As the final EU state to open its labour market, a mixture of pessimism and hope abounds, writes DEREK SCALLY, Berlin Correspondent
FOR BUSINESS owners in the eastern German town of Marienberg, near the Czech border, Sunday, May 1st, means one thing: bye bye bureaucracy.
EU enlargement in 2004 brought a new wave of Czech shoppers across the border – but Germany’s labour market lockdown hobbled Marienbergers’ best efforts to serve them. While Ireland, Sweden and Britain welcomed all EU workers, Germany headed a more cautious club that took full advantage of a seven-year labour market “transitionary period”.
Now the waiting is over and, according to a recent survey, some 40 per cent of Germans remain pessimistic about what May 1st means for their jobs.
Marienberg shop-owner Wolfgang Ehnert says that, along Germany’s eastern border, people are pragmatic enough to sense the opportunity at hand.
“Of course it’s natural that people think their job will be taken but, to be honest, if it weren’t for Czech customers, we would have far fewer jobs here,” says Mr Ehnert, who is looking forward to hiring more Czech-speaking staff for his sports store.
Back in 2004, Germany was gripped by recession and Berlin adopted a “transitionary period” of up to seven years, worried a flood of low-wage workers from the east would make the dire labour market situation worse.
The new EU accession member states felt snubbed by Berlin’s cold shoulder but, rather than wait around sulking, millions of young workers boarded budget airlines to find their luck in more hospitable climes.
Now, in 2011, Germany’s economy is booming, unemployment is at its lowest rate since unification and Germany, along with Austria, will on Monday become the last EU member state to open its labour market.
These days Berlin has a different worry: that it waited too long and may not attract enough of the skilled migrant workers it needs to fill growing gaps in its labour market.
“We’re not running out of jobs, we’re running out of workers,” said federal labour minister Ursula von der Leyen. She has tried to play down job and wage fears of German voters, saying the seven-year transitory period has allowed time for wages in Poland to rise and the German economy to recover.
“People who wanted cheap, black market work are already here,” said Dr von der Leyen. “Now we’re expecting good, well-qualified people who want work.”
Her expectations may be overly optimistic, with some analysts suggesting the well-trained engineers and IT specialists settled in Dublin and London rather than waiting for Berlin to open its doors.
Although Germany has its attractions, it has much to put off potential arrivals, too, in particular complicated regulations on the recognition of foreign qualifications that vary from one federal state to the next.
“Most graduates in the new EU member states speak English not German and are thus more difficult to integrate into the labour market here,” said Prof Herbert Brückler of the Institute for Labour Market and Career Research (IAB).
“Many German companies complain about the labour market shortage but [you] don’t see them trying to hire in a targeted way as other countries do.”
Opening the labour market has prompted much hand-wringing in Germany but the fact is no one knows exactly what will happen after Sunday. An EU-wide survey from 2009 suggested that 23 per cent of central and eastern European citizens – about 12 million people – could imagine working in member states further west.
Based on these figures, the Institute of the German Economy forecasts some 800,000 labour immigrants arriving in Germany in the next two years. After that initial spike, forecast net immigration will slow to an annual average of 120,000, totalling 1.2 million by 2020.
This generous estimate sounds like a flood but is little more than a trickle considering, in the same period, Germany’s ageing population is expected to shrink by about 900,000.
German economists agree that opening the labour market could dampen the effects of a rapidly ageing population while giving Europe’s largest economy a shot in the arm.
“People’s worries about falling wages or growing unemployment are understandable but the fact is the market will adjust,” said labour market expert Prof Herbert Brücker. “More will be invested, the economy will grow and, as a result, the migration will have a neutral effect.”
Not everyone waited for Berlin to act: some 425,000 new EU citizens have moved to Germany since 2004, three-quarters of whom are Poles. The new arrivals have been able to work around the labour market restrictions, either by registering as self-employed or by earning €64,000 or more annually.
The Polish government has played down the significance of May 1st. “Poles know the European market already; we are not expecting an exodus,” said labour minister Jolanta Fedak.
So where are all the forecast new arrivals going to come from? Bulgarians and Romanians have another three years to wait.
One theory is that Poles working illegally in Germany will regularise their situation; another is that Poles will return from Britain and Ireland to work in Germany, a train-ride from home.
Not everyone is cheering. German unions have warned that, in the absence of a statutory minimum wage, the potential still exists for foreign workers to drive down wages in Germany.
Labour minister Ms von der Leyen rejects claims of wage-dumping, confident she has done enough by extending industry-specific minimum pay rates to cover temporary and agency work. From next week, employment agencies will have to pay their staff a minimum of €7.79.
In neighbouring Austria, the populist, far-right Freedom Party (FPÖ) has made hay from the May 1st labour market opening.
“This is going to lead to massive aggravation and a process of displacement on the labour market,” said leader Heinz-Christian Strache.
That appeals to the 45 per cent of Austrians who, in a poll last month, said they expected May 1st to trigger a run on jobs. Austrian economists dismiss the FPÖ’s fears, while the government in Vienna says it expects just 20,000 additional workers to arrive.
