Open labour markets in Europe: Opportunity or Threat?

From the 01 May, 2011 on, the Labour market in Europe is open for the East-European member states which joined the EU in 2004: Poland, Hungaria, the Czech Republic, Slovakia, Latvia, Lithuania and Estonia. Hundreds of thousand people are expected to search for better working conditions and higher salaries in the west, especially in Germany.

 From the beginning of the month, the inhabitants of these countries can offer there labour force to employers in all member states of the EU. Largely, in Western European countries there is no minimum wage, making wage dumping very likely. Wages in the new EU countries have indeed already risen significantly since the inclusion in the European Union, but they are still nowhere near German level. Above all, because of the much lower social security and the labor shortage in these countries immigration will rise.

Good times for temporary work agencies which already have agreed co-operations between German and for example polish companies. Of course, well-trained workers needed urgently by German domestic industry to reduce labor costs are coming as well, leading to shortages of qualified workers in their countries of origin. Who then has worked a year in Germany has a right for lifelong social insurance payments by the government. The consequences have long been standard practice: lowering wages, unemployment, welfare cuts and social as well as ethnic conflicts.

There are for sure opportunities for a possible brain drain with highly qualified specialists attracted by the better economical and social situation in the west, but these situation will also lead to a lot of less qualified workers searching for benefits. And with the actual unemployment in Europe, it can be doubted that this can be compensated by the national labour markets.

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7 thoughts on “Open labour markets in Europe: Opportunity or Threat?

  1. In my opinion is open labour market really valuable. Because I think that people can get more oportinuties and realiaze them self in the best way which they choose. It´s really valuable for countries too. They expect various people with special sets, which can use or which they need to use, because it them country is people with this abilities less. It can spirit labour market and support healthy competition, which supports better results and more effort.

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  2. I can understand the worries about an open labour market. I know that it’s not as easy as everyone things to get a job in Germany. Even if you are high-educated you don’t find a job right away since the expactations from employers are very high. Yes, we have, compared to other EU members, a low unemployment rate but this doesn’t mean that it’s easy to find a job and if you found one it could be that you can’t afford the cost of living in Germany. Two or more jobs per person is very common. Yes, we do need high-skilled people and yes I think an open labour market isn’t bad but I also understand the concerns about a possible collapsing of, for example, the social security system. We already have a lot of problems with the retirement pension. It probably will open a lot of new opportunities for Germany but we also should be careful how to treat the system.

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  3. Open labour market creats chances for everybody, so i think that this is what east-european countries need. People would be able to find better jobs and go back and invest in their own country wich will lead to a higher standard and eventually these less rich countries would get their standards high and will be able to compete with the rest, because of the competition the economy will be moveing, this is only good for europe in my opinion.

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  4. Throughout its history the European Union has attracted millions of immigrants or just people who search for a good job. I’m worried about people be used and overwhelmed by the temporary work agencies and that employers will abuse immigrants willing to work “for wage dumping”. Workers Unions also fear that the companies will put off immigrants with low wages of less than five euros. I hope Europe will find a way to protect these new workers.

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  5. I have recently read many predictions of how such an opening of the labour market in the US to continental North America would have a positive effect on the labour market situation in that country. The predictions in Europe seem, in general, to be similar, but it is important to note that there is an important difference between US labour markets and European labor markets: that is, the social safety net, also called the social welfare system, that is in place.

    In the US, the predictions seem for an opening of the labour markets seem positive because it would bring an influx of labour into positions that are deemed “unfavorable” by the native population. It would bring in more taxes, as these positions are generally filled by illegal workers at the moment, which would lead to higher tax revenue to the US government. Because there is no social welfare system to give support, such migrant workers would only bring benefits, rather than leech from the governmental funds. In Europe, though, the situation is different.

    I believe the opening for these labour markets is because of the generally positive outcome if based on the free market system. It would drive competition, wages would rise within the countries loosing many of their citizens to migration, and eventually, even out. However, you must also consider that this will have the opposite effect on those more developed western countries, because, there, the mean wage will be driven down until it is at equilibrium with the entire of Europe, including these lesser developed countries.

    The opening of the labour markets in Europe seems that it will have a positive effect when one considers working conditions within all of the labour market Europe, including these newly included nations, but a negative effect when one only considers those countries that had a open labour market to themselves in the model previous to May 1, 2011, i.e. France, Germany, Spain, etc. It seems we will have to observe to know the true effect of this opening of the labour market to more countries.

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  6. Opening of the labor market, an opportunity for citizens of Eastern Europe. People from the Czech Republic went to work in Western countries, mostly to Germany after program after the fall of communism in 1989. But, mostly illegal and poorly paid work. Just when the market opens, the situation could be improved simply, as the tents of the work of the employees. But there is a risk for Eastern countries. I do not think it’s best when educated people leave work to the west, where the work is much better paid.

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  7. We can see advantages and disadvantages in open labour market in Europe. At first open were borders, then labour market. For, for example, people from Poland it means more place to work, more possibility to earn money if in their country is no that possibility, and for employers it is usually cheaper work force comparing to origin workers. Bed thing in this situation is brain draing – when young people, with education, with skills and knowledge, with a lack of opportunities in their country are going abroad to search chance for develompent, for good work with good salary, better then in their own country. That is bed because exporting country loses human capital which can be in the future and should be future of the nation.

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