EU job market squeezes Slovakia
Western Europe’s building sites are full of East Europeans. And Tibor Machuga has a problem. “You’d have to be a magician to find workers round here,” he tells me at his concrete factory in Michalovce - a small town in the far east of Slovakia.
He wants to take advantage of Slovakia’s building boom and has a contract to work on an EU-funded project strengthening Slovakia’s eastern border with Ukraine. But Slovakia’s membership of the EU is the source of his problem. His workers have gone west in search of better jobs and better wages. “We have increased the workers’ pay and if our employees bring a new skilled worker into our company, we give them a bonus to try to motivate them. We’re really short of people,” he says. Like bosses in western Europe, Machuga is looking east to fill his labor gap. Slavomir and Mikulas are from Ukraine and they are his godsend. “We’d only earn about half as much in Ukraine as we earn here,” they grumble. “And here they pay you properly, every month. In Ukraine they promise they’ll pay you and then they don’t.”
Slavomir and Mikulas belong to an ethnic Slovak minority in Ukraine, which gives them special working rights inside Slovakia. But most Ukrainians are not allowed to come and find their fortune. There are strict quotas on work permits and Machuga says it is time-consuming and expensive to do the paperwork. “There is a great interest by Slovak businesses to employ people from Ukraine and Russia and in fact it was much easier before we joined the EU,” says Vladimir Balaz, a research professor at the Slovak Academy of Sciences who specializes in migration. “For 2007 there were only 200 permanent work permits granted to Ukrainians. The Slovak construction industry badly needs Ukrainians who worked here in the past, but can’t bring them now because of visa barriers.” But it is not just small businesses like Machuga’s, which are feeling the pinch.
The Volkswagen plant outside Bratislava spreads over a massive campus. Inside, workers in sparkling white overalls assemble Polos and Touaregs for the world market. Slovakia has won a reputation as the Detroit of the East and is home to VW, Peugeot and the Korean firm Hyundai among others. They were attracted here by the skilled and cheap workforce and investment has helped to slash the stratospheric unemployment that Slovakia experienced at the start of the decade. “When I came here I found real security - you get paid on time, I travel from about 70 kilometers away and my transport is subsidized by the company - it’s a good job and a good company,” says Martin Horvath, who has been at VW for five years. But Martin and his colleagues are becoming something of a scarce commodity. They can easily find well-paid work in the West and there are more and more investors jostling for position in Slovakia, demanding their skills.
Many major international firms have started bringing in workers from countries further to the east. VW insists it is still committed to using mainly Slovak workers, but has started a small pilot project bringing Bulgarian agency workers to the plant. “There’s an imbalance on the labor market and we’ve been preparing for this, working with specialist colleges to train students,” says Juraj Kiripolsky, head of personnel for VW Slovakia. “We keep up with wage developments and offer our workers a social program, like transport, accommodation and other benefits. And we’ve also started this pilot project because we have to think of the future”.
In the coffee shops around Bratislava’s technical university, VW’s potential experts of the future are in the midst of a heated debate about whether they will stay in Slovakia or - like a third of Slovakia’s current graduates - seek work abroad. “The opportunities in some fields are much better abroad, I’m studying biomechanics and if I go to the European Union there are more possibilities to work and learn something new - and money is also important," says Andrea. I won’t leave my country. I think it’s important to stay. I want to help improve the Slovak economy and here - at least around Bratislava - you can earn pretty well,” says Martin.
For Slovakia’s employees, at least, EU membership seems to be working well. They can now go and sell their skills to the highest bidder in other member states, and wages at home are creeping up, bringing them closer to the European norm. But as conditions improve for the workers, there are fears that investors will decide it is time to move on. And if they do, there is no doubt in which direction. Further East. (BBC)
SUPPORT THE BUDAPEST BUSINESS JOURNAL
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.