President Macron: EU labor rules on employment abroad creating a “race to the bottom”
The French president Emmanuel Macron is campaigning for an overhaul of current EU labor rules concerning employment abroad, arguing that this would protect workers in wealthier European nations from the negative effects of cheaper labor stemming from the bloc’s eastern members.
Macron has pledged to challenge the EU’s posted workers directive in its current form, under which so-called “posted workers” (those sent by a company in their home country to temporarily work in a second EU nation) are guaranteed the host country’s minimum wage, but continue to pay taxes and social charges in their home nation.
Although such workers only represent a small fraction of the EU’s total workforce, critics of the system contend that it gives Eastern European service providers an unfair advantage over those from Western European countries because their social security costs are lower.
In addition, wage requirements for posted workers are often more competitive. This is due to the fact that although they must earn the statutory minimum wage, posted workers often earn less than wages guaranteed by collective agreements between unions and firms.
Raising his concerns with several leaders during his first diplomatic tour of Central and Eastern Europe this week, the French president labelled the set of rules a “betrayal” of the European spirit in its essence, saying that “the single European market and the free movement of workers is not meant to create a race to the bottom in terms of social regulations."
Macron is set to meet with the leaders of Romania and Bulgaria during his three-day visit to the region, having already made headway with his counterparts in Slovakia and the Czech Republic, who backed elements of his proposals.
However, it is anticipated that he will face staunch pushback from Poland and Hungary, who have already made vociferous challenges to proposals to review the directive. Poland is the largest source of posted workers, with around 300,000 to 400,000 a year.
In his article Do immigrant workers depress the wages of native workers?, Giovanni Peri argues that the belief that immigrants “take jobs” is often “rooted in a simplified, static model of labor demand and supply in which immigration increases the supply of some workers while everything else in the economy remains fixed.”
He continues that “most studies for industrialized countries have found, on average, no effect on the wages of native workers [who have] been insulated by differences in skills between native and immigrant workers, adjustments in local demand and technology, expansion of production, and specialization of native workers in response to rising immigration.”
Read more articles about migration policy.
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