Address by Minister for Labour Affairs, Tony Killeen T.D., at a Seminar on ‘Migration of Workers in the EU – Economic, Social and Legal Issues’

On Wednesday 8^th March 2006

Introduction

Ladies and Gentlemen, I am very pleased to be here today to open this seminar and to speak briefly about Ireland’s economic migration policy and our recent experience of inward migration, since we opened our borders to the 10 new accession States in May 2004.

Because our economy and labour market are performing very well, the story is a good one.

Full opening of Ireland’s labour market

On 1 May 2004 Ireland fully opened its labour market to the nationals of the 10 new accession states. The Government’s decision on this was enshrined in the Employment Permits Act 2003 which was created in April 2003.

Since then nationals of these states are free to come to Ireland to work or reside without restriction or prior permission. They have an unfettered right to come to work in Ireland and to change employment as circumstances or opportunities arise. This is undoubtedly the most liberal and open door system in the EU.

The only requirement for entry into the labour market is the need to arrange a personal public service or PPS number for social insurance purposes. This is a universal requirement and applies to both Irish and non-national people working in Ireland.

In recognition of the fact that it is important that those nationals coming to work in Ireland to prepare and plan adequately prior to arrival, FAS – which is the national training and employment authority in Ireland - provides a free employment service for all EU nationals and it is implementing a number of specific programmes to help address the needs of arriving migrant workers.

FÁS Know Before You Go Initiative

FÁS launched an initiative known as “Know Before You Go” in December 2005, to assist  the  European Community ’s citizens coming to work in Ireland from the ten new Member States. It aims to encourage people to equip themselves with all the necessary documentation and information they need to ensure that they understand Irish labour laws and are aware of  how and where to get help from support agencies in Ireland.   In order to  raise awareness of employment rights, statutory entitlements, taxation and social welfare systems in Ireland, FÁS has produced a DVD in the Polish, Czech, Latvian, Lithuanian and Slovak languages and a suite of brochures and posters are also available in all ten languages.  FÁS has also developed a free telephone interpretation service, which is available in all FÁS Employment Services Offices nationwide.

At the time of Accession major business organisations in Ireland were informed and indeed enjoined of the Government’s expectation that skills shortages in Ireland would be met by workers from within the enlarged EU.

Since then Ireland has only granted new work permits for non-European Economic Area nationals when there was evidence that workers for these positions were not available from within the EEA. Virtually all of these positions are highly skilled and highly paid

Only twenty years ago we were dealing with economic, budgetary and unemployment challenges similar to those which our new European partners are coping with today. In the 1980s, Ireland had economic growth of around 1 to 2 per cent, a debt to GDP ratio of over 100 per cent and unemployment of 17 per cent. As a result, Ireland was experiencing significant rates of emigration. In that decade as many as 65,000 people were leaving Ireland each year.

In the relatively short period since then, partly as a result of our membership of the EU, Ireland has been transformed into a country with an economic growth rate of about 5 per cent, a debt to GDP ratio of 30 per cent and with unemployment of about 4 per cent. As a result, the trend of migration has also changed, from one of emigration to where we how have significant inward migration.

The decision to grant full access to the labour market has meant that Ireland’s regional labour market of 2 million workers is now part of a much larger EEA labour market of over 200 million workers.

Our experience since full labour market opening

Back in 2003 when we were considering what the effects of opening our labour market would be, we estimated that perhaps 15,000 to 20,000 EU-10 nationals would come to Ireland to work during the first year of accession. However, this projection significantly understated the attraction which Ireland holds for workers from the accession States.

In the period since May 2004 over 160,000 PPS numbers have been issued to EU-10 nationals. Tax revenue data indicates that about 70 per cent of these entered Ireland’s labour force at some stage. Of the PPS numbers issued, over 50 per cent were issued to Polish nationals and 20 per cent to Lithuanian nationals.

Undoubtedly some of these were students who came for summer work, others seem to have come for short periods to avail of opportunities either in seasonal work or short term contracts.

However, there is no doubt that many others have found established and well-paid employment in Ireland. Some of them may intend to build a life or a long-term career in Ireland.

There is now therefore great diversity in our labour force. Nationals from over a hundred countries are working in Ireland. In fact non-nationals in total represent at least 8% of our current labour force. This compares with 3.7% in the year 1999.

Non-national workers are engaged in a diverse range of activities across different sectors of the economy. In the construction sector, the percentage of non-nationals is only a little higher than average at 9 per cent or 22,600 workers. In other sectors the numbers and percentages of non-nationals are as follows:

manufacturing 27,800 - or 9.4%

hotel & restaurant 23,100 - or 19.2%

financial & business 21,500 - or 8.2%

Of course, the new policy has had a significant effect on the numbers of new work permits we have issued. These have fallen from close to 22,000 in 2003 to 7,350 in 2005.

What has been the impact of this significant inflow of EEA nationals on Ireland’s labour market?

Preliminary indications are that the participation of EU-10 nationals has not had a significant impact on overall wage levels, or indeed on unemployment rates here. Unemployment in Ireland remains at very low levels and has averaged 4.3 per cent over the past year – the lowest in the European Union. In the year to the third quarter of 2005, employment grew by 5.1 per cent – in other words, an additional 96,000 jobs were created, of which about 40,000 were taken up by non-nationals. Non-national workers appear to be filling jobs in those sectors which are experiencing strong jobs growth.

Further challenges

However, we do still have challenges to meet in the economic migration field.

First of all, not all of the EEA nationals who have come here are working to their full potential. Language can often be a barrier in this respect. Research based on the 2002 census of population revealed that over half of non-nationals working here have third level qualifications and a further 30% have completed second level. This research also shows that if Ireland had fully utilised their skills and talent GNP would have been 0.7 per cent higher during the five years to 2003.

A second challenge is that of ensuring that non-national workers in Ireland benefit from the full range of statutory employment rights and protections in the same way that Irish nationals do.

New Economic Migration System

A third challenge is that of bringing in from outside the EEA those skills which we need to move our economy to one that is knowledge-based and innovation-driven, but which we cannot source from within the EEA. Towards this end we have recently announced a new green card-type system for high skilled non-EEA nationals and a revised work permit system for occupations where the shortage is of labour rather than skills.

The core feature of the new system is that is based on actual offers of employment, rather than on points or quota schemes. The new system has three pillars:

Pillar One is the establishment for the first time in Ireland of a Green Card for occupations where there are skills shortages, which will be for a restricted list of occupations in the annual salary range from €30,000 to €60,000 and for a more extensive list of occupations in the annual salary range above €60,000.

The occupations will be in the ICT, Construction, health care, financial services, engineering, pharmaceutical and sales and marketing sectors.

The Green Cards will be issued for two years initially, will normally involve the granting of permanent or long-term residence thereafter. Green Card holders will be permitted to bring their spouses and families to join them immediately, and their spouses will have the right to work without the need to apply for a work permit.

Pillar Two is a revised Work Permit scheme for a very restricted list of occupations up to €30,000, where the shortage is one of labour rather than skills. In these cases a labour market test, including advertisements in the national and/or local press, showing that the positions could not be filled from within the EEA, will need to be met.

Pillar Three is a re-established Intra-Company transfer scheme for temporary trans-national management transfers.

We will of course of course, keep the implementation of the current set of policy instruments under review and will adapt them as necessary as the economy and the labour market continue to change.

Conclusion

To conclude then, I would say that migrant workers have already made a positive contribution to our economy and have participated significantly in the development of our infrastructure and I expect this to continue.

ENDS

LA167