The labour market in Europe is becoming flexible and open, but social security is still closed in national boundaries. Less-developed countries are suffering because of emigration of the labour force and losing employees to more-developed countries. Rising costs for social security per capita in less-developed countries undermine the national business. At the same time social security in less-developed countries suffers because of a lack of resources. How can this dangerous vicious cycle be changed?
This is going on in the EU, too, as people of working age migrate from the poorer to the richer member states. So, there are fewer contributors to pension systems in the home countries but the number of pensioners there remains the same.
Hi Arvydas,
I'll try to make a contribution to the discussion if no one is against. I'm not sure about the EU opening to globalisation, there are restrictions to migration from 3rd countries in a number of countries. For example, in the Czech Republic the rules have become stricter in the recent years which lead to a decrease in foreigners from 3rd countries (nowadays the share of foreigners is ca. 4%).
I guess the target countries are usually the richer ones, Germany, France, U.K., Italy. Do the Baltic states experience a big inflow of people from abroad? Probably, from the CIS?
Anyway, it seems that right-wing parties are taking "control" in several countries, most notably France and the UK, so one can expect tightening of the rules for immigration. This can be a temporary solution. I guess there are only two ways for developed countries - stricter regulation or less-benefitial social system.
Developing countries show some improvements too. China continues to develop its pension system (they lacked it 20 years ago), I guess other will catch up with speedy economic growth. What can developed countries do to help them? One way is to increase foreign aid (ODA and other). The other - to increase foreign direct investment - this will create more jobs and increase the catch-up process. See the success of China. This is an economists' answer.
Best regards,
Ilya
Do not forget to incorporate the money transfer of migration workforce to home countries. In some direct comparissions between an EU memberstate and a foreign country this is an essential part of the trade balance.
The answer to why is that richer countries benefit. While poorer countries are stricken by the crisis, Germany that suffers and ageing population is happy to let them in.
Freedom of movement benefits growth in the EU as a whole, but not necessarily component countries. The financial crisis is probably benefitting the nordic countries more in this sense, as the young move up for work creating the spiral you mention in poorer ones.
The point is that the EU has liberalised the market internally but not introduced a system of transfers to match, no social security compensations as in regions within countries. We have an economic union, but not a social or political one.
As this benefits the EU as a whole and the most powerful countries, there is no pressure to address the problems of the poorer.
I would not fully agree with the statement that “social security is still closed in national boundaries” from a purely “EU Law” view-point, therefore, I have felt the urge to contribute to this debate with insights from EU law on social security coverage in Member States other than the State of citizenship.
EU Law appraises the issue of Social Security in the framework of free movement of workers, which makes part of the so-called ‘internal market’, which is in turn one of the fundamental freedoms that shape the core of the integration process. Anything that would discourage a worker from migrating to another Member State (eg. Losing social security rights) would represent a threat to free movement and is thus tackled by the EU. However, the EU wields no exclusive competence in this matter, but shares it with the national level. Therefore, measures in this field are generally adopted by the Council on a unanimity basis, with sole consultation to the Parliament (currently, art. 21.3 TFEU), unless these measures refer to social security of migrant workers, which is codecided by both the EP and the Council (art. 48 TFEU). Basic rules on social security coverage in other Member States than the one of the nationality encompass Regulation 883/2004 (and its implementing Regulation 987/2009). I believe the four core principles introduced by these norms are worth recalling: a) equal treatment, ie. the right of migrant workers to unconditionally apply for SS under the same conditions as the nationals provided that certain conditions are met (essentially, the equivalence of benefits between the Member State of origin and of residence); b) aggregation of periods, ie. periods of insurance previously satisfied in the Member State of origin migrate with the migrant worker, so that the Member State of residence must take them into consideration when calculating the moment when the migrant worker will be entitled to eg. a pension; c) prevention of fraud, in the sense that the migrant worker cannot be entitled to the same benefit in two Member States at the same time; and d) exportability, once the migrant worker is entitled to a specific benefit, it can be paid in whichever Member State (this principle applies notably to retirement pensions, but not to the dole).
"....social security is still closed in national boundaries......": No, it is not. MB (Hi, Mr. Casey, nice to learn that Warwick benefits from your Expertise. I trust this find you well!)
