "Old Europe" were urged yesterday to throw open their borders to migrant workers as figures showed that east European workers were contributing to high economic growth.

The European commission called on Berlin and Paris to follow the example of Britain, Ireland and Sweden, which granted free movement to workers from the new members of the EU.

Vladimir Spidla, the former Czech prime minister, who is now the European employment commissioner, said: "Free movement of workers is economically rational and is enshrined in EU treaties. We have not seen any catastrophic tendencies since enlargement."

Comments

[Gordon McNeil]

Nonethgeless, there was "an overall positive message"........

................. always use a spellchecker !

Best

[Dene]

HI guys, I'm doing my dissertation based on the argument that the scope free movement of workers is too wide, as in the term worker extended to work-seekers {without definition on the time to seek employment} and workers families, of both EU and non-EU nationals.
Would you agree with the above statement, or do you believe that the scope is too limited.
I would love to hear your thoughts.
thanks.

[Arthur Eckart]

Dene, labor mobility helps keep supply and demand in equilibrium. The link I posted earlier (and below) shows there's a labor shortage in Rocky Mountain states. So, labor flows from other states or wages in those Rocky Mountain states may rise, or some other force or set of forces will reduce the disequilibrium. Geography makes it easier to immigrate. It's easier to
immigrate from Mexico to California than from South America to Florida. It's also cheaper to bring families to the U.S. from Mexico than from countries farther away (and cheaper to deport illegal immigrants). Transportation costs, language barriers, cultural and legal factors, etc. reduce the free flow of labor. There seems to be more labor immobility in the E.U. than in the U.S., because the E.U. economy is less dynamic. However, it's harder to lose a job in the E.U. So, Europeans may be more likely to move closer to work, which is more efficient and may increase leisure. Of course, the best job for a particular individual may not
necessarily be close to home. There's a trade-off between work and family.

http://biz.yahoo.com/ap/070825/western_workers.html?.v=8

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