Poland needs to take care of the Ukrainian immigrants

(Groder, Public domain)

CE Financial Observer: How many immigrants are in Poland?

Paweł Kaczmarczyk: We don’t know, and no one should even try to come up with a precise figure. Making such estimates is much easier in countries where the dominant form of migration is permanent migration with the purpose of settlement, and migration taking place on the basis of documents that are much easier to register and to utilize for the purpose of statistical evaluation. In Poland, the situation is different — there are several hundred thousand immigrants who have a residence permit, and we know this with some level of certainty (in July 2019, this population reached approximately 400,000 people). But in addition to that, there is a very large number of seasonal workers who also reside in the country. Therefore, if we were to ask how many immigrant workers there are, we should be more specific — when, at what point in the season?

Public offices in Poland monitor and regulate the labor market, as well as cross-border traffic. Aren’t they able to provide accurate information?

Over the last five years, the scale of immigration has grown several-fold. It could be claimed that there are 1.5-2 million immigrants in Poland at the peak of the season. Meanwhile, the employment of personnel handling immigration issues in the labor offices has hardly changed. So we should not expect that this process will be closely monitored, because we simply don’t have enough resources. In addition, even if the system was almost perfect, we have to keep in mind that this immigration is seasonal, temporary and often circular. And this sort of labor mobility is difficult to analyze anywhere in the world.

How does the economic immigration management system function in Poland?

The general rule in the European Union is that foreigners who want to work must have a work permit. There are exceptions to this rule, for example, for students or highly skilled workers. The system that has been in place in Poland since 2006 allowed foreigners to work without any permits — although this does not apply to everyone, because it covered the citizens of selected countries of the former Soviet Union. The basis for employment was a declaration submitted by the employer. To obtain such a declaration, the employer had to register at the labor office a document specifying the personal data of the foreigner, the sector of the economy, and the employment conditions. On this basis the foreigner could then obtain a visa.

However, this declaration only indicated the intention to employ a foreigner and did not oblige the employer or the employee to conclude an employment agreement. As a result, employers were registering more declarations than necessary, because they didn’t know how many of these foreign workers would actually show up. We estimated that approximately 60-70 per cent of such declarations were ultimately used.

Aren’t such lenient regulations common in other countries?

These regulations were extremely liberal, and there was no other system of this sort in the European Union. Unfortunately, by the very nature of things, it was very difficult to monitor and control. We must also consider the fact that just because a declaration was registered, and a visa was obtained, does not necessarily mean that a foreign worker was employed legally, because this is determined by the conclusion of an employment contract that is valid and that is relevant to the activities performed by the worker.

Taking this into account, at the beginning of 2018 a new system was introduced, with new permits for seasonal work in agriculture. At the same time, the maximum length of employment was extended to 9 months. The declarations were left intact, but a requirement to register the arrival and departure of the foreign worker was added. We still cannot assess the effectiveness of this new system, although the Ministry of Family, Labor and Social Policy is already trying to analyze. Additionally, the year 2018 was a period of transition, in which the previously issued declarations remained valid, which creates significant difficulties from the point of view of statistics and evaluating the new system’s effectiveness.

Has this limited the influx of immigrants? The number of declarations fell from 1.82 million in 2017 to 1.58 million in 2018.

We have fewer declarations, but this does not mean that the scale of immigration has declined. It shows that we have managed to reduce the gap between the number of registered declarations and the actual number of foreigners arriving. My calculations show that in 2018 the scale of the process increased, contrary to what was reported in the media. What does it look like in 2019? We’ll find out when the full data are made available.

What is the reason for such a large influx of foreign workers?

In Poland, we are dealing with an exceptional situation. If we were to look back at the last decades, there were very few examples of such a massive influx of foreigners in the world. The influx of immigrants from the Maghreb to France in the early 1970s wasn’t as large — it reached a total of approximately one million people. The Turkish immigration to Germany is perhaps comparable in terms of numbers, but it was more spread out in time, and additionally the process itself was a highly institutionalized recruitment of foreign workers.

