Theater of Cruelty

- Demanding for the labor market

The eastern workers did not come in dangerously large numbers. It came far fewer than some feared. But what we see is that we need to become better at organizing the labor market and immigration, ”says the research leaders at Fafo, Line Eldring and Jon Erik Dølvik.


Fafo's head of research Jon Erik Dølvik and research leader Line Eldring have, in the new report “Work and service mobility after EU enlargement”, (published by the Nordic Council of Ministers), looked more closely at the development of work and service mobility from the new EU countries in the East. -Europe to the Nordic countries since 1 May 2004. They have also looked at possible consequences for the Nordic labor markets.

One of the conclusions of the report is that EU enlargement has not caused imbalances in the Nordic labor markets as a whole. The Eastern Europeans who arrived have ensured that regional problems in finding enough qualified manpower have been resolved, and have probably had a favorable economic impact on the countries.

In total, the Nordic countries have granted 1 work permits lasting more than three months in the period from 2005 May to the end of March 18.000. Denmark granted 1900 permits, while Norway has issued 9100 permits. Norway and Denmark have almost the same regulations and the same transitional arrangements. Sweden, which has no transitional arrangement, gave 4400 work permits. Finland, which has the most stringent transitional regime, has issued 2500 work permits.

- Where did the many Eastern Europeans who were to come to the old EU countries, the Nordic countries and Norway?

- Even the most cautious researchers estimated that there would be more than actually came to Western Europe. The floods did not occur, although many have come to Great Britain, Ireland and Norway. The reason for that is several. Prior to the enlargement on 1 May 2004, there was much discussion about how the old EU countries should receive potential jobseekers from the new member states in the east. Most EU countries chose to introduce transitional arrangements to limit uncontrolled immigration. Norway also introduced a transitional arrangement, but with liberal rules. This came after the Swedish government had said that they were considering a transitional arrangement. It so happened that Sweden, together with England and Ireland, chose not to have transitional arrangements. With the exception of Sweden, the Nordic countries introduced rules to regulate labor immigration. Denmark and Norway have very similar rules in this area, which give the right to free job search at one's own expense for six months and the right to a residence permit for persons who found full-time work reimbursed in accordance with the national collective agreements. Iceland and Finland have continued the rules that applied to citizens from third countries, says Jon Erik Dølvik.

- The schemes introduced by Denmark and Norway are a clear liberalization of the conditions for labor immigration from the eight countries that joined the EU in 2004. The goal was to ensure orderly wage and working conditions for labor immigrants, says Line Eldring.

- And has one succeeded in this policy?

- For individual working immigrants, one has probably partly succeeded, but not at all for service providers and posted workers. So the scheme has not hit the main problem. If the goal was to limit the number of individual jobseekers to Norway and other countries, yes, then one may have succeeded. Because we did not get a large flow of individual jobseekers, while we got a strong growth in posted workers employed in companies in the home country, often under poor and unacceptable conditions. Norway, with its relatively liberal transitional system, has nevertheless had the second most individual migrant workers in Europe in terms of population. The explanation may be high demand for labor, as well as an attractive wage level in Norway. In recent years, many seasonal workers have arrived from Poland, which may have helped to establish migration routes. One reason why not more people came to Western Europe as a whole may be the discussions ahead of enlargement and partly the opposition to opening up the market. People may feel that they are not welcome in the west, says Line Eldring.

- What we also see is that labor immigration from the east has not affected the general balance in the labor market in the Nordic region, except in some pressure areas. One example is the construction industry in the Oslo Fjord area. While Polish craftsmen, among others, seek happiness in Norway and other countries, the Polish construction industry is experiencing a shortage of labor. The result is that people in Poland have begun to look for labor from countries such as Ukraine and Belarus. This is not only a challenge for the Polish authorities, but just as much for Norwegian and other Western governments. It is a crossroads whether the search for cheap labor in the world's richest countries leads to Poland having problems because their labor market is emptied of able-bodied people, says Jon Erik Dølvik.

- Who is coming, and how do they get to Norway?

- It is important to distinguish between individual labor immigration and so-called service mobility. While we have rules for how individuals who apply for a job should behave, the transitional scheme's requirements for “Norwegian” wage terms do not apply to posted workers who perform time-limited assignments in Norway. It is in this part of the labor market that one finds the grossest examples of social dumping. Unless the foreign service provider enters into a collective agreement in the host country, or is covered by a generalized collective agreement, posted workers can work in Nordic countries with wages based on the home country's rules and levels, says Dølvik.

- And here the Norwegian labor market is particularly vulnerable. Organizational and contractual coverage is low in some industries and the employer side has so far been skeptical about alternative regulatory mechanisms. This opens up a market where intermediaries can enter and mediate cheap labor from Eastern Europe to Norway with large profits. The largest part of labor immigration to the Nordic countries in the last year has probably come through the so-called service mobility. This means that the employees come to Norway, among other places, to do a specific job for a limited period. When the mission is over, they return home. There are currently few statistics on this, but surveys in Denmark suggest that this year there are three times as many service providers as there are ordinary job-seeking immigrants, says Line Eldring.

- There have been some changes in Norway. Among other things, we have received two decisions on the generalization of collective agreements in the construction industry. Is this not a step in the right direction?

- The challenge for Norway is that we are already today perceived as a country where it is quite free for subcontractors. The parties in the labor market have a responsibility to clean up this, but need support from the authorities through generalization, minimum wage or other measures.

The new red-green government gets these things on the table pretty quickly. Today's transition scheme expires in spring 2006, and before that time the government must clarify whether the transition scheme will be continued or what will happen. How labor and service migration should be regulated was hardly mentioned in the election campaign. The question is how Norway should regulate and organize this open labor market. Whether it should be through individual labor immigration that is easier to control and secure dignified working conditions. Or whether we should rely on service mobility and many who come to the country for shorter periods. The challenge with the latter is also that we do not know how long it will be possible to bring cheap Eastern European labor to Norway, says Jon Erik Dølvik.

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