1. Future Trends on the European Labour Market Increased Competition for and Shortage of Skilled Key-Workers Søren Kaj Andersen EURES IS Mobility Conference, May 30th 2008

2. EURES IS Mobility Conference, May 30th 2008 The European perspective The regulation: Freedom of movement on the EU-labour market Beyond 2009 / 2011 All transitional regimes are phased out Increased competition for (skilled) workers; e.g. consequences of an open German labour market! Increased pressure on Nordic / Western European labour market regulation? Posted workers (the Vaxholm/Laval case), temporary work agencies Wage and welfare gap between east and west The win-win scenario (brain circulation)? The win-loose scenario (brain drain)? University of Copenhagen

3. EURES IS Mobility Conference, May 30th 2008 The Nordic countries: Work permits to individual job seekers from the EU-8 (+2) source, Fafo 2004 (1 may- 31 dec.) 200520062007 (1 Jan-31 July) Total 1 May 2004- 31 July 2007 Denmark (issued work and residence permits 2.0974.92310.35310.367 [2008: 25.000] 27.740 (incl. renewals) Finland (decision by the Labour Agency 2.1692.633-(6.273)- Iceland (work Permits granted/registration by employer 515 (+666) 2.764 (+844) 6.004 (+1.496) 3.091 (+1.136) 12.374 (+4.142) Norway (EEA permits granted) 16.975 (+3.558) 19.301 (+17.902) 29.275 (+25.510) 23.879 (+22.230) [2008: 60.000] 89.430 (+69.200) Sweden (registered new EEA applications, work) 3963 (+128) 4.805 (+2.133) 5.692 (+289) 2.44016.900 (+2.550) Total 25.719 (+4.352) 34.426 (+20.879) 51.324 (+27.295) 39.777 (+23.366) 151.246 (+75.892) The numbers in brackets are renewals University of Copenhagen

4. EURES IS Mobility Conference, May 30th 2008 The Nordic countries: Posted workers from EU-8 (+2) Sweden: 20.000 posted workers in construction (Swedish LO 2006) Finland: More than 10.000 (Finnish authorities/E101, 2006) Norway: 21.000 (Norwegian tax authorities, 2007) Denmark: 13.000 posted workers in construction, December 2007 Iceland: 20 active service providers (May 2008) Everyone agrees that the actual numbers of posted workers are (significantly) higher University of Copenhagen

5. EURES IS Mobility Conference, May 30th 2008 European work migration ; skilled key-workers Immigration/return migration – Doctors and nurses from Eastern Europe to the Nordic countries A still more mobile European work force! Circular migration – so far mostly unskilled and skilled workers; skilled key- workers and high-skilled workers in the future? “Weekly commuters” Poles and Germans in Danish industries; (engineers via TWAs?) “Commuting from Poland” GPs in Poland: 300 £ per month; in The UK 80 £ per hour, source: IPPR Posted Workers / Foreign service providers Impact of the Service Directive University of Copenhagen

6. EURES IS Mobility Conference, May 30th 2008 European challenges – the declining work force Between 2010 and 2030, at current immigration flows, EU-25s working age population will be reduced by some 20 million EU Commission Share of working population as share of total population is expected to decrease from 67.2% in 2004 to 56.7% in 2050, a fall of 52 million Eurostat projections University of Copenhagen Unemployment in EU-27 is decreasing; however around 16 million EU-27 citizens are still unemployed

7. EURES IS Mobility Conference, May 30th 2008 The third-country perspective EU Commissioner Frattini in the European Parliament: 85% of unskilled labour migration goes to the EU and 5% to the US, whereas 55% of skilled labour goes to the US and only 5% to the EU University of Copenhagen Third-country highly qualified workers as percentage of total work force European Union1.7 % Australia9.9 % Canada7.3 % US3.2 % Switzerland5.3 % Source: European Commission The regulation: New policy initiatives; EU-level and national level (incl. the Nordic countries)

8. EURES IS Mobility Conference, May 30th 2008 Attracting skilled key-workers The relatively large inflow of EU8 (+2) migrant workers/posted workers to the Nordic countries … … based on the comparatively high wage levels and favourable working conditions for unskilled and skilled workers in the Nordic countries The comparatively lower wage levels for highly skilled workers in the Nordic countries = a barrier for attracting highly skilled migrants? Skilled and highly skilled workers from EU-8 (+2)/third-countries are doing unskilled and semi-skilled work in the Nordic countries (brain waste) Barriers: Language, level of taxation University of Copenhagen

9. EURES IS Mobility Conference, May 30th 2008 Recruitment; experiences so far … Recruiting EU-8 (+2) migrants 1.Personal contacts 2.Business partners 3.Temporary work agencies, ‘new agents’ A rapidly growing business area. Nordic wage levels, working conditions in many cases violated (TWAs = the worst and the best) Public employment services play a limited role … Maybe more important for the overall migration: Existence of networks: ’community of Poles’ Potential recruitment patterns concerning skilled third-country workers? University of Copenhagen

10. EURES IS Mobility Conference, May 30th 2008 How to reduce the lack of skilled key- workers? Encourage circular/return migration or immigration of EU workers and/or workers from outside the EU (brain circulation vs. brain drain) We should not forget other initiatives: Discourage early retirement Raise the legal retirement age Encourage part-time workers to change to full-time work Increase the number of legal weekly working hours (Encourage non-working women to participate in the labour market) These initiatives will target all groups on the labour market; from low skilled to high skilled workers University of Copenhagen

11. EURES IS Mobility Conference, May 30th 2008 Some questions on future trends Can we avoid the development of secondary labour markets in the Nordic countries? Brain drain, waste or circulation? To recruit skilled key-workers or highly skilled workers in developing countries; any dilemmas? ’Sustainable migration’! Cooperation between authorities in sending and receiving countries; on securing wages and social contributions; on education and training, etc