Dear Arviydas, This is quite natural social phenomena where emigration of people from lower income to higher income countries. We can not change this. Rather we can cooperate and manage among regional grouping of countries in order to minimize social impacts from influx of people or labour.
Ross, the difference between aspiration and reality is great. from Ottawa, all might look rosey. I have state pensions accrued in several member states but even working out what these will be worth is a nightmare. and I'm supposed to know something about it.
Some of you say that social security is not confined to national boundaries, because we can cover things across boundaries etc. But what the question talks about is other social support in my opinion. It is financial transfers between Eu countries, such as unemployment benefits, social assistance for housing, etc. The lack of a strong 'social' transfers to poorer countries accelerates the migration to richer countries. No budget equalisation mechanism in other words.
All in the hands of every individual and it should be given to choose the model he wants. Offers a selection of social investment model of public relations.
Can be changed. If you read Russian, then look at: https://www.facebook.com/ohrzdrav b http://www.group-global.org/ru/advice/view/1565
http://group-global.org/ru/page/view/562.
This requires the investor. e-mail: [email protected]
Dear Ilya Bolotov,
No, dear Ilya, Baltic states do not have immigration nor from CIS, nor from other countries yet. Latvia and Lithuania have only emigration,mainly to Western Europe. This is a matter that Lithuania in 15 years lost 800 hundred thousand of inhabitants because of emigration and population decreased from 3,7 mln. to 2,9 mln. It is for You hard to believe, but this is reality. At the same time Lithuanian old age pensions on average do not reach 300 euros.
Yours truly,
Arvydas Guogis
Yes, Arvydas, this is a fact, but this migration benefits the richer countries, this is why it goes on. We do not have a transfer union with some sort of fiscal equalisation to ensure that EU citizens are treated similarly, at least in real terms.
Pensions in CEECs are a misery due to rapid rise of costs of living. Several Greek cases and worse have been created in the last decades, but because citizens of CEECs are used to it there is little complaint.... while Greeks are the main group of tourists (OK after Russians maybe) in Bulgaria which despite the crisis they still can afford to visit for tourism. Bulgaria is another country in ruins with very low pensions and that lost around a million inhabitants, but I think they lost count...
Arvydas gets it
although, of course, there is the chain of Poland > Germany and, perhaps as a consequence, of Ukraine > Poland with respect to social care workers, which makes me wonder what happens in Ukraine (present circumstances excepted)
When I read my emails I am unhappy on how poorly they express what I want to say. OK, to summarise: a) Yes, you can carry your social security rights to other countries, but b) there is no fiscal equalisation system of transfers. So Germany does not pay for Bulgarians to have a good pension, medical system or for unemployment benefits in Bulgaria, in the way that Bavaria contributes to the Eastern Länder. We have fiscal equalisation systems supporting the social security between regions within countries, but not across EU countries. So if you are unemployed in a CEEC, you would prefer to work and even be unemployed in Germany.... so you go away. Simple. So yes, social security systems are therefore "closed" inside countries: even if rights are transferable - costs are not.
Jorge - you need to have a look at some work by Paul Bridgen at Univ of Southampton. I heard him presenting on it the other day. The title was "the financial pull of home: intra-EU migration, pension regimes and the feasibility of staying put on retirement". I'm not saying I agree with what he was doing/his outcomes, etc . but ...
See https://www.westminster.ac.uk/__data/assets/pdf_file/0009/308628/PRN-Workshop-Programme-23-May-2014.pdf
It is unclear what you mean by "social security still suffers from a lack of resources". It is unclear to which counties you refer to. But, in The Netherlands, I would say "social security", as generally understood is reasonably good, though the present government is trying to push the notion of "participative society", which means suggesting that family and friends should also lend a hand to the less fortunate.
Dear Phil Barbonis,
It is written in my question explanation to which countries I refer. To be more precise, I refer to less developed new EU Eastern European countries, which have big emigration, but low social security benefits and services.
Yes, I see. But, I have misinterptreted you. You began a new sentence, which meant you were moving away from EU countries and was referring to countries not in the EU. My error in interpreting. Apoogies are in order..
