Portfolio blogger

Sunday, October 22, 2017

Equal pay with locals for posted workers is hypocritical, not helping social justice and economically not rational

Two discussion are going on concerning free movement of people (workers) in the EU: on social support and other allowances to workers and their families (and workers who become jobless) who moved to work from a "poorer" or "lower wage" or "lower cost" country and about the so-called "posted workers", who keep their employment status in their original country but their company moves them to work in another one - also exploiting the difference between wage and price levels. That this is good for consumers by decreasing prices, no one can deny. The plans for reform, howver, are not coherent in these two domains.
While if they have to pay - family and education allowances - governments want to pay less to workers in their countries who have their families in cheaper countries, when others have to pay, i.e. foreign enterprises, they ignore that posted workers do not give up their roots, flats, contacts in their mother countries, they are temporarily in their country of posting. Therefore the slogan "equal pay for equal work", if taken by purchasing power, does not hold.
Who would benefit from the proposed modification? Not the posted workers, they would lose their jobs. The local enterprises would have more demand for their work, this could raise prices. This price increase would not benefit the local workers, if the argument that posted workers harm local industry, holds, as then there would be just a return to normal employment. They would, however, suffer from higher prices as consumers. If the EU wants more social justice, it should favour consumers, not the companies employing them. In particular not one group of companies over another by limiting competition.
Finally, what about the single market? The Services Directive was watered down by the same interests which are at work to amend the posted workers directive, therefore there is no free market in services to protect. Obstacles are in the Directive and in implementation (e.g. administrative difficulties to have qualifications recognised in the “regulated professions”). Therefore I would suggest to Eastern-European governments that when they accept the amendment, they should only do it only for sectors where services are completely liberalised. It would of course help if the Commission would already take these considerations on board when making its proposal.
While writing this, I found the article from Bruegel, a renowned  think tank, titled "EU posted workers: separating fact and fiction". It explains that in 2015, there were around 2 million work postings in the EU, which is 0.65% of the labour force and 0.9% of total employed people in the EU.
This is not an immense threat to employment in the receiving countries but more important for the sending countries (according to the same article, their share in Polish domestic employment is 2.5% but it has to be mentioned that Poland sends out most - almost a quarter of total - posted workers). This share also seems small, but losing their job may be a tragedy for the posted workers themselves and a lethal blow to the companies as well. Thus, to increase employment by fraction of a percent (from the arguments above it follows also that due to the decrease of demand caused by the increase in prices not all posted jobs will be filled with locals, i.e. the "positive" impact will be smaller), lives and companies will be ruined. This does not look like solidarity, which is one of the main values of Europe.

Friday, May 5, 2017

New Eurobarometer survey reveals euroskeptic government propaganda may not influence the attitude of Hungarians to the EU

„Two years before the next European elections” a newEurobarometer survey marks interesting trends and also interesting data about Hungary.
In the same proportion as the average in Europe, 73% of Hungarians think that the instability in the Muslim world can be handled better on a European than on national level – in spite of the nationalist rhetoric of the Hungarian government trying to convince them that they protect the country. On the other hand, only 65% think the same when it comes to countering the growing activity and influence of Russia – compared to the 71% European average. Concerning the other similar questions, the difference between the Hungarian and the European average is 3% or less.
Aother topic: only 48% of Hungarians consider the EU as a good thin (as opposed to 57% of Europeans but 63% of them is attached to the EU (while in Europe this proportion is 56%). A little larger proportion of Hungarians than the European average think that those who are not yet ready for co-operation in a given domain, should not be waited for, but those who are ready, should start. From the Hungarians, 32% thinks that their word counts in the EU, 44% that it counts in Hungary. The 12% difference between these two values is interesting as on the average in Europe, this differ3enc is bigger (the national influencing power is 20% more). There are only seven countries where the proportion of those who think their word counts in their country, is lower. Nine countries have lower values concerning their influence in Europe.