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Migration, Austerity and New
Challenges to Labour Markets in
the Baltic/Nordic Region
Professor Charles Woolfson
LABOUR MIGRATION IN THE BALTIC SEA COUNTRIES:
TRENDS AND PROSPECTS
25 April 2013
Constitutional Hall, Parliament of the Republic of Lithuania,
Gedimino av. 53, Vilnius
Acknowledgments
• Swedish Council for Working Life and Social
Research (FAS) Project Number: 2011-0338,
Svensk modell och baltisk rörlighet:
harmonisering eller social dumpning? En studie
av arbetsmigration mellan Baltikum och Sverige.
• The Swedish Institute, Visby Programme grant
00749/2010 East-West labour migration,
industrial relations and labour standards in a
Swedish-Baltic context.
• Indre Genelyte, REMESO doctoral candidate and
Professor Arunas Juska, University of East
Carolina, prepared key empirical charts.
Key Labour Market Indicators
Real GDP growth rate compared to previous year (%)
-20
-15
-10
-5
0
5
10
15
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 (f) 2013 (f)
EU (27 countries) Estonia
Latvia Lithuania
Publicsector
Private
sector
Private sector
(low but growing
informalization)
Private sector
(high informalization)
Public
sector
Core EU Countries Peripheral (post-
socialist) countries
Private
sector
Secondarysegment:
laborintensive/low-skill
Primarysegment:high
wage/higheducation/skill
Dual labor markets in Core and Peripheral Countries
*Source: LR Finansu Ministerija (2013). ES lėšos Lietuvos biudžete at
http://www.finmin.lt/c/portal/layout?p_l_id=PUB.1.64
10.4
12.1
15.9
17.19
20.46
14.7
13.38
19.91
21.73
1.39 2.003 2.162
3.48
5.1
5.92
7.89
6.92
7.131
11.79%
14.20%
11.97%
16.84%
19.95%
28.71%
37.09%
25.79%
24.71%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
40.00%
0
5
10
15
20
25
2004 2005 2006 2007 2008 2009 2010 2011 2012
%ofBudgetAccountedbyEUTransfers
BillionsofLitas
Lithuanian Government's Budget
(billion Litas, 2004-2012)
Revenue EU funds % budget accounted by EU funds
Cartoon by Rytis Daukantas from Jakeliunas, Stasys. 2010. Lietuvos Krizes Anatomija.
Vilnius: UAB Kitos Knygos, p. 91
Characteristics of dual labour market
• Primary sector
State and local
administration/high skill/high
education
-Some wage reductions
-Secure employment
-External EU programme
funding support
-High social capital/patronage/
networking/
-Relative employment security
-Reduced labour rights
• Secondary sector
Low wage/low
skill/manufacturing/service
-Large wage reductions
-Mass unemployment
-Increased temporary
contracts, easier dismissal,
longer hours
-Informalization and job
insecurity
-Reduced labour rights
Size of Informal Economy % of GDP 1997-2012
Size of the Shadow Economy of 31
European Countries in 2013
Sourrce: F. Scneider at http://www.econ.jku.at/members/Schneider/files/publications/2013/ShadEcEurope31_Jan2013.pdf
Real wages (%, YoY)
Source: SEB Baltic Household Outlook April 2013
Primary
public
sector
Secondary Private
Bifurcation: Hollowing out of middle
Two-thirds earn less than average wage (2,202LT or €637 per month)
Primary
private
(“Oligarchs”)
195 Thousand (18.5%) of workforce earn
minimum wage or less
Key Social and Demographic Indicators
Poverty in Lithuania
20.5 20.0 19.10 20.0 20.6 20.2 20.0
26.1 26.6
25.50
27.2
29.4
31.8
33.4
746
918
1188
1512
1746
1472
1452
0
200
400
600
800
1000
1200
1400
1600
1800
2000
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
2005 2006 2007 2008 2009 2010 2011
LItas
Percent
Poverty, At Risk of Poverty, and Level of
Poverty in Lithuania (2005-2011)*
