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Dealing with Low Wage Labour Migration: Norway
Line Eldring, Fafo Institute for Labour and Social Research,
Friedrich-Ebert-Stiftung & Arena Idé Conference,
Stockholm, 14.11.2014
The Norwegian debate in 2004
What will be the scale of migration from the East?
will migrants rather go to other destinations?
what about «welfare tourism»?
Transitional restrictions ‘just in case’
but free flow of services
Risk of social dumping? Or rather social jumping?
THE ANSWER: Stock of citizens from EU8+2 in Norway, 2004 and 2014
Source: Statistics Norway
+ numerous posted workers, non-settled workers and service providers
Stock of citizens from EU8+2 in the Nordic countries, 2003 and 2014*
Source: Nordic Statistics 2014*Numbers for Iceland are from 2006 and 2013
+ numerous posted workers, non-settled workers and service providers
Measures
Erga omnes
ILO 94
Construction
workersA
Lack of labour
Welfare
benefitsA
Transitional
rules
Financial
crisis
Poles
Roma
LavalA
TU responses
Housing
IntegrationA
PostingA
Mobility of
services
EU
regulations
Undeclared
work
Labour hire
Free flow
TWA
Language
Low wage
competition
Skills
Extension of
CAs
Recruitment
strategies
Living
conditions
Action plans
Social
dumping
Labour
InspectorateA
Minimum
wage
Labour
market crime
Who is threatened?
Does labour migration pose a threat to the “Nordic model”?
Or does the model fail in securing labour migrants a decent working life?
Nordic minimum wage regulations
Coverage of
collective
agreements in
private sector
Statutory
extension of
collective
agreements
Type of
regime
Denmark 74 % No Autonomous
collective
agreement
modelSweden 85 % No
Norway 50 % Yes, some Mixed model
Finland 85 %
Yes, widespread
Regulations
by law (and
strong unions)Iceland 95 % Yes, widespread
Source: Alsos & Eldring (2008/14)
The Norwegian government’s action plans against social dumping
2014: The government is preparing a strategy against
labour market crime
Action plan 1 (2006):Strengthening the sanctions at the disposal of the Labour Inspection Authority
Increased resources for controls and supervision
Ensuring more orderly conditions in connection with the hiring and hiring out of employees
Improving the system for the general application of collective agreements
Combat unscrupulous contractors and in the establishment of sole proprietorships
Include requirements for Norwegian pay and working conditions in municipal tender procedures (ILO 94)
Introduce extended responsibility for clients and ID cards in the building industry
Implement measures in coastal shipping and agriculture
Improve statistics and the basis for analysis
Improve coordination of the efforts of government agencies throughout the country
Strengthen cooperation between the authorities and the social partners
Action plan 2 (2008):Increased resources to the Labour Inspection Authority
Improving the system for the general application of collective agreements
Joint and several liability
ID cards in the cleaning sectorEstablish a regional safety representative scheme in the hotel & restaurant and cleaning sector
Industrial Injury Insurance – improve information on right and duties
Information and advice – give sufficient information to foreign employees and employers
Measures against social dumping in the agricultural sector – more information, supervision and control
Evaluation of the action plans (Fafo)
Regulations and enforcement was strengthened
The measures against social dumping had a positive effect
High probability of more social dumping without themeasures
But:
This is the situation in areas with extendedcollective agreements – where both regulationsand controls are strenghtened – but to a far less degree in sectors without legally extendedagreements
Legal extension of collective agreements in Norway: A novelty
The Act Related to General Application of Wage Agreements came into force 1. January 1994, but was not in use until 2003/4
The purpose of the act is to protect foreign workers and to ensure fair competition for companies (not to ensure a widespread diffusion of collective agreements in the labour market)
Only wages and individual working conditions can be extended
Extended agreements as of today:
Construction
Ship-building
Agriculture
Cleaning
Applications for extensions of collective agreements fish industry, electricians, transport are currently processed.
Legal extension of collective agreements: Experiences & effects
Employers:
Positive in construction and cleaning
Strong opposition in ship-building
Trade unions:
So far no free rider problems
Tool for recruitment of migrant workers
Current extension system needs revision
Migrant workers’ wages:
Positive effects – but still evidence of wage dumping
Average wages lower than among native workers
Source: Eldring et al. (2011)
Low wage: Share of Polish construction workers in Oslo with wages below the extended minimum rate(2010)
Permanently employed in Norwegian
company
0 %
Temporary employed in Norwegian
company
23 %
Employed by temporary work agency6 %
Employed by foreign sub-contractor38 %
Total19 %
Self-employed 34 %
Source: Friberg & Eldring (2011)
Dealing with low wage in Norway: Summary remarks
«Everybody» is against social dumping – but it is still disputed where the borderline between acceptable and unacceptable conditions is
Collectively agreed minimum wage rates accepted (by trade
unions, government, some employers’ association) as benchmark for dumping/non-dumping
Extension of collective agreements; most important tool
But only applied in four sectors so far
Average (native) wages far above minimum rates in most sectors
Some employers’ associations and political parties want to replace the extension mechanism with statutory minimum wage – this is strongly opposed by the trade unions
«We thought we were going to
the civilized Europe...»
«We don’t think we ever will
become proper members of
the Norwegian society.»
Latvian construction workersin Norway, 2013
www.fafo.no/Oestforum
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