Germany hopes to hear ‘Giant sucking sound’

RIGA - Germany and Austria put off opening their borders to eastern European workers until the last possible minute, May 1, but some now fear a golden opportunity has already been missed, reports AFP. The liberalization applies to the eight countries slapped with restrictions after the “big bang” enlargement: Poland, Hungary, Slovenia, the Czech Republic, Estonia, Lithuania, Latvia and Slovakia.

The 2004 “big bang” enlargement of the European Union brought in ten new member states. But while the rest of the bloc sooner or later welcomed the new arrivals, often as sources of cheaper labor, Germany and Austria were the sole countries to wait the maximum seven years to allow in their neighbors to find work because they feared their job markets being swamped.

As a result, many Poles, Czechs and Hungarians are in no hurry to rush in because they have already had ample time to try their luck in the West, said Klaus Zimmermann, head of the Institute for the Study of Labor in the western German city of Bonn.

Polish Labor Minister Jolanta Fedak said that Warsaw “does not expect an exodus,” a prediction shared by her counterparts in Budapest, Ljubljana and Prague. One immediate effect of the changes in Germany and Austria will be a legalization of the legions employed until now illegally there.

Joachim Moeller, director of the IAB research institute at Germany’s Federal Labor Agency, said it was difficult to estimate how many Eastern Europeans were now working off the books. But he said that he expected between 100,000 and 140,000 new arrivals each year in the short term, with a drop-off expected after that.
In the same period, the government estimates 200,000 German employees will leave the labor market annually.
In Austria, the Labor Ministry is counting on between 40,000 and 50,000 people in the next two years. “It was other countries - Britain, Ireland - which benefited from the first-mover advantage,” Moeller said.

Subsequent economic troubles, particularly in Ireland, may see Eastern European workers boomerang back closer to home, as Germany enjoys a robust recovery and relatively low unemployment. “But young people tend to speak more and more English and less and less German,” Moeller said, citing a powerful barrier to the labor market.
Some say Germany may have missed the boat in replenishing its workforce, which is desperate for manpower, particularly skilled professionals. “It was a mistake to maintain the restrictions until the last minute,” said Bertram Brossardt, head of the Bavarian Business Association in southern Germany. “Those who were looking for work already left in recent years for countries that opened their doors to them, and the economic situation in the new member states has improved to the point that many aren’t that interested in going abroad.”

His region is among those that, due to a healthy economy and an ageing population, are crying out for workers to fill jobs. Bavaria hopes to profit from the opening of the labor market to plug such holes and has launched an online recruitment program in the newer EU member states to lure engineers and specialized technicians.
However, some of the countries being wooed are wary. “What is dangerous is the fact that the Germans are preparing plans which could encourage our young people, from the time they complete their professional training, to go work in Germany,” Polish minister Fedak complained, warning of a “brain drain.”

Meanwhile, in Germany itself, the fears are taking a different shape. “We are concerned that working conditions and salaries are going to face downward pressure,” a deputy from the Social Democrats, Josip Juratovic, said. Juratovic is himself the first member of the German parliament of Croatian descent and a former assembly-line worker.
The adoption of a minimum wage for temporary jobs, which is in the works in Germany, is aimed at nipping the problem in the bud. Austria has also passed legislation against wage dumping. But there will be a “period of adjustment” in certain sectors where the need for workers is the most desperate, such as healthcare, Zimmermann predicts - an economist’s euphemism for keeping labor costs low in certain key fields.