In the US we have lots of debate these days on whether
people should be allowed to enter freely from Mexico and other neighboring
countries. The concerns have to do with how this movement of people will affect
US jobs. Of course we are not the only
country grappling with these issues.
A Sept. 16 article in The Economist described how
many workers from the small country of Serbia are heading for Slovakia to get
temporary employment there. The number
of Serbs looking for jobs in Slovakia has risen by more than 60% since January,
according to this article (see below). These Serbian workers are motivated by
high unemployment rates back home in Serbia and very low pay for the few jobs
that can be found there.
Slovakia is also a small country in population and it faces
a labor shortage. A major reason why Slovakia has a shortage of labor is
because it is a member of the European Union: This means Slovakians are able to
go to other European Union member countries like Germany and Austria for
high-paying jobs. So Slovaia has been losing workers who move to these
countries. Meanwhile, Serbians are attracted to moving to Slovakia for the
available jobs and the better pay than they would get back home.
This seems like a win-win situation for Serbian workers
needing jobs and Slovakia’s economy which needs workers. The labor shortage in
Slovakia had caused wages to rise. But some of the locals in Slovakia are
complaining that the Serbians who move there for work are causing wages to decrease
because the Serbs are willing to accept lower wages and the arrival of the
Serbs means labor is no longer in short supply. The complaints of this group in
Slovakia are similar to the complaints of auto industry and other factory workers
in the US who resent the arrival of workers from abroad who they believe may be
taking factory jobs for lower wages and so keeping wages low.
I believe this debate should focus on whether more people
are better off in both countries. Allowing the unemployed Serbs to take up jobs
in Slovakia means Serbia’s unemployment rate is not as high. It also means that
the Slovak economy can get the labor it needs at lower wages, which means that
Slovak consumers will have cheaper prices to pay.
I see the point the locals in Slovakia are making, but I disagree with them. This situation can be paralleled to the current situation the United States is going through regarding the immigration of Latin Americans for more opportunities. There have been ample studies done to analyze the impact this has on our economy and many have concluded it has little to none. The immigrants that are working for a lower wage than the previous equilibrium level are typically those with lower education, which will only impact the jobs targeting at low-skilled workers. Although immigration may affect the low-skilled job market, it also brings more demand to the economy which will eventually increase the demand (and potentially the wage) of middle to high skilled jobs. I am curious on the jobs (and the wages) that the Serbians are taking in Slovakia, the demographics and political situations in Eastern-Europe could play a big role in determining the effects of this flood of immigration.
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