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Ifo: Gaps in the labor market closed by EU expansion to the East

Photo: EU flags (archive), via dts news agency

Dresden (dts) - Employees from the accession countries to the EU's eastern expansion in 2004 have filled gaps in the German labor market. This emerges from a study published on Tuesday by the Ifo Institute in Dresden.

Exactly 20 years after joining the EU, around 820.000 employees from these ten countries now work in Germany. That’s 2,4 percent of all employees. “Contrary to what many feared, this did not lead to the displacement of German employees from the labor market,” said Joachim Ragnitz, deputy head of the Ifo Dresden branch.

“People from the Central and Eastern European accession countries work primarily in sectors and professions that are not very attractive for local workers due to low wages or unfavorable working conditions.”

In 2004, the free movement of workers for Eastern Europeans was restricted in most EU countries. This was only lifted in Germany in 2011. Ragnitz added: “The contribution of employees from these countries to covering shortages in demanding jobs is currently quite low. This may have something to do with the fact that people with higher qualifications also have good labor market opportunities in their home countries and, if in doubt, are paid above average there.” But many of the employees from these countries did not even have the corresponding qualifications.

Employees from the (Eastern European) accession countries are therefore unlikely to be able to cover the future increasing demand for skilled workers in the coming years. According to Ifo, 48 percent are currently working as specialists, 42 percent as helpers and five percent each as specialists or experts. The median salary across all nationalities and employment groups is only 2.580 euros per month, while the average for all employees in Germany is 3.650 euros per month.

The employees from the accession countries in 2004 are concentrated in transport and logistics companies (14 percent), in temporary work (eleven percent) and in the construction industry (eleven percent). Their share is disproportionately high in more demanding service professions, in retail and in the hospitality industry.

65 percent of the 820.000 employees come from Poland. They are more or less evenly distributed throughout Germany, with a focus on the districts along the German-Polish border and in some regions of northwest Germany characterized by agricultural production. Their share of all employees is 12,3 percent in the city of Frankfurt/Oder and 12,0 percent in the Teltow-Fläming district south of Berlin. The second largest group is made up of employees from Hungary at 14 percent. This is followed by employees from the Czech Republic with 8,4 percent. The proportion is particularly high in the districts of Tirschenreuth and Cham near the border (12,6 and 13,2 percent, respectively).

On May 1, 2004, Poland, the Czech Republic, Hungary, Slovakia, Slovenia, Estonia, Latvia, Lithuania, Malta and Cyprus joined the EU.

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