09 Jul

Baltic countries are more alert than Visegrad in the matter of Russia

Although V4 countries are rather partners than rivals for Baltics, there are some differences between both regions, such as in the case of euro, migration, democratic backsliding, security issues and approach towards Russia, said expert from the University of Tartu.

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The acute shortage of labour force in some sectors and regions is forcing the V4 governments, usually hostile towards any migration, to make their administrative procedures for employing foreigners less restrictive. At the same time, the ambition is also to lure back those who have left to study or work in Western Europe - so far with mixed results.

By Aneta Zachová (EURACTIV Czech Republic), Edit Zgut (Political Capital), Zuzana Gabrižová (EURACTIV Slovakia) and Hanna Yukhymenko (EURACTIV Poland)

When the Visegrad group joined the EU in 2004, its citizens expected that the region will catch up with Western living standards rather quickly. However, wages in the region remained lower than in the older EU Member States. Thus, Czech, Hungarian, Polish and Slovak workers, who could suddenly enjoy the benefits of free movement, started to be lured by higher earnings in richer countries such as Germany or Great Britain.

Hundreds of thousands of Hungarians have tried their luck outside their country within the EU since the country’s accession to the bloc. Although the Hungarian Ministry for National Economy estimated the number of Hungarians working abroad to be around 300 000, the Central Statistics Office (KSH) and the economic portal Portfolio, using the data of other EU member states, put the number of Hungarians potentially living in other EU members at over 600 000.

According to these data, most of them live in Germany, but even Denmark houses more than 5 000 Hungarians. This process gained significant strength after 2009, when the deteriorating economic activity in Hungary caused unemployment to climb and it was tough to get a job in numerous sectors and real wages were falling, says Gergely Tardos, analyst at OTP, the largest commercial bank in Hungary.

The reasons for this phenomenon are complex. Among the dominant ones were the fact that German and Austrian labour markets were opened then as well as the changes to the Hungarian social provision system – for example, unemployment benefits were cut and the early retirement scheme was abolished. Tardos thinks that the main motivations for emigration are the wage gap and higher job security.

Workers are coming

Poland was also a country with very high level of emigration. But currently the situation on the Polish labour market is improving and tendency to emigrate is decreasing. According to the report on Labour Migration of Poles published by Work Service, only 8 % of respondents want to leave due to lack of work in the country and 40 % respondents said that good employment situation on the Polish market does not incentivise migration. What is more, 3/4 of Poles absolutely reject the possibility of going to work abroad, which is the highest number in last 4 years.

The Work Service report also shows that Poles most often travel to Germany (31  %), the Netherlands (15 %) and the United Kingdom (6 %). Interestingly, in recent times Great Britain has fallen in this ranking from the second position to the third, which is due to Brexit concerns. Great Britain is also the traditional destination for Slovak workers and there is considerable level of anxiety, too, as to what will be the living and working conditions for Slovaks after Brexit.

Similarly to Poland, Slovakia is also witnessing a change in its labour migration. For the first time since the outbreak of the economic crisis in 2009, more people came to work in Slovakia than have left in 2016. Last year the number was even higher, when 15 000 people came to Slovakia, both native returnees and jobseeking foreigners, analysis based on health insurance companies data show.

Despite these positive figures regarding the labour migration, Slovakia still faces massive outflow of students. According to recent survey among almost 500 university students from 18 universities conducted by Philosophical Faculty at the UPJŠ in Košice, 23.4 % of university students plan to leave Slovakia for more than a year or forever and one in 7 students choose a university in different country. Approximately 14 % of Slovak students studies abroad, one of the highest ratios the EU. Out of them currently more than 20 000 at universities in the Czech Republic. The reason is simple and lies in the quality of tertiary education which is widely believed to be higher there. The flow is natural because of the Czech and Slovak language similarities that allows Slovak students to study in their native language which is accepted by the Czech universities. At the negative side of this mobility are Slovak universities - and country as such - losing the brightest students, resources which leads to further deterioration of quality.

As far as workers are concerned, long-term movers tend to move to Austria rather than Czech Republic. According to the EU study on intra-EU labour mobility published in 2017, those moves show that economic factors might be stronger pull factors than language similarities.

No more workers in the Czech Republic?

Looking at western borders of the V4 region, the Czechs are leaving mostly the regions close to the German borders. The Czech workers are mostly lured not only by higher wages but also by other social benefits such as children’s benefit called kindergeld.  The outflow of young doctors and other health care personal is also a visible trend. The common practise is to study at state universities which are feeless and then move to the West to earn more money.

Nevertheless, the outflow of workers is not a big issue for the Czech Republic, said executive director of the Union of Employers' Associations of the Czech Republic Vít Jásek. According to him the labour emigration is not very high because the wages in the Czech Republic are rising and considering other aspects such as language barrier, traveling and leaving the family, the emigration is losing its attractiveness.

