This document discusses labour migration and mobility within Europe. It notes that while labour migration has increased economic growth, there are also downsides like social dumping and exploitation of migrant workers. There has been a rise in postings of workers across EU countries, primarily driven by wage differences. Maintaining strong labour market institutions and social standards while improving enforcement of regulations is important to build a fair system of labour mobility in Europe.

1. Labour Migration in Europe
Anke Hassel / Bettina Wagner
Dealing with Low Wage Labour Immigration
Friedrich-Ebert-Stiftung Nordic Office and Arena Idé Conference
Norra Latin, Stockholm
14 November 2014

2. Labour mobility and migration in Europe is a success
story
• Strong increase of labour migration
• Economic assessment positive
• Further facilitation of labour mobility required and fostered:
– Recognition of qualification and skills
– Cross-border pension arrangements and income support
– Elimination of other barriers for mobility

3. There is a downside however….
• Revision of Posted Workers Directive as a
response to abuses of the system
• Social Dumping debates in Belgium/
France
• Anti-migration sentiments in many
member states
• Cases of labour exploitation on the
increase including human trafficking

4. How can we improve the reality of labour migration without
falling into the trap of right-wing populism?
How can modern welfare states cope with high levels of
inequality within the EU, high levels of labour mobility and
maintain high social standards?

5. Immigrants, 2012 (per 1 000 inhabitants)

6. Kahanec, Martin (2012) : Labor mobility in an enlarged European Union, Discussion Paper series, Forschungsinstitut zur
Zukunft der Arbeit, No. 6485, p. 40

7. Kahanec, Martin (2012) : Labor mobility in an enlarged European Union, Discussion Paper series,
Forschungsinstitut zur Zukunft der Arbeit, No. 6485, p. 43

8. 1400000
1200000
1000000
800000
600000
400000
200000
0
Figure 1: Number of postings within the European Union (2005-2011)
2005 2006 2007 2008 2009 2010 2011

9. 350
300
250
200
150
100
50
0
Figure 1: Postings by Destination Countries 2011 (in 1,000 )
from EU 15
from EU 12
DE FR BE NL AT IT CH ES UK NO SE LU FI CZ PL PT DK RO HU EL SK IE BG SI LT EE LV MT CY LI IS

10. 0 5 10 15 20 25 30
IT
ES
AT
NL
FR
DE
BE
Figure 2: Main destination countries for postings 2007/2011
(% of all postings)
2011
2007

11. Median gross hourly earnings, all employees (excluding apprentices), 2010
http://epp.eurostat.ec.europa.eu/statistics_explained/index.php/File:Median_gross_hourly_earnings,_all_employees_%28excluding_apprentices%29,_2010_%281%29_YB14_II.png

12. Median gross hourly earnings, all employees (excluding apprentices), 2010
Wage differentials are main drivers for intra-
EU posting of workers
http://epp.eurostat.ec.europa.eu/statistics_explained/index.php/File:Median_gross_hourly_earnings,_all_employees_%28excluding_apprentices%29,_2010_%281%29_YB14_II.png

13. Explanation for patterns of posted workers (2011)
UK and Ireland
– wage differential and differences in unemployment levels
– unemployment main driving force
Nordic countries
– strong negative relationship with posting and trade union density and
collective bargaining coverage
Continental countries:
– Wage differentials is main driving factor (weaker effect than in LME)
– Collective bargaining coverage decreases posting
Southern and Eastern Europe: No strong effects found
Strong wage bargaining institutions diminish the arbitrage
of wage differentials in Nordic and continental European
countries

14. How to build a social Europe in the context of labour mobility and migration?
• Maintain and strengthen labour market institutions and social standards;
• Improve the administrative capacities at the level of EU and member
states for law enforcement;
• Improve the monitoring of employers because of higher levels of
vulnerability of migrant workers.

15. Dealing with low wage labour migration
Anke Hassel / Bettina Wagner
Dealing with Low Wage Labour Immigration
Friedrich-Ebert-Stiftung Nordic Office and Arena Idé Conference
Norra Latin, Stockholm
14 November 2014

16. 350
300
250
200
150
100
50
0
Figure 1: Postings by Destination Countries 2011 (in 1,000 )
DE FR BE NL AT IT CH ES UK NO SE LU FI CZ PL PT DK RO HU EL SK IE BG SI LT EE LV MT CY LI IS
Source: EU Commission (2012). Posting of workers in the European Union and EFTA countries: Report on A1 portable
documents issued in 2010 and 2011, p. 12. Based on administrative data from EU Member States.
from EU 15
from EU 12

17. Drivers for extensive use of posted workers in Germany
• Proximity to low wage countries
• History of labour postings from Eastern Europe
• Weak regulation of outsourcing
• Transition agreements on labour mobility
• Weak labour market institutions (low bargaining coverage, no minimum
wage)
80
70
60
50
40
30
20
10
0
France
United States
Spain
Netherlands
Portugal
Australia
New Zealand
Germany
Greece
United…
Canada
Average
Austria
Ireland
Italy
Belgium
Norway
Denmark
Finland
Sweden
union density
100
80
60
40
20
0
collective bargaining coverage
United States
New Zealand
Canada
United…
Australia
Ireland
Portugal
Average
Germany
Greece
Norway
Italy
Denmark
Netherlands
Spain
Finland
France
Sweden
Belgium
Austria

18. Challenges
• Lack of labour inspectorate
• Lack of union inclusion of migrant workers
• Lack of cooperation of migrant workers to prosecute
• High financial incentives to exploit migrant workers
• Path of dualization of workforce (i.e. works councils)
• High demand for migrant labour due to demographic change
• No sufficient law enforcement and prosecution