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Germany opens labor market, finally

But strong growth in Poland and other eastern countries means workers might stay home.

Germany labor market polish workers 04 29 2011Enlarge
People chat on April 12, 2011 during a job fair in Wroclaw, Poland. Once feared by workforces in Austria as well as Germany, the proverbial Polish plumber is now being wooed as Vienna and Berlin seek to top up a shortage of skilled laborers as they fully open their job markets on May 1 to the eastern members who joined the EU in 2004. (Janek Skarzynski/AFP/Getty Images)

BERLIN, Germany — If there really were a wave of cheap Polish workers waiting to pour over the border into Germany, as some Germans seem to fear, then the employment agency Jobland would know about it.

On Sunday, Germany will drop the labor market restrictions it has maintained on eight eastern neighbors, including Poland, since those countries joined the European Union in 2004. But Jobland, a Warsaw-based agency specializing in engineering and construction recruitment across Europe, isn’t predicting any great flood on Monday morning.

“We have had several telephone calls from people interested in working in Germany,” Jobland recruitment manager Grzegorz Nagorka said. “It is not a large group though. Most of our candidates look for jobs in other European countries.”

It is with some trepidation that Germany and Austria apply the “freedom of movement for workers” chapter of EU law on Sunday, having deferred the chapter for the maximum allowed seven years out of fear their own job markets would capsize. Citizens of the “EU-8” countries — Poland, Slovakia, the Czech Republic, Hungary, Slovenia, Latvia, Lithuania and Estonia — will finally be able to work, without restriction, in Europe’s biggest economy.

While Britain, Ireland and Sweden opened their job markets right away in 2004, and Italy, the Netherlands and France followed in 2006, 2007 and 2008 respectively, Germany chose to wait and watch. In the lead-up to Sunday — which happens to be May 1, the International Workers’ Day — there are still jitters about the danger of Germans missing out on jobs and of foreign workers pushing down wages.

But most experts say the bigger issue is that Germany, which now desperately needs skilled migrants, might have actually have missed the boat.

For the past seven years, eastern European workers, many of them skilled, have enthusiastically traveled. About 2 million Poles alone went to western Europe, mostly to Britain and Ireland where they contributed to the booms in those countries.

Those booms have since been muffled. Meanwhile the east, and Poland in particular, has grown strongly, encouraging workers to return. Germany is now bucking the European trend and enjoying its own boom, accompanied by a looming skills shortage, right at the time when some of the gloss of mobility may have worn off, experts say.

“I think there is a bit of exhaustion for mobile people who pioneered movement among countries after 2004 and have built their networks in English-speaking countries,” said Christal Morehouse, senior project manager at the Bertelsmann Foundation, a leading German think tank.

“Germany’s decision to postpone … was a signal of reluctance to share in the vision of mobility and expressed uncertainty and fear about what labor mobility meant for the German economy,” she added.

Klaus Zimmermann, head of the Bonn-based Institute for the Study of Labor and a champion of labor immigration as well as a top economist, echoed the sentiment in comments this week to news magazine Der Spiegel.

“This hesitant attitude, based on fears of a possible negative effect on the German labor market, now turns out to have been a huge mistake,” he said.

There are still advantages in Germany’s favor. German wages tend to be double, sometimes even triple, the average in Poland, let alone the smaller and weaker new states. Germany’s unemployment rate dropped to 7.1 percent in March according to figures released this week, which is close to a 20-year low. Poland’s jobless rate, despite its strong economic performance, is about 13 percent.

The Confederation of German Trade Unions and some members of its aligned political party, the center-left Social Democratic Party, have expressed fear that wages and conditions for German workers will be driven downward when it opens its labor market. Germany currently has no universal minimum wage and advocates are using Sunday’s changes to bolster their case to introduce one.

One hopeful mobile worker is Maciej Kleczek, a 29-year-old PhD student in philosophy and logic from Wroclaw who is keen on Germany though conscious of the job limitations of his chosen field. It was no great surprise, he said, that Germany kept the restrictions as long as it could, given the two countries share a 300-mile border. Poles weren’t offended.

“The important point now is how German society accepts Poland,” he said. “Germans have changed their attitude of Poland from an image of a backward country to an increasingly modern country.”

But like all observers, Kleczek points out a practical obstacle: most young, educated Poles today learn English. Moreover, for the past seven years they’ve had an even stronger incentive to study the language.

Jobland’s Grzegorz Nagorka said learning German would likely be a turn-off for many skilled Polish workers.

“In the U.K., Holland, Belgium, Norway, Sweden, Finland, Ireland etc., one can easily communicate in English,” he said. “Germany requires German language, which might be problematic. Many Polish employees worked in numerous companies abroad, where they gathered international experience and knowledge of English. So they might be interested in using this knowledge and skills later on, not starting all over again trying to learn a new language.”

The German government’s own labor experts predict no more than 140,000 people from the EU-8 countries will migrate to Germany each year as a result of the new regulations. They will bring some challenges but a good number of benefits, experts say.

“There will be more competition for jobs, particularly in lower-skill jobs and especially among existing immigrants,” said Morehouse. “But talent attracts talent. Germany has a lot to gain from this if they can grow clusters of innovation.”

http://www.globalpost.com/dispatch/news/regions/europe/germany/110429/germany-labor-market-poland