Poverty level At Risk of Poverty Level of poverty for 4 persons' houshold
* Source: Statistics Lithuania
Life expectancy at birth, men and women
2002 and 2011
Demographic projections for Baltic States
2010-2060
Source: Eurosat
Population aged 65 years or over (%
of the total population)
Source: Eurostat
Migration as “exit”
Emigration from Baltic states plus Poland to
Norway, Denmark and Sweden
1813
3573
4810
8069
9257
8737
7881
7135
7141
1116
2389
4439
9279
17305 18333
15172
21011
23418
3708
5098
8360
13725 15686
19146
9666
8741 9024
0
5000
10000
15000
20000
25000
2003 2004 2005 2006 2007 2008 2009 2010 2011
Sweden
Norway
Denmark
11,032
15,16515,571
12,602 13,853
17,015
21,970
83,157
53,863
41,100
4,728 5,553 6,789
7,745 8,609 9,297 6,487
5,213
15,685
19,843
0
5
10
15
20
25
30
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Emigrationper1,000population
Emigrants/Immigrantsinthousands
Emigration, Emigration Rate, and Immigration
Lithuania 2003-2012
Emigrants Immgrants
Emigration by age group from Lithuania 2012
12.6%
7.1%
20.5% 20%
12.3%
8.8%
6.5%
0%
5%
10%
15%
20%
25%
0-14 15–19 20–24 25–29 30–34 35–39 40–44
Prognosis:
Austerity is the new “normal”
Social distance indicators
Lithuania and Sweden compared
(Source: 4th European Social Survey)
Most people can be
trusted or you can't be
too careful; Most
people try to take
advantage of you, or
try to be fair; Most of
the time people
helpful or mostly
looking out for
themselves
Things are going in the right direction or in the
wrong direction in your country? (% positive)
Source: Estonia HDR 2011
“Most elected officials care what people
like me think”
Percentage Agree
1991 2009 Change
% %
Poland 24 37 +13
Russia 18 26 +8
Ukraine 22 23 +1
Hungary 32 22 -10
Slovakia 21 22 +1
Czech Rep 34 18 -16
Lithuania 30 15 -15
Bulgaria 21 14 -7
(Source: PEW Attitude Survey 2009)
Then and Now
“Do you want to be free?” A loud affirmative response
of “YES!” roars over the massed throng attending a pro-
independence rally. Landsbergis continues: “But it will
be hard. Will you persevere?” Again, “YES!” booms
through the crowd. Vytautas Landsbergis, 1990.
“We are living through our second historical trial since
breaking with the Soviet Union. <…> Either we will
persevere or the future (of our nation) will be one of
oblivion. We need more friendliness and brotherliness,
less egoism, less exploitation and more humanity and
sociability in Lithuanian society. Otherwise we will
either destroy ourselves through drink or we will
disappear and be scattered throughout the world.”
Vytautas Landsbergis, 2013.

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Vilnius Parliament Presentation 2013

  • 1. Migration, Austerity and New Challenges to Labour Markets in the Baltic/Nordic Region Professor Charles Woolfson LABOUR MIGRATION IN THE BALTIC SEA COUNTRIES: TRENDS AND PROSPECTS 25 April 2013 Constitutional Hall, Parliament of the Republic of Lithuania, Gedimino av. 53, Vilnius
  • 2. Acknowledgments • Swedish Council for Working Life and Social Research (FAS) Project Number: 2011-0338, Svensk modell och baltisk rörlighet: harmonisering eller social dumpning? En studie av arbetsmigration mellan Baltikum och Sverige. • The Swedish Institute, Visby Programme grant 00749/2010 East-West labour migration, industrial relations and labour standards in a Swedish-Baltic context. • Indre Genelyte, REMESO doctoral candidate and Professor Arunas Juska, University of East Carolina, prepared key empirical charts.
