Westward ho! in Europe
Thousands protested in Ireland Dec. 10, angry about a plan by transport firm Irish Ferries to replace Irish workers with mostly Latvians at less than half the minimum wage. The case illustrates the hopes and fears surrounding the European Union's new labor mobility, but also serves as a migration myth buster.
Americans, well acquainted with mass movements of people for economic reasons, might understand what the EU is going through these days. Not only has it absorbed millions of Muslim immigrants in recent decades, but it's now adjusting to 10 new member states, most in low-wage Eastern Europe.
The fear of a great westward migration is so great that in 2004, when the new members joined, only Ireland, Britain, and Sweden dared open their doors to workers from the new EU countries. Twelve countries exercised their right to restrict labor from the new members, though they must lift these barriers by 2011.
Some of these skittish nations may not like being reminded of it, but Western Europe needs labor mobility. Its aging workers require younger ones to pay for looming welfare costs. And labor mobility enhances global competitiveness, something Europe could use more of.
The example of Irish Ferries, and Ireland as a whole, can help tamp down migration fears, such as a rush of wages to the bottom. If labor can move about on a large scale (and it hasn't done so yet), that could act to lower Western Europe's high wages - enough to increase competitiveness, but not enough to cause hardship (strong unions and minimum wage laws will see to that).
Indeed, union pressure forced Irish Ferries to change course and pay the migrants Ireland's minimum wage (it can skirt wage laws by registering its ships in Cyprus). But even at the higher rate, the migrant labor still costs less than the Irish labor.
And while Irish Ferries is indeed replacing Irish workers via a voluntary buyout, Eastern European migrants in Ireland, Britain, and Sweden are generally taking jobs which in-country workers don't want or can't fill. Quite naturally, migrants are flowing to where the open jobs are, with more landing in Ireland and Britain (where unemployment is less than 5 percent) than in Sweden (8 percent).
As legal migrants, they pay taxes, and of Ireland's 133,000 new EU workers (hardly a stampede), just 1 percent are claiming welfare benefits. A report to the EU in October described the labor flow to Ireland, Britain, and Sweden as "manageable and beneficial."
Of much more concern should be what's happening in these migrants' countries of origin. The tiny Baltic states especially are suffering a "brain drain" of workers that's not only put employers in a bind, but disrupted family and community life. To find replacement workers, these states are turning to nearby Ukraine and Belarus. But for a lesson on how to keep and entice labor over the long term, they should look at Ireland.
In the 1970s, Ireland suffered high unemployment. Citizens left in droves (not the first time). But it invested EU funds (now available to the new members) in infrastructure, and focused on education and attracting foreign investors. Its economy is now the fastest growing in Western Europe, and is hungry for migrants.
