Those modern Cassandras who continue to rail against the calamities that foreign workers bring to countries that do not keep them out at gunpoint ought to take a look at a new report from the European Commission. This executive body of the European Union (EU), an entity that has never been accused of promoting economic freedom, has just thrown a devastating report in the face of the 12 countries that chose to close the door to migrant workers from central and eastern Europe.
Two years ago, just as ten central and eastern European nations were about to join the EU, bringing the total number of members to 25, a continent-wide hysteria against “Polish plumbers” broke out. Convinced that the free movement of labora supposed pillar of the EUwould bring about a flood of poor central and eastern European workers desperate to earn better salaries or apply for welfare benefits in the richer nations, western Europeans began to demonize Polish plumbers. I remember being struck at the time by terrifying headlines repeating the same mantra from Madrid to Berlin: Polish plumbers were the new version of the bubonic plague. Consequently, of the 15 members of the EU at the time, only threeBritain, Ireland, and Swedendecided to give workers from the ten new member countries the freedom to live and work almost without restrictions. The rest of the EU members imposed a seven-year delay on allowing those workers into their countries.
Now, the European Commission, based on official data from every country in the Union, has published a report that proves the 12 protectionist countries were dead wrong. The three countries that lifted restrictions on labor mobility have seen their economies grow more and create more jobs than the rest because migrant workers have essentially filled skill shortages in construction, restoration, and other services (many are dentists and bus drivers.) There has been no “invasion” of central and eastern European workers. Except for Ireland, where the number is a bit higher, though still small, they amount to no more than 1 percent of the working-age population in the recipient countries. Moreover, restrictions have not stopped workers from moving to those western European countries that chose to keep them outthey are now in the underground economy. Ironically, Austria, the country that places the greatest restrictions on foreign workers, is also the one that got the highest number of migrant workersall of them posing as “self-employed.” And in those countries where they were welcomed, there has not been an increase in the number of people applying for welfare benefitsthe vast majority of workers simply want to work.
How is Europe reacting to this report? Some countriesFinland, Greece, Portugal, and Spainare thinking seriously about lifting the restrictions. Othersespecially Germany, France, and Austriahave announced they will keep the restrictions in place. One can only imagine what the next report, a few years from now, will say about France’s economy, already in a state of chronic stagnation because of protectionist legislation.
The evidence is so powerful that even the European Commission has come out asking all members to give up restrictions against the free movement of labor within the enlarged EU in order to galvanize their economies in these times of heavy competition from other regions of the world. This recommendation faces a very tough opposition from those countries obsessed with protecting themselves from globalization by limiting imports (remember the delightful row over Chinese bras), restricting mergers and acquisitions (note the recent blockage of the takeover of the French company Danone by the American Pepsico or of Banca Italiana del Lavoro by the Spanish BBVA) or, indeed, blocking the free flow of labor.
The debate goes to the very heart of the European Union’s avowed purpose: to encourage the free flow of labor, capital, goods, and services. The lesson is simple: the countries that have followed those principles more closely are doing better. That is why, for instance, Ireland, until a few years ago a poor country, has attracted so much foreign capital that U.S. affiliates account for a fifth of the nation’s gross domestic product today! If the other nations followed the good example, the EU as a whole would shake off its morass.
The wonderful irony of the prejudice against Polish plumbers in countries like France is that France has created dozens of thousands of jobs in France thanks to French investments in Poland.
And, before I forget, most plumbers in Poland are actually from the Ukraine!
|Alvaro Vargas Llosa is Senior Fellow of The Center on Global Prosperity at The Independent Institute. He is a native of Peru and received his B.S.C. in international history from the London School of Economics. His Independent Institute books include Global Crossings: Immigration, Civilization, and America, Lessons From the Poor: Triumph of the Entrepreneurial Spirit, The Che Guevara Myth and the Future of Liberty, and Liberty for Latin America.|