New figures published in June 2006 show that migration of individual job seekers from the eight new EU Member States of central and eastern Europe into Norway has continued to increase two years after enlargement of the European Union. At the same time, the provision of services by foreign companies, or Norwegian companies employing foreign workers, is becoming the most significant form of labour mobility into the Norwegian labour market. The social partners have expressed concerns about the implications for wages, working conditions and competitiveness.
New figures from the Norwegian Directorate of Immigration (Utlendingsdirektoratet, UDI) published in June 2006, show that migration of individual job seekers to Norway from the eight new EU Member States in central and eastern Europe (i.e. not including Cyprus and Malta) following enlargement of the European Union in 2004 has continued to increase over the past two years. Meanwhile, different statistical sources indicate that the provision of services by foreign companies, or Norwegian companies employing foreign workers, is becoming the most important form of labour mobility into the Norwegian labour market.
Individual labour migration
Transitional arrangements require individual job seekers from the new Member States to apply for work permits to work in Norway (NO0509103F; NO0604029I). The figures show that the majority of workers entering the Nordic labour market choose Norway as their destination. From 1 May 2004 to 31 December 2005, some 36,276 work permits were granted to workers from the new Member States in Norway. This contrasts with 6,691 in Denmark, 4,485 in Finland, 3,279 in Iceland and 8,768 in Sweden. In addition, 21,460 permit renewals were issued in Norway during the same period.
Most of the workers come from Poland – more than 23,000 people in 2005 – and from the Baltic states, particularly Lithuania. Moreover, the number of workers entering the Norwegian labour market is continuously increasing. Whereas less than 2,500 permits were awarded in January 2004, this number had risen to almost 13,000 permits by January 2006. Approximately 75% of the migrant workers are men.
Figures from Statistics Norway (Statistisk Sentralbyrå, SSB) indicate that most of the workers coming to Norway are hired in the construction (27%), agriculture (16%) and manufacturing (11%) sectors, but the use of subcontractors and hired labour is also on the increase in other parts of the Norwegian economy.
Service mobility
Since EU enlargement, the regulation of free movement of services has generated considerable debate. Few national statistics are available in this area, but statistics from a variety of sources have been gathered in a recent report by the research institute Fafo. Although no exact figures are available on the number of workers being stationed or posted in Norway by foreign companies, indications suggest that the number of such workers actually exceeds that of individual migrants coming on their own initiative.
A 2006 survey carried out by Fafo also reveals that Norwegian companies are more prone to subcontract or hire the services of other companies, foreign or Norwegian, than to employ individual workers from the new EU Member States.
Commentary
The data available for both individual worker migration and services mobility suggest that the influx of workers from the new EU Member States to Norway has been substantial since EU enlargement in May 2004, at least when compared with the other Nordic countries. One important reason is a continuing demand for labour in important sectors of the economy, particularly in the construction industry.
Increasing labour immigration has given rise to controversy in relation to the monitoring and regulation of wages and working conditions in Norway. On the trade union side, the most important issue has been that of preventing ‘social dumping’ and thus preventing large-scale immigration of workers from undermining the national system of collective bargaining and wage formation.
The employer side, on the other hand, is more divided on the issue. Workers from eastern Europe are welcomed, particularly in those sectors of the economy experiencing labour shortages. However, a number of smaller Norwegian companies fear the competitive imbalances generated by such immigration, particularly between companies with and without collective agreements.
In light of increasing individual worker migration, the national authorities have decided to continue transitional arrangements. In order to meet the challenge of freedom of movement of services, the possibility to extend collective agreements was invoked for the first time in the construction sector in 2005 (NO0509103F), and has now been made applicable to large parts of the industry. The regulations are currently under review and may be changed in some form. Moreover, national regulatory authorities have received increased funding to monitor workplace developments.
References
Dølvik, J.E. (et al), EU-utvidelsen: Endringer i norske bedrifters arbeidskraftsstrategier?, Fafo-notat 2006:14, http://www.fafo.no/pub/rapp/10004/index.htm
Friberg, J.H., Individuell arbeidsinnvandring. Utfordringer to år etter EU-utvidelsen, Fafo-notat 2006:07, http://www.fafo.no/pub/rapp/796/796.pdf
Håvard Lismoen, Fafo Institute for Applied Social Science