Much bigger issue for the Czech Republic is actually the lack of workers - especially manual workers and qualified experts. That’s why the government tries to attract people from abroad. Apart from initiatives such as matching the labour market requirements with education etc., there is special program that helps Czech businesses to employ job seekers from Ukraine. This so called “Regime Ukraine” was launched in 2016 and in May 2018 its capacity was almost doubled. As Ministry of Labour and Social Affairs informed, similar programme is planned also for Mongolia or Philippines because demand for workers is rising every year.

For Czech employers it would be much easier to employ Czech citizens because they have to provide foreigners with accommodation, language education and food while having no guarantee that the worker will remain in their company in the long-term. Still, the foreign workers are seen as no burden at all, but added value, as pointed out by the executive chief of the Union of Employers' Associations.

Regarding domestic force, demand of the Czech companies could be met by women and low skilled workers engagement in the labour market. Lack of maternity schools in the Czech Republic and not many possibilities of flexible working hours complicate the situation for mothers when trying to return after maternity leave. Relatively high unemployment of low skilled workers is also an issue to be solved – for example by active labour market policies focused on this group.

Ukrainians instead of locals

As far as labour market is concerned, Slovakia shows similarities to the Czech Republic. The unemployment level in Slovakia is at historic low – 5.4 % (May 2018). In absolute numbers, less than 150 thousand people is out of work in a country of 5.5 million inhabitants. Among them circa 40 thousand is out of work for a period longer than 4 years and this number is also decreasing.

Even lower levels of unemployment are recorded in the western regions of the country, where there is actually an acute shortage of labour. The Slovak government was similarly to the Czech forced to make the employment of foreigners from third countries administratively easier.

The Slovak Ministry of Social Affairs, Labour and Family drafted a list of 182 professions that experience an acute shortage of workforce. Apart from technical jobs (automotive, mechanical), they include specialized medical personnel (orthopaedist, surgeons, nurses). In those professions will the procedure for foreigner’s employment be made easier. So far, Slovakia has applied strictest rules governing foreign labour force compared to the rest of the Visegrad region.

Foreigners in Slovakia come mostly from Ukraine, Serbia and Vietnam.

Concerning Ukrainians, largest number work in Poland. According to the organisation of employers in Poland „Pracodawcy RP”, there were 1.2 million of Ukrainians in 2016. Research published on the Personnel Service Report also shows that employees from Ukraine are currently employed in as many as 39 % of large enterprises. The largest number of employees from Ukraine can be found in production (18 %) and services (15 %). Nevertheless, due to the large inflow of foreign workers, it is expected that they will be taking higher positions and appearing in other industries.

As statistics on intra-EU labour migration shows, Poland is the main destination country within the EU countries that entered the EU in 2004. The inflows to Poland doubled since 2009, however, it also has high outflows possibly indicating short-term mobility. The Czech Republic is the second most important country of destination among the new EU Member States, but inflows remained stable since 2009.

Number of foreign workers is growing dynamically also in Hungary despite the fact that the Fidesz government is constantly fighting immigration. More than 10 000 job permits were granted to so-called third country citizens in 2017. The foreign workers quota was not filled up by Hungary, as the country could have granted up to 59 000 job permits. Péter Ákos Bod believes that the government’s policies supporting Hungarian ethnic minorities in neighbouring countries led to strong – but unplanned – labour migration, specifically for people seeking to get a job and even settle in Hungary.

Hungarian companies have tried to recruit employees in Serbia, Ukraine and Romania more or less successfully. In some jobs affected by the skilled worker shortage – such as IT, drivers, construction professionals – Ukrainian and Serbian citizens can work in Hungary even without a job permit. It is problematic that many of them lack the necessary professional qualifications and they are employed illegally in seasonal jobs (agriculture, hospitality). The West’s appeal remains strong: many of the third country citizens with a job permit move on to richer European countries.

“Come home” initiatives

Attracting foreign workers by simplification of the hiring and employing process is common strategy of the V4 countries. But there are also some initiatives aimed at attracting emigrants to return home. Slovak government drafted a plan for a “complex” approach to support possible returnees with a list of measures already taken by various ministries. One of them was a pilot project in the first half of 2018 called “Return to Slovakia” that aimed at high-skilled workers living in the United Kingdom. The director of Institute of financial policy at the Ministry of Finance Lucia Šrámková says that numbers of Slovaks who are returning from Slovakia is on the rise and could be a partial solution for the labour shortage problem.

In the Czech Republic and Poland there are no state initiatives aimed at labour emigrants, but Hungary tried to attract Hungarians working abroad by pilot program called “Come back home”. This campaign was launched in 2015 aiming at people who emigrated to Great Britain and Northern Ireland. The government tried via this project to support resettlement and to find jobs and places to live for Hungarians in the United Kingdom willing to go back home. This programme was funded by 340 000 euros, however, only 105 people came back to Hungary.

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