Labour market absorbs migrant workers

A year after opening its labour market to eight central and eastern European countries, around 26,000 workers have arrived in Austria, broadly in line with the numbers expected. Most are from Hungary, Poland and Slovakia, around 40% being cross-border commuters. A further 1,500 highly qualified workers from Bulgaria, Romania and countries outside the European Economic Area have gained permission to live and work permanently in Austria under the Red-White-Red card scheme.

Austria absorbs migrant workers well

Austria appears to have coped well after opening its labour market to workers from eight new central and eastern European Member States on 1 May 2011, according to data from the Federal Economic Chamber (WKÖ).

By the end of March 2012, more than 26,800 employees (less than 1% of dependent employees in Austria) from these countries had arrived to work in Austria according to data provided by the Federal Ministry of Labour, Social Affairs and Consumer Protection (BMASK). This figure corresponds to predictions made by the Austrian Institute of Economic Research (WIFO) and the Public Employment Service (AMS) (AT1105011I).

The New Austrians Media Service (Medien-Servicestelle Neue Österreicher/innen) reported that around 40% of the new workers are cross-border commuters. Most of the workers are from Hungary (12,156), followed by Poland (5,286) and Slovakia (5,078), and are employed in tourism, construction and the service sectors.

The tourism sector has particularly benefited from the influx of workers, according to the Institute for Advanced Studies (IHS). Tourism not only has the largest number of newcomers from the eight new Member States, but the employment of Austrians in the sector has also increased. The opening of the labour market, it appears, has not led to a replacement of workers, but has acted as a stimulus for growth.

A large number of immigrants who arrived after the opening of the labour market stayed for only a few months, according to a study by the WIFO. In the first eight months, around 58,000 migrants from the eight new Member States registered for employment in Austria. More than half of those unregistered again within a relatively short time.

New rules keep wage dumping in check

The introduction of new rules on social and wage dumping (AT1006011I, AT1105011I) is thought to have played a big part in the apparent success of the opening up of the labour market. Around 31,800 companies (with 72,000 employees) have been investigated in the first year, with only 526 companies (with 2,300 employees) suspected of wage and social dumping.

Complaints have been made against 160 companies, including 134 foreign-owned firms, and so far fines of €4.7 million have been levied. However, it has taken time to process the lawsuits, meaning that only six fines totalling €300,000 actually have the force of law.

Rudolf Hundstorfer, Minister of Social Affairs, Labour and Consumer Protection, says the Austrian government is happy that only 1.6% of all companies have had complaints made against them.

The opposition Green Party (Die Grünen) has, however, criticised the legislation which it claims is flawed. Birgit Schatz, Worker and Consumer Protection Spokesperson for the Green Party, says fines for foreign companies that refuse to disclose details of employees’ wages are much lower than fines for the underpayment of workers. She says foreign companies could choose to claim they do not have records so that the only course open to investigators is to impose the lower fine.

The Green Party is also worried about the problem of collecting fines. As yet there are no bilateral agreements with the eight new Member States that would make it possible to enforce administrative penalties levied on foreign companies.

Red-White-Red card

During the first year of Austria’s permanent immigration scheme, the Red-White-Red (RWR) card for qualified immigrants from Bulgaria, Romania and outside the European Economic Area, 1,522 applications (as of 27 June 2012) were approved and 399 rejected.

The scheme, implemented in July 2011, aims to attract well-qualified workers to Austria. Among the workers awarded the RWR card were 397 managers, 221 information technology technicians and 116 professional athletes, such as ice hockey players. The top six originating countries are all from eastern and southern Europe, with the exception of the United States in third place with 150 immigrants. Most RWR card-holders are from Russia (with 164), followed by Bosnia-Herzegovina (158).

The RWR card scheme consists of five different strands of labour immigrants (AT1107011I), with over 1,100 approved applications in the ‘key workers’ strand. A specific strand for skilled workers with professions in which there is a labour market shortage in Austria is to be implemented this summer. This strand had initially been suspended for a year due to the expectation that the shortage might in part be met by the influx of workers expected after the labour market was opened to the eight new Member States.

The specific fields in which there is seen to be a shortage of labour is due to be announced by the BMASK, with 25 suggested professions under review. Minister Hundstorfer has said he expects around 500 workers to move to Austria under the new rules.

There has been criticism from the Austrian Association of Towns and Cities (Österreichischer Städtebund) that neither certified nor unskilled assistant care workers have been included in the list, even though an increasing need for them has been predicted.

The minister’s response has been that certified nursing staff can already gain access to the Austrian labour market through the key workers’ strand of the RWR card scheme, and he says there have never been problems finding assistant care workers.

His stance is supported by the services union vida which opposes the inclusion of care workers in the list, arguing that instead of seeking cheap immigrant labour, more funds should be allocated to the public care system.

Bernadette Allinger, Working Life Research Centre (FORBA)

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