In Poland’s case, this happened within just three or four years, and was influenced by supply-side and demand-side factors. On the one hand, we had an extremely liberal system in place, which for many years provided for the employment of approximately 200 to 300 thousand people per year. Then we experienced the outbreak of the war in Ukraine in 2014, which caused a profound socio-political crisis in that country. It was only the joint impact of these factors that resulted in such a large-scale influx of workers to Poland. If the government simply had attempted to attract 1.5 million Ukrainians to the Polish labor market, then — in my opinion — such an objective would have been extremely difficult to implement. However, the question is, what will we do with this potential?

Economic analyses, including those prepared by Poland’s central bank, NBP, show the positive effects of immigration on economy and fiscal situation. So are we taking advantage of this potential?

The fiscal impact of the immigration from Ukraine is absolutely positive. It is probably even higher that the fiscal impact of Poles, because among majority of Ukrainians working in Poland there are no children or teenagers, and virtually no retirees. At least so far. Majority of them are of the working age. Additionally, contrary to what is commonly believed, the scale of illegal employment is not that large and could amount to 20-30 per cent. Most of the immigrants pay direct taxes, and all of them pay indirect taxes. Very few take advantage of their social entitlements, such as collecting child benefits.

However, what is important is not just to attract these people to come to our country, but to ensure that they are active on the labor market, that they participate in various types of institutions, that they have strong social relations, and that their children are educated in Polish schools. Because if we fail to do this, we will lose — just like many countries of Western Europe. We tend to criticize the French, and the Germans, and yet we are doing the same they did several decades earlier. We have a belief that Ukrainians are integrating successfully — but this is not supported by facts. Speaking Polish is not easy for Ukrainians, as it’s not easy for Poles to speak Ukrainian. Of course, they can cope more easily than if they were in a completely different cultural environment, but this is not an automatic process.

And how do we know that they are not treating their work in Poland as nothing more than a temporary way to make money?

The percentage of foreign workers who are bringing their families is growing. Ten years ago, these were isolated cases, but recently, and especially after the outbreak of the war in Crimea, it has been a more frequent phenomenon. The motivation initially stemmed, for example, from the desire to avoid military service. That is why female immigrants were bringing their adult sons. Currently, this also involves skilled workers who are bringing their families, because they don’t see good prospects for the future in Ukraine. This is one of the most interesting trends shown by studies carried out by the Centre of Migration Research of the University of Warsaw for NBP. This trend is also associated with the fact that the average duration of an immigrant worker’s stay in Poland is longer (which indicates a slow transition from typically seasonal migration towards more permanent immigration and settlement) and that a growing number of immigrants now hold a residence permit (and not just the basic documents related to the simplified procedure for the employment of foreigners).

We are also examining the financial aspects of immigration. This includes not only the remittances sent back to the country of origin, but also the structure of expenditure in Poland and in Ukraine. It turns out that the share of wages spent by the immigrants in Poland is growing. Just a few years ago, approximately 80-90 per cent of the earnings was sent back home, and now this share is much lower. However, it is difficult to conclude that this is a universal rule. Recently conducted studies showed that while the vast majority (80 per cent) of Ukrainian immigrants residing in Bydgoszcz indicated the desire to spend their savings in their country of origin, in the case of Wrocław the largest group of immigrants (60 per cent) planned to spend their money in Poland.

Immigrant workers, primarily from Ukraine, are boosting Poland’s economy. But will they be able to help in solving demographic problems?

Migrant groups always have a different age structure than the native population. Firstly, if we are talking about economic migration, it concerns people of working age, which means that we can exclude the entire bottom of the age pyramid. Secondly, Ukrainian immigrants are rarely older than 50 years of age, with an exception. The immigration from Ukraine is unique because partially they are women aged 50 and above. In the short-term, immigration leads to a rejuvenation of the local population. But what will happen when these people start settling in Poland? After some time, this rejuvenation effect will begin to fade. Of course, the immigrants can and will have children, but their fertility rates will not necessarily be different from those of Polish citizens.

