As labor market liberalization approaches, Germany and Poland have mixed expectations – By Agnieszka Hreczuk

The telephone hasn’t stopped ringing. Iwona Petryczko, manager of an international placement agency in Warsaw, automatically rattles through the greeting. A young doctor from Silesia, a specialist in neonatology, is inquiring about his chances. “We have several openings,” she answers, “why don’t you just stop by.”

For the past 11 years Petryczko and her colleagues have been successfully placing Polish personnel and specialists in Germany and Switzerland. “But we’ve been receiving dozens of requests daily over the past few weeks, more than ever before,” Petryczko says. “You notice that the first of May is approaching.”

Starting on that date, citizens of the eight EU member states in Central and Eastern Europe that joined the union in 2004 – Poland, Estonia, Latvia, Lithuania, the Czech Republic, Slovenia, Slovakia, and Hungary – will now be able to work without restrictions, including in Germany and Austria.

Unlike Ireland, Sweden, or non-EU members like Switzerland and Iceland, Germany and Austria used the EU’s seven-year “interim arrangement” to protect their markets from a flood of cheap labor. Many citizens of those countries feared that cheap labor from the eastern countries would threaten local wage levels.

A March survey by the market researchers IMAS in Munich found that 70 percent of those questioned felt that opening the German labor market would have negative results for the country. Only 16 percent expected positive changes. German economists, in contrast, see the free movement of labor as an opportunity.

They have long complained of an increasing lack of skilled workers in Germany. According to forecasts by Nuremberg’s Institute for Labor and Occupational Research, the number of potential workers in the workforce is expected to decrease by 1.8 million by the year 2020. Right now many training positions remain unfilled due to a lack of applicants. Candidates from Eastern and Central Europe could fill the gap.

“Germany has already missed the boat,” believes Bohdan Wyznikiewicz, economist in Warsaw’s Market Economics Research Center. “In 2004 the potential was enormous. Unemployment in Poland was much higher than it is today – and the wage differential to the West was greater.” Many highly skilled workers emigrated, especially to Britain and Ireland, both of which opened their markets immediately – but some also went to Germany.

Even before the total liberalization, there was always the possibility to work in a self-employed capacity. Special arrangements were made for engineers and seasonal laborers. There was also the possibility of working illegally as a cleaner or construction worker. More than 400,000 Poles currently live in Germany, according to conservative estimates. Only Britain has more Polish immigrants.

“If anyone is going to leave,” Wyznikiewicz said, “then certainly not the skilled laborers that Germany is hoping for, but those with less qualifications from smaller towns or villages who can only expect to find badly paid jobs at home, or none at all.”

As the first of May approaches, Poland’s media are not the only ones asking: “Is it worth emigrating?” Unlike in 2004, when many Poles still believed in the vision of unlimited opportunities and higher incomes in the West, the euphoria now is limited. Wages may be higher in the West, but so is the cost of living.

In addition, integration is not always easy, even in a neighboring country like Germany. It places a burden on family ties, and not everyone gets a job commensurate with their qualifications. The Polish government says it is definitely not expecting another great labor migration like the one seen in 2004. They estimate there will be 300,000 to 500,000 emigrants at most over the next two years.

“That is more generous than their estimates in 2004, but just as wrong,” says professor Krystyna Iglicka, an economist and demographer with the respected Warsaw Center for International Relations. “Then the official prognosis was 40,000 emigrants – in reality there were more than a million.”

Iglicka, who has been conducting research in this field for years, believes that they should be expecting about one million this time around too. Some of the approximately two million unemployed will certainly leave the country, but so will liberal arts and humanities graduates, who do not have good prospects in Poland. They will take on jobs abroad for which they are over-qualified – just like they were already doing at home.

Iglicka is fairly certain that Germany will be the main destination for this new migration. The size of the country is one indicator. Another factor is that “Germany is not terra incognita, like Ireland or Norway in 2004.” Well functioning Polish communities can offer points of contact, and will attract those migrants less willing to take risks.

If her prediction is confirmed, Poland will be facing a number of problems in the coming years. The country’s pension system is already underfinanced, and every emigrant means less money for the social welfare system. Impoverished regions will be especially hard hit by the migration and will be threatened with economic stagnation.

Economists believe the only solution to the dilemma is to boost immigration into the country. Iglicka is certain: “We Polish must open ourselves to foreigners. There are already Vietnamese, Chinese, Indians, and Turks in the country.” Economically, there is no alternative to labor immigration for Poland. “Because others have had bad experiences with it does not mean that it has to be that way here,” Iglicka said.

Meanwhile, Petryczko reports that the above-mentioned neonatologist from Silesia came by her office. The hospital where he used to work is facing budget cuts, and his position is at risk, despite an overall shortage of neonatal specialists in Poland.

The young man might have a chance in Warsaw – but he would have to start from scratch there, too. So now he is trying to decide between Bavaria and Switzerland. As a precautionary measure, he has started learning German.