Vol. 2 No.9  

Where have all the workers gone?

Come work in Romania: could this be the rallying cry to nations in far eastern Europe in five years’ time? ‘The Diplomat – Bucharest’ investigates fears of a labour shortage

      High growth, low unemployment and a declining population mean that Romania may witness a shortfall in labour in the next five to ten years.
      But with the nation reaching political stability and a positive investment grade, foreign multinationals will still want to set up shop in the country.
      However, a lack of manpower could discourage them.
      “There are not enough people who can grow the economy,” says Austrian commercial counsellor Walter Friedl.
      Shortages in the work force could hamper more Austrian firms starting greenfield investments in this country, he adds.
      Therefore, one option available for Romania is to open its doors to new workers. A continual trend in the declining workforce could make the country a target for immigration by 2010, said Foreign Minister Mihai Razvan Ungureanu.
      “Romania has the potential for being a country of immigration in the future,” adds Jonathan Scheele, outgoing Head of the Delegation at the European Commission in Romania.
      But, due to an unpredictable worker mentality in Romania, not everyone agrees.
      “We do not think Romania will experience a labour crisis in the next five to ten years,” says Aurel Teodorescu, director of the Office for the Migration of the Work Force (OMFM). “Romanians who wanted to go abroad to work had this opportunity before Romania’s EU accession and are already working abroad.”
      Since 1990 the number of workers has fallen from 8.1 million to 4.5 million.
      Now Government policy is focused on making Romanians stay in the country, rather than encouraging foreign workers to migrate.
      But there is a another problem. Romanian fertility is down. There are not enough babies. In the 1980s Communist pro-natal policies saw a baby boom. These initiatives vanished  after the Soviet bloc collapsed.
      The UN has forecast that by 2050 half of the Romanian population may be of retirement age, with a population of 16 million people.
      “This forecast did not even consider migration,” says Dr. Laurian Arghisan, the Population and Development Programme officer from UNFPA Romania.
      If the net migration rate is positive, this means the situation could balance out. “But in the past, the net migration rate has been negative,” says Arghisan, “and this may continue in the future.”

Labour lack

      At present, the Romanian market is seeing a shortage in high-intensity industries such as packaging, textiles, road building, bricklaying, security and carpentry.
      Construction sites are hard hit.
      A problem that building materials producer Baumit confronts in Romania is the lack of qualified workers who chose to work abroad for a bigger fee.
      “Quality building needs good workers,” says Laurentiu Lupusor, general manager of Baumit Romania. “Even if our products are of a high standard, we need experienced  people to work with it. We offer specialised training for our workers, but still a lot of them chose to leave the country.”
      Romania’s growth is limited by the size of its workforce.
      “If we cannot find builders, for example, the GDP will not be able to grow at the announced eight per cent per year because Romania does not have the workforce to grow with it,” says Markus Piuk, managing partner at law firm Schoenherr and Associates.
      In Germany and Austria the economic growth in 1960s and 1970s was sustained by guest workers from Yugoslavia and Turkey, many of whom stayed.
      “Everyone in Romania who wants to work has a job,” says Piuk. “There needs to be an inflow of workforce.”

Opening doors

      Currently, there is no Government programme to attract foreign workers from other countries to Romania.
      But the countries most likely to provide manpower would be the Republic of Moldova and Ukraine, Ungureanu has said, where there are significant Romanian-speaking minorities, but “maybe” other countries in the Black Sea region.
      This could be a serious issue for the Republic of Moldova to contend with.
      Georgia and China could also be targets for migrants. But China is seeing an increase in wages in line with its growth that could mean moving halfway around the earth to work in Romania may not be worth it.

Coming home

      There are around two to three million Romanians living and working abroad, who could come home to a booming market.
      “Many of the migrants are leaving only temporarily,” says Arghisan, “Romania needs to create the conditions where they do not permanently leave. [These migrants] still need to consider Romania as a possibility.”
      Many of them may return due to the rising wages in the country.
      “A work deficit will push salaries for certain sectors up,” says Nikolai Botev, advisor on population and development – UNFPA country support team in Bratislava. “Rising salaries will pull some migrants bank.”
      The hope is that the free market should regulate itself. This happened in Portugal and Spain, where part of the population migrated in the 60s and 70s to Switzerland and Germany. Now they have returned to work in their home country.
      But those returning may look to becoming entrepreneurs rather than working in a shoe factory, building site or picking cabbages.
      “Romanians who have taken over westerners’ habits are no longer interested in working in heavy industry or textiles,” says Teodorescu. “Instead they aim for better paid jobs.”

Report by Michael Bird,
Corina Mica and
Mihai Alexandrescu

Pole story

      Though Polish unemployment is 15 per cent, the country is witnessing a labour lack in construction workers and in the health sector.
      The economy is growing at five per cent and the booming construction market is hit by a shortage for both large-scale projects and for individual homeowners. Doctors and nurses are also leaving the country to double their wages.
      Before Poland joined the EU, there were about 250,000 registered nurses in Poland, the Warsaw Voice reports, now there are 164,000.
      “Poland had a very high fertility rate [in the late 70s and 80s] which means there was a large youthful population,” says Nikolai Botev, UNFPA. “This partly explains why migration was so massive.”
      But there are fears in the new member states. To stop a potential exodus, the Bulgarian Government now has a strategy to enhance youth-oriented policies, such as facilitating the flexibility of the labour market for the young and giving them incentives to get a start in life.
      To encourage the population to stay in the country and bring up a family, societies like Romania and Bulgaria need to create a safe and secure environment for people to want to raise children – such as good childcare facilities, affordable housing and cash incentives.
      “The Romanian state is working on special measures to stimulate the employment of Romanian workers and encourage domestic migration,” says Teodorescu, “so that labour shortage in certain fields is not covered by employment of foreign workers.”
      This will include a package of incentives such as extra money for taking on jobs and non-cash bonuses.