Three remarks about emigration in Baltics

I think labour emigration from Eastern Europe to West Europe is a natural cause of actions. Although salaries are rising in East, the wage gap is huge and living standard is tempting in West. According to the academic researches (Mandsoor, Quillin, 2006) on average wage cap between 30 to 40 percent is necessary, but not sufficient to change the sign of net migration. Jet in the year 2007 GDP per capita PPP in the Baltic States formed 50 to 60 percent of Sweden’s or UK`s income level. That is one of the explanations for ongoing process of emigration in Baltics. Secondly foreign investors complain over lack of labour is due to the unwillingness to invest into new technologies or using new working methods. For example, huge company producing electronic equipment is closing its branch in Estonia due to the rising labour costs; workers were paid a minimal wage, in the same time the average wage growth in Estonia was 20%. I think high-skilled labour force in Eastern-Europe is more productive and more valued in west. Thirdly, it is not wise to freeze wage level by governments struggling with lack of labour. Interference in integration and convergence might induce emigration even more.

 

Labor Force Leaving Eastern Europe

I know that we already have some posts about migration in Europe, but I have found another interesting article about the labour force from Eastern Europe leaving the home countries and going to work abroad…Everybody is talking about how the economic situation and living conditions are improving and also new jobs are being created, salaries are rising but in spite of this there are still many people looking for better opporunities in western Europe. In the wake of the departures of the workers are huge labor shortages. For example Slovakia has created an excellent environment for car manufacturing and capacity has increased, but now automobile companies such as Volkswagen and Kia Motors have been unable to find enough skilled workers to assemble the vehicles. Poland and the Baltic states have been unable to meet housing demands due to too few workers. Things are so bad in Poland that President Lech Kaczynski has complained of being unable to find someone to paint his house because all the painters have moved away. After the entry to EU there are not so many restrictions for immigrants from central and eastern Europe to join the labour market in UK or Scandinavian countries. Now the governments are trying to do some measures to fill the gaps, but are stil reluctant to increase wages because it may degrade their attractiveness to foreign investments. Here is the article.

 

 

Migration – good for recipient and sending countries?

According to the World Bank in year 2000 36% of migrants in 20th richest countries were highly skilled. Do sending and receiving countries benefit or suffer from high-skilled migration? Without immigrants, ageing societies with low natural birthrate would have to cope with economic slowdown. Especially economies in America and Europe with increasing demand for high-skilled workers and in need for people willing to do hard and unpleasant jobs. Not enough young natives have the right skills or motivation, so the rich must hope that outsiders will keep coming. And they will as long as such wealth differentials persist, the draw will continue. It is more complicated issue in sending countries. Poorer countries could benefit from emigration in general till the natural birthrate is higher than emigration rate, then emigration could lead to lower poverty and higher wage level (examples Belize, El Salvador, Guyana, Jamaica). Although remittances and new skills are claimed to be beneficial there is no guarantee emigrants will return. Exporting better brains will harm sending economy in long term. Poor and middle-income countries in North-Africa, Pacific and Caribbean region face shortages of skilled workforce, well qualified workforce will emigrate leaving most critical jobs unfilled at home, so there hardly will be potential for economic catch up.See more Economist.com