From Ireland, EU Hears Hum of Cheap Labor ; by Monday, Western Europe Must Decide Whether to Lift Restrictions on Low-Wage Eastern European Immigrants

By Peter Ford writer of The Christian Science Monitor | The Christian Science Monitor, April 27, 2006 | Go to article overview

From Ireland, EU Hears Hum of Cheap Labor ; by Monday, Western Europe Must Decide Whether to Lift Restrictions on Low-Wage Eastern European Immigrants


Peter Ford writer of The Christian Science Monitor, The Christian Science Monitor


A scruffy 22-year-old Pole in an oily blue T-shirt, Rafal Dambiec is an unlikely symbol of the European Union's idealistic vision of its future.

Just getting off his night shift as a gas station attendant, all he wanted to do Tuesday morning was to go to bed.

Wolfing down an Irish breakfast of sausages, buttered bread, and tea, Mr. Dambiec is a pioneer - albeit unlikely - of the cross- border get-up-and-go that EU leaders say will be key to their continent's economic dynamism and political strength.

Two years after eight poor, former Soviet-bloc nations joined the EU, only Ireland, Britain, and Sweden allowthose new EU citizensto work freely within their borders.

On Monday, the rest of Western Europe will be challenged to offer people like Dambiec the sort of opportunities he has found in Ireland, and to make every European worker legal, in every European country.

Some governments have pledged they will. Others have hedged. Germany and Austria - bowing to voters' fears of a tidal wave of cheap labor from the East - have said they will maintain restrictions on migrant workers for as long as they are allowed to do so.

That, argues Hubert Krieger, an analyst at an EU think tank outside Dublin, is misguided. Welcoming an estimated 200,000 Eastern European workers over the past two years "did only good to Ireland's labor market and to its overall economic performance," he says. "All the alarmist signals at the beginning were wrong."

Nobody knows exactly how many new EU citizens are working in Ireland - they come and go freely and estimates of their numbers at any one time range from 50,000 to 150,000 - but their swift and enthusiastic arrival in order to snap up jobs has been a shock to the Irish system.

"Any of the figures we might have had in our heads at the start have been hugely surpassed," says Heidi Lougheed, a social policy analyst at the Irish employers' confederation.

Foreign population surges

Foreigners, who made up 3 percent of the population six years ago, now make up nearly 10 percent, says Macdara Doyle, spokesman for the Irish Congress of Trade Unions. "This is going to have massive economic and social consequences that are going to start showing up soon," he warns.

So far, most of the economic consequences have been good. The Eastern European migrants have filled gaps in the job market, fueling the "Celtic Tiger" boom that has seen the highest growth rates in Europe, and increased the government's tax and social security revenues.

And with almost full employment, none of the figures suggest yet that the cheap foreign laborers, generally willing to work at or below the 7.65 euros ($9.18) per-hour minimum wage, are pushing significant numbers of Irish workers out of their jobs.

"At a time of unprecedented inflows of non-national workers, participation by indigenous workers has increased" found a recent study by the AIB bank.

Unions worried by influx of cheap labor

The unions, however, are worried that all may not be as rosy as the figures suggest. An industrial dispute at the end of last year, for example, when a ferry company threatened to fire all its Irish seamen and replace them with Latvians ready to work for wages several times lower, "is a pointer" to what may be in store elsewhere, suggests Mr. Doyle.

To protect against similar incidents, unions and employers are hammering out the shape of a special tribunal that would rule on whether forced layoffs were genuinely unavoidable, or simply a prelude to rehiring minimum-wage foreigners.

Union leaders also complain that the apparently limitless supply of cheap labor has pushed real wages downward for the first time in 20 years. Though independent economists challenge union calculations, "the labor supply obviously has an effect on wages," says Mr. Krieger, the EU economic analyst. …

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