According to migration and demographic analyses, in order to maintain the current ratio of working age population to the non-working one, we need a steady inflow of immigrants. But there is possible return emigration, which could become a burden on the pension system in the long run. If Poles come back from abroad, then it will most likely be in the final stage of their life, which could further accelerate the process of the aging of the Polish population.

How many immigrants Poland can still take in?

A few years ago, we prepared forecasts in an attempt to answer a question of when Poland would become a country of net immigration — because right now, even in light of the large-scale influx from Ukraine, the number of Polish emigrants is higher. Back then, in 2015, we were surprised by the results — our analyses indicated that Poland should become a country of net immigration between 2020 and 2025. However, a year later this conclusion was no longer as shocking, and the scale of the (annual) influx came close — at least in the short term.

How far into the future does this forecast reach?

By the year 2060, the share of immigrants in the Polish population may amount to 15-20 per cent. This forecast shows clearly that the propensity of Polish citizens to emigrate will decrease as a result of economic and demographic factors, and that the scale of immigration will grow. If we were preparing such a forecast today, then — given the assumptions that were adopted at the time — the result would be significantly higher, with one important caveat: our forecast, like most analytical exercises of this sort, ignores the issue of supply of immigrants, i.e. it assumes that in the event of favorable circumstances a migratory flow will occur. The problem with this assumption could be the possible shortage of people interested in coming to a given country.

Some analysts point out that the potential for increasing immigration from Ukraine is being exhausted, and other potential sources of immigration are not explored.

It is true that the pool of potential migrants in Ukraine is decreasing. However, these demographic considerations are still not something that is happening right here and now. The demographic deficit in Poland has just began, and in Ukraine it will probably occur in a few years. In the years 2020-2030 we should expect a significant decline in the share of working-age people. So this is not a problem at the moment, but in 5 to 10 years this potential will indeed no longer be available. We know that in Ukraine there are villages where the provision of some public services, such as public transport, had to be suspended, simply because there were no workers available.

So what should Poland do to maintain this level of economic immigration?

I don’t know whether we really need such immigration. We still don’t focus enough on the supply side and on the transformation of the labor market. We don’t talk enough about automation and the impact of technological changes on employment. I’m not saying that the demand for foreign workers will be drastically reduced, because the sectors in which they are currently working — unskilled services, agriculture — are those where automation is the most difficult. This demand will certainly remain. But in my opinion, there are still labor resources that we can activate on the Polish labor market.

This includes young people, who in Poland are entering the labor market at a very late age; the elderly, who are leaving this market too early; people of poor health, who are leaving their jobs and entering the pension system; people with disabilities, who are basically excluded from participating in the labor market; and, finally, the increasingly high number of people caring for children and elderly relatives. These groups may comprise a total of about 2 million potential participants of the labor market, and this is still more than the estimated pool of immigrant workers.

And in your opinion, in what research areas Poland should invest?

We should examine how the situation of immigrants is changing over time, how their strategy and behavior evolves. There is a growing group of foreigners who are deciding to extend their stay in Poland, to settle, and even to bring their families — this is something that we haven’t seen before. However, this would require the use of panel studies, based on a relatively stable group of participants who could be surveyed regularly — their labor market status, intentions and strategies.

I have also been calling for many years for the research to be conducted among the Polish diaspora. And this shouldn’t be limited to these new young emigrants of the past decade or so, but should also include the older emigrant community, which is already strongly established abroad. We should examine their plans for returning home, because they have such plans, and we should explore the potential for business, scientific, and cultural cooperation. There are some countries, such as Latvia, which have made a big effort to conduct such studies, and they have proved to be a success. Given the history of Polish migrations, this should be one of the ambitions of the Polish state.

Paweł Kaczmarczyk, PhD, is an assistant professor at the Faculty of Economic Sciences at the University of Warsaw (Department of Demography). Since 2016 he has been the director of the Center of Migration Research of the Warsaw University.

(Groder, Public domain)

Close slider