I have no idea how to change as I am not a politician. But, I woud say this: these countries must rapidly industrialize, start producing goods here in Europe instead of EU manufactuers moving to China to produce goods because of low labour costs there. However, even in China, costs are rising because of the blind-sighted one-child policy that has led to fewer workers being available. Some Chinese firms are moving to India which has labour in abundance. The question is whether the less developed European countries will be attractive to manufacturers to move their production to these countries. I think not. I wonder what readers think.
of course, if the one child policy was responsible, why did the fall in fertility rates preceded its introduction and why are similar falls in fertility rates observed in the RoC, Hong-Kong, Japan and Korea, where there was no one child policy?
Hello Mr Casey
It is unclear to me what the thrust of your comment is? Are you saying that the one-child policy alone is not responsible for the phenomenon we are seeing in China? I think this is really an apples and pears issue. If you are suggesting by citing RoC, HongKong, Korea, Japan as examples, where presumably there were no official one-child policies in whatever flavours, that the one-child policy had no effect on China’s slow population growth, and that other issues were at play, I am afraid, I will have to differ, in regards to the People Republic of China.
Why I think, as indeed many observers have remarked, there has been a consistent decline in China’s population growth since the one-child policy came into effect in 1978, can be seen from the data I present. Here are some numbers with year and birth rate (per 1000). As you can see the TFR consistently declined from 1987 to 2013. The expected TFR (Total fertility Rate) should be about 2.0, where TFR is the average number of children born to a woman during her possible child-bearing or fertile years.
Years
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
- Birth rate per thousand
21.04 (1985)
22.43
23.33
22.37
21.58
21.06
19.68
18.24
18.09
17.70
17.12
16.98
16.57
16.03
14.64
14.03
13.38
12.86
12.41
12.29
12.40
12.09
12.10
12.14
11.95
11.90
11.93
12.10
12.08 (2013)
(Apologies; horizontal data could not be shown vertically... you can still see a negative gradient)
At the same time, in China, urbanization has been well underway with 23.7% of the population becoming urban dwellers in 1985, to a high of 54.6% in 2014., which fact could also have contributed to low birth-rate. One-child policy meant female babies were aborted bringing about an imbalance in the sexes. Girls growing up in one-child families with two sets of grandparents doting on them tended to get almost everything they wanted. Such girls, as I understand from some female Chinese students who I have taught, had aspirations for higher quality of life, and would not contemplate marrying a person who was in no position to have a house, a car, and a healthy bank balance. At least three of my previous female Chinese students have very good jobs and one has her own business. Some of my male Chinese students pointed to the difficulty of finding marriage partners as there were far too little girls and that they had to continue to staying with their parents so as to save hopefully enough money for that future, elusive, wealth-seeking girl (marriage partner).
Taking the other countries you cite, while there were no official one-child policies in these countries, many more women had education, aspired to careers which also affected child-bearing intentions, or postponed motherhood which became difficult as these women went past the age of 30-34 years, or just postponed marriage, which finally did not take place at all. Another factor hinged on the fact that as women got educated they wanted partners who were just as well qualified as they were, while men eschewed better “educated ” women as wives. Unlike in the west, in Asia, conceiving and raising a child outside of wedlock was totally unacceptable to the family and to the community, leading to "loss of face" and in Moslem countries such women would be stoned to death for adultery, as has been reported just a day or two ago, of the case of an Afghan girl who was stoned to death.
I would argue that the one-child policy has contributed in large measure to a lower workforce in China, which fact in its turn also directly or indirectly, triggered a whole range of sociological problems, while in other countries that you mention, sociological factors, quite unrelated to one-child policy have played a significant role. To close, Singapore has had a two-child policy for more than a generation, and that fact coupled with girls being encouraged to pursue higher education, has unleashed in that island republic similar sociological tendencies, with the TFR dropping to low as 0.8 just two years ago; 0.8 is one of the lowest or the lowest in the world. The Singapore government is now trying to raise birth rates by giving child-bonuses, the magnitude of which can run up to as much as S$ 190,000 per family (Euro 124K, US$133K, GBP 89K). So much for social engineering in China and in Singapore!
what you need to do is to go back to before 1979 then compare data for pre 1979 to data for post 1979. Then you'll see what I mean.
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