Migration from CEE - Chances and Risks

Abstract....................................................................................................................................... 2 The clash between Economical and Political Perspectives ........................................................ 3 The Risks of Migration............................................................................................................... 4 Chances from European Enlargement: The creation of a fluid employment market................. 7

Standards of Minimum Wages ................................................................................................... 8 Freedom to move: decentralized public and private employment centers ................................. 8

Conclusion.................................................................................................................................. 9 Literature .................................................................................................................................. 10

Abs tract

The debate on movement of people (migration) ranges, 10 days after the probably most important historical moment of European history in the 21 ^st century, from positive to pessimistic.

Migration undoubtedly presented a excellent opportunity for advancing human welfare, but some clashes resulting from economical, historical or political failures made weighing its costs and benefits very difficult: effects that look like “benefits” from a liberal economic point of view became “costs” when viewed from politics and with emotion in mind.

First, the author will focus on major economic and political questions and perspectives that are currently clashing eachother in public debates. ² In fact the current debate on European Enlargement started already a couple of decades ago when people and populations moved throughout Europe from South-East Europe and Northern Africa to wealthy countries, such as Germany, France, UK or Scandinavia. ³ Today, critics of EU enlargement mainly focus their arguments on the changes, problems and things that went wrong through immigration or due to false migration policy. 4

² Should Turkey, Romania, Bulgaria, Croatia, or even Ukraine join the European Union in the future ? What is going to happen to people outside the European Union + other CEE that will look for job opportunities in our host countries ?

³ - With the result that some immigrants did not find a job, did not actively integrate themselves into their new local community or did not get integrated due to many reasons.

⁴ - Nevertheless debates about jobmarket problems resulting from (current and future) European Enlargement should not mixed up with integration problems resulting with immigrants from Non - EU countries.

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Looking back and asking why and how migration policy could go wrong, focusing on the ‘jobmarket’, the author draws the conclusion that it is a question of balance, and of matching skills and needs of an economy. Societies allowing migration, more behavioral variety and ensuring equal equality of opportunity experience a more dynamic consumer behavior than otherwise. ⁵ The Economics published on May 6 ^th , 2004 some important thoughts & ideas from Philip Martin of the University of California which will be presented in the following.

Finally, the author closes with the two following recommendations for the future, regarding successful migration and coming employment market tasks:

- The major hurdle for the successful integration of the ‘New European Citizens’ will be the creation of a fluid employment market where workers are free to follow jobs.Vice Versa skilled professionals from the European Union must have the opportunity to work in successful developing countries, regulated by decentralized public and private employment centers.

- Social and economic standards in order to be able to install an equal and fluid employment market are requirements in a fully enlarged European Union: Especially the foundation of social welfare standards as well as European standards of minimum wages throughout the European Union.

European policy must find a way to implement these two considerations in future migration policy and EU enlargment developments.

The clash between Economical and Political Perspectives

From an economic perspective the migration of workers from poor countries to rich countries (no matter if we are talking of new member countries of the European Union or Non - EU countries) would be a principal channel of material progress.

In countries such as Germany, Switzerland or Austria industries, such as the manufacturing industry or the construction industry in the 70ies and 80ies, needed additional workforce due

⁵ Reinstaller, Andreas, Sanditov, Bulat , 2003: Social norms and equality of opportunity in conspicuous consumption MERIT Research Memorandum No. 2003-14, University of Maastricht.

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to the fa ct that there was not enough labor force covering the existing demand for workforce. ⁶ The economic logic is clear, providing an industrialised economy with cheap labor force (assuming a stable or growing demand), regardless of nationality, drives economic growth and overall the welfare of each individual. Immigrants that were encouraged to work in such economies were being fully integrated and given equal rights. 7

From a political point of view, the crux of the matter became that over a long term perspective some immigrants (as native citizens) did not want / or could not integrate themselves any longer. Some were encouraged not to work any longer for low prices and rather become unemployed in order to benefit from the social welfare system. Unfortunately, migration aroused great political controversy, especially in France, Italy or the UK in the 90ies, where citizens started accusing immigrants of 2 ^nd or 3 ^rd generation, without jobs, of being opportunistic net recipients of social welfare.

The Risks of Migration

Just recently the Economist published an article regarding the interdependence between migration and development: The article resulted from the Copenhagen Consensus project, organised by Denmark's Environmental Assessment Institute with the co-operation of The Economist, which aimed to show proposals for advancing global welfare :

The author explained that the welfare economics of migration was a straightforward thing. “If people were goods, the solution to different wage and employment levels would be obvious: encourage the transfer of ‘surplus’ people from poorer to richer nation states, which should benefit individuals whose incomes rise, increase global GDP, and promote convergence in wages and opportunities between sending and receiving areas that eventually reduces migration pressures.” 8

⁶ - some own citizens were not willing to work in these industries for the amount of money paid in that particular industry / might also result from too high labor costs or high social welfare standards

⁷ From an overall perspective, certainly political systems with no social integration plans for immigrants had difficulties in the last couple of years (i.e. France, UK), but there are other host countries that faced the problems and could handle the changes, in some way or the other, in order to benefit (i.e. Germany, Austria).

⁸ Migration is one of the development challenges under review as part of the Copenhagen Consensus project. A new paper on the subject, commissioned from Philip Martin of the University of California, Davis, has been published early May 2004 from which the statement comes from.

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