  • 3. Key Labour Market Indicators
  • 4. Real GDP growth rate compared to previous year (%) -20 -15 -10 -5 0 5 10 15 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 (f) 2013 (f) EU (27 countries) Estonia Latvia Lithuania
  • 5. Publicsector Private sector Private sector (low but growing informalization) Private sector (high informalization) Public sector Core EU Countries Peripheral (post- socialist) countries Private sector Secondarysegment: laborintensive/low-skill Primarysegment:high wage/higheducation/skill Dual labor markets in Core and Peripheral Countries
  • 6. *Source: LR Finansu Ministerija (2013). ES lėšos Lietuvos biudžete at http://www.finmin.lt/c/portal/layout?p_l_id=PUB.1.64 10.4 12.1 15.9 17.19 20.46 14.7 13.38 19.91 21.73 1.39 2.003 2.162 3.48 5.1 5.92 7.89 6.92 7.131 11.79% 14.20% 11.97% 16.84% 19.95% 28.71% 37.09% 25.79% 24.71% 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 35.00% 40.00% 0 5 10 15 20 25 2004 2005 2006 2007 2008 2009 2010 2011 2012 %ofBudgetAccountedbyEUTransfers BillionsofLitas Lithuanian Government's Budget (billion Litas, 2004-2012) Revenue EU funds % budget accounted by EU funds
  • 7. Cartoon by Rytis Daukantas from Jakeliunas, Stasys. 2010. Lietuvos Krizes Anatomija. Vilnius: UAB Kitos Knygos, p. 91
  • 8. Characteristics of dual labour market • Primary sector State and local administration/high skill/high education -Some wage reductions -Secure employment -External EU programme funding support -High social capital/patronage/ networking/ -Relative employment security -Reduced labour rights • Secondary sector Low wage/low skill/manufacturing/service -Large wage reductions -Mass unemployment -Increased temporary contracts, easier dismissal, longer hours -Informalization and job insecurity -Reduced labour rights
  • 9. Size of Informal Economy % of GDP 1997-2012
  • 10. Size of the Shadow Economy of 31 European Countries in 2013 Sourrce: F. Scneider at http://www.econ.jku.at/members/Schneider/files/publications/2013/ShadEcEurope31_Jan2013.pdf
  • 11. Real wages (%, YoY) Source: SEB Baltic Household Outlook April 2013
  • 12. Primary public sector Secondary Private Bifurcation: Hollowing out of middle Two-thirds earn less than average wage (2,202LT or €637 per month) Primary private (“Oligarchs”) 195 Thousand (18.5%) of workforce earn minimum wage or less
  • 13. Key Social and Demographic Indicators
  • 15. 20.5 20.0 19.10 20.0 20.6 20.2 20.0 26.1 26.6 25.50 27.2 29.4 31.8 33.4 746 918 1188 1512 1746 1472 1452 0 200 400 600 800 1000 1200 1400 1600 1800 2000 0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 2005 2006 2007 2008 2009 2010 2011 LItas Percent Poverty, At Risk of Poverty, and Level of Poverty in Lithuania (2005-2011)* Poverty level At Risk of Poverty Level of poverty for 4 persons' houshold * Source: Statistics Lithuania
  • 16. Life expectancy at birth, men and women 2002 and 2011
  • 17. Demographic projections for Baltic States 2010-2060 Source: Eurosat
  • 18. Population aged 65 years or over (% of the total population) Source: Eurostat
  • 20. Emigration from Baltic states plus Poland to Norway, Denmark and Sweden 1813 3573 4810 8069 9257 8737 7881 7135 7141 1116 2389 4439 9279 17305 18333 15172 21011 23418 3708 5098 8360 13725 15686 19146 9666 8741 9024 0 5000 10000 15000 20000 25000 2003 2004 2005 2006 2007 2008 2009 2010 2011 Sweden Norway Denmark
  • 21. 11,032 15,16515,571 12,602 13,853 17,015 21,970 83,157 53,863 41,100 4,728 5,553 6,789 7,745 8,609 9,297 6,487 5,213 15,685 19,843 0 5 10 15 20 25 30 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Emigrationper1,000population Emigrants/Immigrantsinthousands Emigration, Emigration Rate, and Immigration Lithuania 2003-2012 Emigrants Immgrants
  • 22. Emigration by age group from Lithuania 2012 12.6% 7.1% 20.5% 20% 12.3% 8.8% 6.5% 0% 5% 10% 15% 20% 25% 0-14 15–19 20–24 25–29 30–34 35–39 40–44
  • 23. Prognosis: Austerity is the new “normal”
  • 24. Social distance indicators Lithuania and Sweden compared (Source: 4th European Social Survey) Most people can be trusted or you can't be too careful; Most people try to take advantage of you, or try to be fair; Most of the time people helpful or mostly looking out for themselves
  • 25. Things are going in the right direction or in the wrong direction in your country? (% positive) Source: Estonia HDR 2011
  • 26. “Most elected officials care what people like me think” Percentage Agree 1991 2009 Change % % Poland 24 37 +13 Russia 18 26 +8 Ukraine 22 23 +1 Hungary 32 22 -10 Slovakia 21 22 +1 Czech Rep 34 18 -16 Lithuania 30 15 -15 Bulgaria 21 14 -7 (Source: PEW Attitude Survey 2009)
  • 27. Then and Now “Do you want to be free?” A loud affirmative response of “YES!” roars over the massed throng attending a pro- independence rally. Landsbergis continues: “But it will be hard. Will you persevere?” Again, “YES!” booms through the crowd. Vytautas Landsbergis, 1990. “We are living through our second historical trial since breaking with the Soviet Union. <…> Either we will persevere or the future (of our nation) will be one of oblivion. We need more friendliness and brotherliness, less egoism, less exploitation and more humanity and sociability in Lithuanian society. Otherwise we will either destroy ourselves through drink or we will disappear and be scattered throughout the world.” Vytautas Landsbergis, 2013.