Low labor migration harms economy

Foreign workers - the two words can win or lose an election, cause riots in the streets and, according to economists, are necessary to save the European and Czech economies.

While European governments have cracked down on foreign workers in response to high unemployment rates since the recession hit in 2008, the number of job vacancies for higher-skilled workers continues to grow, potentially hindering progress in new and innovative sectors.

"We've got this strange conundrum in Europe: There are high levels of unemployment in parts of the Eurozone, but if you look at the flip side, there are well over a million jobs open. Some estimates are as high as 1.8 million," said David Arkless, president of global corporate and government affairs at employment service Manpower.

Arkless said there is demand for employees in information technology, programming and engineering, as well as increasingly in specialized financial services.

"You've got this strange tension because there's a skill shortage, and we need immigrant workers from out of the EU, but there's a huge resistance to that," he said. "So we're in a situation where we can't get the right skills from foreign workers, but we can't seem to train our people to get the job done."

It's been forecast that the European Union will lose around 50 million workers by 2050 because of plummeting birth rates. Labor shortages began to emerge around five years ago, but have become increasingly relevant as industries in Europe start to thaw out after the cold days of recession and begin thinking about expanding again, and as countries continue to grapple with low birth rates and aging populations while thousands of immigrants bang on Europe's doors for entry.

"Many companies see this lack of skilled workers as a damper on their ability to expand. ... A lot of companies around Europe are saying, 'If we can't get the work done because of limited workers and rising pay rates, we'll take this operation to Vietnam or India,' " Arkless said.

The Czech Republic, some labor economists say, is a prime example of the Europe-wide trend to replace the welcome mats with intensified visa regulations, as well as programs that return immigrants to their home countries. Foreign workers, who were once treated as a valuable commodity for industry here, must deal now with policies pegged toward discouraging their entry, and in turn, the number of foreign workers dropped 6.6 percent last year.

"This could pose a major problem in the long term. ... I don't think Czechs realize that attracting immigrants, especially highly skilled immigrants, could really benefit their country," said Mariola Pytlíková, a professor of labor economics at the Aarhus School of Business in Denmark.

"There's such a fight for qualified or skilled workers globally, and it's not like they are standing in line to enter the Czech Republic," she said.

Already in 2007, several multinational companies with operations here - like IBM and Škoda Auto - began complaining about the lack of skilled workers, and recent education surveys do not offer cause for future optimism from the domestic work force. In March, a survey of CEOs conducted by IBM found that most think university graduates in the country lack sufficient ability to innovate.

The country could also lose workers to Germany and Austria, which opened their doors May 1 to allow free movement of workers from newer EU members, a move that's being touted as a way to battle their own lack of young, skilled labor.

"At least 100,000 people from eight East European countries will come here every year," German Labor Minister Ursula von der Leyen told the German weekly Bild am Sonntag.

However, several economists said they did not expect a massive outflow of Czech workers to Germany and Austria.

Despite a growing outcry from businesses, domestic political sentiments that help steer the anti-immigration policies in the Czech Republic don't seem to be fading. In a recent survey taken by the Center for Public Opinion Research, 54 percent of respondents said they did not think all foreigners should be eligible to live in the Czech Republic, and around half said they thought there are too many foreigners in the country.

To the contrary, the "overwhelming conclusion" of studies show that the effect of immigration on unemployment is actually "nominal, with almost no impact on jobs," according to Ryszard Cholewinski, a migration policy specialist at the International Labor Organization.

"One of the reasons is the jobs foreigners do of the lower-skilled variety are not attractive for nationals," he said.

Pytlíková said there are three types of immigrants: economic immigrants who move for jobs, asylum seekers and those seeking family reunification. Economic immigrants, she said, are shown to have a positive impact on economies while the other two categories have a negligible negative impact.

"Often, immigrants don't substitute natives in jobs but complement them," she said.

Although foreign workers can slightly affect job availability for lower-income positions, the effect is not lasting and often leads to native workers gaining employment in better jobs, Pytlíková said.

It's hard to see, she said, how a country working to be one of the next centers for cutting-edge innovation like nanotechnology and biotechnology could reach those goals without allowing in skill sets from abroad.

"Diversity increases creativity and innovation, which is important for economic growth," she said. "Once the government upgrades the skills of the work force and creates a more innovative environment, there are better business ideas to sell," which creates new industries that then generate more jobs.

Allowing in foreign workers can also contribute to a creating a younger work force, Cholewinski said. That eases, at least in the short term, some of the burden on the pension system that the government is currently scrambling to reform to meet a population that could see the number of people over 65 double in the next 20 years.

Cat Contiguglia can be reached at
ccontiguglia@praguepost.com