Friday, July 6, 2007

Skilled Labour In Eastern Europe

This in the IHT today:

Skilled workers leaving Eastern Europe in droves

VIENNA: Slovakia could soon become the world's biggest car producer per capita - if it can find enough skilled workers to assemble the vehicles.

Slovakia was one of the eight formerly Communist countries that joined the European Union three years ago. Since that time, engineers and architects, nurses and computer technicians have been leaving in droves, seeking better pay and opportunities in Western Europe, according to a report issued Thursday by the Vienna Institute for International Economic Studies.

Now, having carved out a niche in car manufacturing in recent years, Slovakia is suffering from the same regional labor shortage that is exacerbating concerns that foreign investment could be deterred.

The shortages have become so acute that several countries, particularly Poland, are issuing special work permits to citizens from Ukraine and Belarus, Uzbekistan and Tajikistan in an attempt to plug the holes, according to the institute.

Last month, officials from the Polish Labor Ministry even traveled to India and China to recruit young skilled employees after repeated complaints to the government from the electronics, technology and construction sectors that they could not find enough staff.

"Lack of skilled labor is reported for most countries in Eastern Europe," according to Sandor Richter, one of the report's authors.

"Large numbers of workers have left for Western Europe, attracted by higher wages," he added.

The problem is particularly acute in the automotive industry in the Czech Republic and Slovakia, but it also affects segments of such high-skill service occupations as health-care personnel, architects, civil engineers and Internet technology experts, he said.

In 2003, the Czech Republic began a program, appropriately called Selecting Qualified Workers From Abroad, which entails offering permanent residence permits to those who have lived and worked in the country for two and a half years.

Poland said last month that it was introducing a similar program.

It is even considering using convicts or former convicts to help in major infrastructure projects, like roads and soccer stadiums, as it starts preparations to become co-host of the 2012 European Football Championships.

A labor shortage is also affecting one of the newest member states, Romania, which joined the EU last January.

Governments in the region are concerned that the dearth of skilled labor could slow down foreign investment, which has helped fuel strong economic growth rates, according to the report's authors.

Such growth has spurred consumer spending and financial services, and they, in turn, have boosted the construction industry and demand for housing. But Leon Podkaminer, a Polish economy expert at the Vienna Institute, said the construction industry both in Poland the Baltic states was unable to cope with demand because the industry had too few workers.

"Nearly every second construction firm in Poland is unable to fill its vacancies," the Vienna report estimated.

Experts at the institute said that employers in the region were now blaming labor shortages "as being the limiting factor on the expansion of production."

Economic growth has helped to reduce unemployment, which averaged 10.3 percent in 2004 and, according to the institute, will decrease to 8.7 percent this year and 8.1 percent in 2008.

Yet the kind of workers industry is seeking, both skilled and unskilled, are not available from among the unemployed.

"The new EU member states have a significantly smaller proportion of people with low levels of education as well as a lower proportion of people with the highest levels of education," the report said.

The labor shortage accelerated after a few EU countries, including Britain, Ireland and some Scandinavian countries, abolished barriers for workers from the new member states as soon as they joined the EU in May 2004.

An estimated 800,000 Poles work in these countries now, and tens of thousands from the Baltic States of Latvia, Lithuania and Estonia have joined this new wave of migrants.

Most of the governments in the region are reluctant to increase wages, concerned that companies would lose their competitive advantage over their West European counterparts. They also want to keep inflation under control. Slovakia, for one, wants to adopt the euro by early 2008, which means adhering to strict EU economic and budgetary criteria.

Still, desperate to attract or retain their own employees, the Polish construction sector has started to increase wages, and workers at the Skoda car plan in the Czech Republic recently went on strike for higher pay.

No comments: