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Transcript of The Nordic labour market models and European mobility: Opportunities and challenges Line Eldring,...
The Nordic labour market models and European mobility: Opportunities and challenges
Line Eldring, Fafo
EURES Mobility Conference in Reykjavik, 22nd June 2007
Nordic working group follows the EU enlargement
• Appointed by the Nordic Council of Ministers, Fafo is coordinating the group
• The group is following the development in the Nordic labour markets after the EU enlargement
• Last report was published September 2006: http://www.norden.org/pub/velfaerd/arbetsmarknad/sk/TN2006558.pdf
• Next report will be published autumn 2007
The Nordic countries: More labour migrants are needed..
• 2004: Concerns for waves of migrants, social dumping, social tourism
• 2007: Concerns for ageing population, lack of manpower and increased competition on European labour
• Some sectors are now dependent on EU-10 labour
”The Norwegian Minister of Finance states that the government relies on labour migration to be able to fulfill their goals.” ( Foto: HÅKON LARSEN / SCANPIX ) Aftenposten 7.10.2006
Poland: Shortage of labour..
• Crisis in Polish construction 2000-2005:
– Employment reduced by 300 000 persons
– EU enlargement created new opportunities for Polish construction workers; at least 250 000 have emigrated
• 2006-7: Boom in Polish construction– 19 % growth in 2006– 100 000 more employed– increase in wages– major concerns for lack of labour in
construction– educational crisis
Mikołaj Chylak, Dzwigi i ludzie (Cranes & People)
Mobility of services
• No transitonal rules, free flow from 1 May 2004
• Free access for posted workers and service providers
Mobility of persons
• Transitional rules
Division of the labour market?
Different regimes for mobility of labour and services from EU-8 (10):
Grey zonesillegal work
2004-2011: Towards free movement
2004 2006 2009 2011
Free mobilityof services ………………………………………………………………………………D/Au?………….>
Free mobility 2007: of persons UK, Irl, Sw, ……………………Bulg/Romania? ………………………………………………>
Fl, Icl, Gr, Sp, P, It, Nl….......……………………………………….>
DK, N, Fr, B, mfl….....………………….>
De/Austria…….>
Opening of labour the markets – increased competition on labour
Nordic transitional regimes after 1 May 2006
• During the first 2 years after enlargement, concerns shifted from fear of social tourism to concerns about lack of labour
• Iceland and Finland repealed their transitional arrangements, but introduced special regulations on information and registration
• Denmark and Norway continued their regimes (some amendments in Denmark)
• Sweden – opened for free movement from 1 May 2004
No possibility for transitional regulations on the free movement of services
Wage regulation mechanisms in the Nordic countries
Collective agreementcoverage in private sector
Extension of collective agreements
Other mechanisms
Type of regime
Denmark 77% NoAccession agreements with local negotiations, or entry into employers’ org., making collective agreement mandatory
Auto-nomouscollective agreementmodel
Sweden 90% NoAccession agreementsLex Britannia
Norway 53%Yes, some
(construction)Mixed model
Finland 90%Yes,
widespreadTariff wages required by the Posting of Workers Act
Regulation by law (and strong unions)
Iceland 90% YesTariff wages required by the Posting of Workers Act
Rise in registered individual migration from EU-8 to the Nordic countries
• Surprising Nordic differences in individual migration
• Norway issued most permits
• Strongest growth in Iceland and Norway; high demand for labour
• The transitional regimes have had very different effects, and only cover a small part of the whole picture
Photo: Geir Bølstad, Dagbladet
Issued work permits to individual labour migrants from EU-8 to Nordic countries 1 May 2004 – 30 April 2006
41 731
10 598 10 671
5 605 5 845
2 690
27 259
0
5 000
10 000
15 000
20 000
25 000
30 000
35 000
40 000
45 000
Norway Sweden Denmark Finland Iceland
Nu
mb
er
of
perm
its
First time permits
Renewals
Issued work permits to individual labour migrants from EU-8 to Nordic countries January-April 2007
9553
5782
3052
1599
9497
0
2000
4000
6000
8000
10000
12000
Norway Denmark Sweden Iceland
First time permits
Renewals
The monitoring challenge
”We do not know the number of labour migrants to Norway”. (Norwegian authorities)
Poor statistics on volume, especially on mobility of services (in all European countries)
”I think there can be as many as 120 000-130 000 Poles in Norway”. (Szostak, Embassy of Poland)
(Aftenposten 3. September 2006)
Photo: Carl Martin Nordby, Aftenposten, 3.9.2006
Labour supply: Employers’ new strategic choices
(1) Hiring individual job-seekers looking for employment in a Nordic firm; (2) Hiring temporary service providers or contractors with posted workers;
(3) Hiring employees from temporary work agencies;
(4) Hiring independent single-person firms offering temporary services; (5) Direct foreign investment, outsourcing and leasing production in EU-8
Still huge gaps in labour costs compared to Nordic levels.
