15 January 2006

Immigrants influx puts jobs issue in spotlight

Sunday Business Post

By Paul T Colgan
15 January 2006

Immigration into Ireland stands at a record high. During the year to April 2005, 70,000 immigrants, mainly from eastern Europe, came to the Republic, the vast majority of them seeking work.

Of these, 26,600 arrived from the ten new EU accession states. The single largest group of people came from Poland - 11,900 in total.

Immigration figures are not to be confused with those released before Christmas regarding asylum seekers. The Minister for Justice, Michael McDowell, has announced that the number of people seeking asylum in the Republic now stands at its lowest since 1998.

McDowell reported that 4,323 people, mainly from countries such as Nigeria, Somalia, Romania, Sudan and Iran, had sought refuge in Ireland last year. He said that 393 people had been deported in 2005, while another 208 were sent to other EU countries.

It is the unprecedented influx of migrant workers to Ireland in recent years, however, that is poised to radically change the basis of the economy. The recent comments by Labour leader Pat Rabbitte about migrant labour has refocused public debate on immigration, particularly from eastern Europe.

Rabbitte claimed that it might be necessary to impose a permit system on workers from the new EU states, in order to prevent what he called, job “displacement'‘.

“There are 40 million or so Poles, after all, so it's an issue we have to look at,” said Rabbitte.

He said displacement was not restricted to the ferry industry, as seen in the Irish Ferries case, but happening across a range of sectors. “Displacement is going on in the meat factories, it is going on in the hospitality industry, and it is going on in the building industry,” he said.

While the Labour leader has been accused of playing the race card, it is nonetheless the case that many commentators and analysts claim the vast majority of non-nationals working in the Republic are in low-paid, unskilled positions traditionally held down by locals.

With the good times seemingly set to continue - at least in the short term - the issue has yet to hit home with most Irish workers. Many who in the past would have been forced to accept low-paid positions now find themselves in reasonably well-remunerated work. It has been predicted, however, that if high levels of migrant workers continue to make their way into Ireland and the economy went through a downturn, it would be the native Irish workers who find themselves on the dole queue.

Analysis carried out last week by Ulster Bank economist Pat McArdle suggested that last year's disappointing tax take was due to the large numbers of low-paid migrant workers.

The unions have been exercised by claims of job displacement, and say the government has been slow to react to what is a very real experience for many Irish workers.

“We were told last year that we were imagining things,” said a spokesman for the Irish Congress of Trade Unions.

“Then the Irish Ferries situation came along and crystallised what was going on in one fell swoop.” Union organisers claim that examples of job displacement across a wide range of sectors fall on their desks on a daily basis. They claim that foreign workers are being paid well short of agreed rates, and that the practice is not restricted simply to the unskilled sectors.

Union sources said displacement was affecting white-collar workers, and spoke of Irish finance companies scouring eastern Europe in a bid to find replacements. If what they claim is accurate, then the issue of displacement looks set to run and run.

Last November, the ICTU stumbled across a widely distributed e-mail from a Polish recruitment company called Kontakt. The company offered to help employers, who wished to avoid adhering to Irish pay agreements, by having Polish workers registered in their home country.

The e-mail said: “We can employ them [Polish workers] and send to you as our employee (leasing workers). We pay taxes and insurance in Poland.

“They can work for about €4.70 per hour.”

The e-mail went on to note that the company also represented “doctors, dental surgeon, obstetricians, dermatopathologists, nurses, structural engineers, electrican [sic] engineers, technicians, software engineers, programmers, civil engineers, chefs, etc'‘.

According to the ICTU, the e-mail is evidence of a much wider trend - one which they claim could become law if the EU Services Directive is passed in its current form.

While the unions claim foreign workers are being exploited by Irish employers, not all migrants necessarily work in the low-paid sector.

Moreover, their presence in Ireland is crucial to ensuring the long-term health and potential of the economy.

According to Davy Stockbrokers, incoming workers are not being forced into poorly-paid employment.

In the case of the construction industry, they are actually benefiting from wage inflation.

“It is hard to believe that wage growth would have been as strong as it was in construction - 9 per cent year-on-year on average in Q1-Q3 - if foreigners were being taken on at low wages, particularly since employment growth in that sector was so healthy,” said Rossa White, analyst with Davy Stockbrokers.

About 45,000 migrant workers found employment last year. According to Davy's figures, more than 10,000 of them ended up in construction and another 10,000 in industry and agriculture. The remaining 25,000 secured jobs in the services sector.

The analysts at Davys maintain that continued immigration is required to keep the economy growing. White said, that while the increased numbers of migrant workers had been blamed for exerting downward pressure on wages, they had “helpfully kept wage growth contained at 5 per cent'‘.

“If our borders were closed, last year's labour force growth would have been cut in half,” he said. “The labour market would now be very tight, output would be constrained and the situation that existed in 2000/2001 may have re-occurred, when rapid wage inflation led to overheating and a surge in consumer price inflation.”

While the Minister for Enterprise, Trade and Employment, Micheál Martin, has made clear the continued need for new workers, the unions believe that the government has nonetheless changed its attitude to job displacement.

“The government and many employers have shifted their stances, and this has to be welcomed,” said an ICTU source.

“We have moved from a situation where we had non-existent enforcement, to one where the government has accepted that it has to address the issue seriously. The mindset has changed.”

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