Free movement of labor, redux

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On the previously mentioned subject of Europe’s “free” movement of labor (and the possibility of a massive influx of cheap labor from the east come EU accession time) here’s an article I wrote on the topic in November for Czech and Slovak Construction Journal (for some reason the article’s not posted online).

If you’re too lazy to read the whole thing… It talks about the onset of “EU fatigue” in the east, plus it cites a bunch of studies that discredit the fear of a massive influx of eastern workers wrecking havoc on Western European job markets. And this is really about Polish construction workers already living illegally in Berlin, not Czech IT geeks in London (nor British chefs in Prague). Enjoy.
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Eta And The Spanish Elections

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As someone who lives and works in Barcelona (capital of Catalonia, and formal definition in the eyes of the local nationalists of being Catalan), it is really rather frustrating to find that about the only time we make it to the European headlines (apart, of course, from when Bar?a wants to buy some world famous footballer like Beckham) is when one of the players in the greater-Spanish political arena – in this case Eta – wants to exploit some situation or other here to its own advantage. Outside of this context (and with, of course, the honourable exception of George Orwell) Catalonia is little heard of, and even less understood.
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The Euro and the Company

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Now maybe David is sitting there today asking himself just what the hell that post of Edward’s on outsouring in the US had to do with a European centred blog. Well the answer didn’t take long in reaching us: the euro rose to a fresh record above $1.29 today as upbeat U.S. data yesterday failed to diminish the bearish view of the greenback and off it went to new multi-year lows against a range of other currencies (this should make us ask ourselves what may happen if we get a run of bad data).

And just what has this got to do with outsourcing? Well we seem to be on a conveyorbelt at the moment, one which stretches all the way though Asia across the US and then on over to Europe. What this is producing is ‘weakness’ in the US labour market, an intractable US trade deficit, and interest rates at historic lows. Which means of course that the dollar keeps on falling, and the euro keeps on rising. Until…….
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Minding the parking meters

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The Czech press digest Fleet Sheet puts out a free email bulletin with blog-like observations on Czech culture, business and politics. Though it’s sometimes a bit off base, it’s worth looking at to get a sense of the scene in Prague. Today’s…

Why does Prague airport have expensive self-service parking machines, when the CR is a mecca for low wages?… It’s still possible to get shoes or a broken TV repaired in the CR, but the march toward the European welfare state will soon raise taxes and wage costs so high that it’ll be cheaper to throw out the old shoes and buy new ones. Premier Spidla told Frankfurter Allgemeine Zeitung that reconciling the costs of modernizing the welfare state and the impact on common people is a European-wide problem without a solution. If the European welfare model collapses, he said, so will the EU itself. Then Czechs could go back to minding the parking lot.

An interesting statement with wide implications, although I’m not exactly sure there’s such a strong connection between parking meters, broken televisions, and the European welfare state.

Outsourcing and the Global Optimum

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The last week has seen the ‘great US ousourcing debate’ hit both new highs, and new lows. On the plus side would be the declarations of the oft maligned Greg Mankiw to the effect that the “outsourcing” of jobs is beneficial to the United States economy (even with the qualification ‘perhaps’ this has merit – since despite the fact that the suggestion may not be as well-founded as Mankiw imagines, it is at least courageous in a situation where the President he is advising doesn’t appear any too clear on the question himself). Among the more evident examples of the low points would be the statement from the Democratic Presidential aspirant John Kerry to the effect that company leaders who promote business process outsourcing are ‘Benedict Arnold CEO’s’.
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New EU members — in name only

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To my new colleagues at Fistful, I’d like to offer an apology for being silent lately. I’ve taken over back-of-the-house management duties at the restaurant I co-own in Prague, Tulip Cafe and, well, managing a restaurant is about as much work as you’d imagine, and then some.

The kitchen at Tulip is truly a cultural melting pot: currently we have three people helping out there, one British, one Australian and one Russian, and the lingua franca is generally Czech. And in that regard, I recently discovered that the future of my little business is largely in the hands of Tony Blair.

Call it the old bait-and-switch: Despite widespread reluctance to jump onto a train whose destination is basically unknown, Eastern Europeans voted overwhelmingly to join the EU last year. One of the reasons was the idea of “free movement of labor,” which is supposedly one of the fundamental freedoms of the EU. As it turns out, this “freedom” is a bit of a sham for the easterners, as countries like Germany and Austria, fearing a flood of cheap labor from the east, have instituted “transition periods” (lasting beyond 2010 in some cases) severely regulation the rights of easterners to work in those countries.
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