Norwegian companies’ use of labour from EU-8
10%
10%
15%
19%
15%
0 10 20 30 40 50
Cleaning
Hotels andrestaurants
Manufacturing
Construction
Totalt (N=5104)
Prosent
Source: Fafo 2006
GROWTH IN 2007!
Employment, hire or subcontracting?
41 46 13
0 % 10 % 20 % 30 % 40 % 50 % 60 % 70 % 80 % 90 % 100 %
Cleaning
Hotels and restaurants
Manufacturing
Construction
Total
Individual employment Services Both
Source: Fafo 2006
Regulations and realities
• Large control problems in all Nordic countries, regardless of level of regulations
• Numerous stories on social dumping and low wage competition
• Minimum wage level lower than national market level
• Labour inspectorates, tax authorities, police and trade unions all experience major capacity problems
• Unsolved problems related to efficient sanctions
Oslo survey: Gendered labour market • 26% of polish migrants in Oslo are women (average 10 years younger than men)
• Practically all men work in construction, 4 out of 5 women work in cleaning – mostly for private households
• 70% in construction are skilled workers. 30 of women have higher education
92
3
1
72
7
24
0 % 20 % 40 % 60 % 80 % 100 %
Men
Women
Construction Cleaning Other
Source: Fafo PMO-survey (2007)
Oslo survey: Medium to long term migration
27
34
34
23
15
52
41
52
63
56
21
25
14
14
29
0 % 10 % 20 % 30 % 40 % 50 % 60 % 70 % 80 % 90 % 100 %
Total
Self employed
Posted workers
Nor manpower agency
Employed by Nor company
Return within a year Don't know when they will return Will not return
Most people plan to stay for years – not months. 1 in 5 plan not to return – most plan to return, but don’t know when. Real short term: ca 10%
Migration perspective: No substantial difference between labor and service mobility
”Bogus posting” – Only 15 % of posted workers was employed by same company in Poland
Source: Fafo PMO-survey (2007)
Working conditions for Poles in Oslo
Legally hired by Norwegian companies (with recidency permit)
Better pay – ”normal” working hours
Job security
Holiday, sickleave, pensions
Access to health and welfare services
Posted
Self employed
Illegal workers
Lower pay – longer hours
Less job security
No rights to holiday, sickleave or pension
No access to health and welfare services
Legally hired by Norwegian companies (with recidency permit)
Better pay – ”normal” working hours
Job security
Holiday, sickleave, pensions
Access to health and welfare services
Posted
Self employed
Illegal workers
Lower pay – longer hours
Less job security
No rights to holiday, sickleave or pension
No access to health and welfare services
Generally lower wages and longer working hours than Norwegians
Feeling of discrimination increases by duration of stay
Transitional Restrictions push migration into alternative channels
dual labor market for migrants
Source: Fafo PMO-survey (2007)
Challenges ahead
• Differences in regulatory framework for different kinds of migrant labour have caused substition effects and control problems in all Nordic countries
• Need for further development and strengthening of national wage regimes for posted workers
• Unsolved monitoring problem; need for more and better statistics, and better registration routines
• Need for improvement of:– access to information on wages and employment conditions– control of temporary work agencies– strengthening of control mechanisms and labour inspectorates
Nordic companies and authorities are eager to keep EU-10 workers and to recruit even more in the years to come.
More information:
Nordic Council of Ministers’ Report:http://www.norden.org/pub/velfaerd/arbetsmarknad/sk/TN2006558.pdf
Fafo’s Forum on EU Enlargement: http://www.fafo.no/Oestforum