Low-skilled Migrants in the Czech Republic in Times of Economic Recession: unwanted, but demanded at the same time

There are three examples of systematic programs of economic migration management, which seem to define the preferences of the state in terms immigration: pilot project Selection of qualified foreign workers, Czech Green cards project and European Blue cards projects. Mentioned pro-active migration programmes point to the selective approach of the Czech state, which appears to be oriented towards qualified immigration from culturally close destinations. The other side of the coin is the policies that are implemented as a reaction to the changing context within the country. So called reactive policies are developed in response to something, which is considered to be a problem or emergency. This short commentary will be focused on reactive policies of the Czech state, which, at least in terms of immigrant’s accession and integration, seem to have more dramatic and quick effect than the latter ones.

Economic growth over the last decade, and especially in the years 2006 to 2008, was paralleled with a large increase in foreigners’ participation in the Czech labour market. In 2008, Czech labour offices issued the largest number of work permits since their establishment (slightly more than 130 thousand). The Czech state (and especially the Ministry of Industry and Trade), not only accepted that there was high domestic demand for foreign workers but reaped the rewards of increased immigration as the Czech economy surged ahead. However, the financial crisis of late 2008 and the subsequence global economic recession adversely affected Czech economic performance as exports and local demand lessened. This downturn revealed a series of problems that had remained largely hidden until this point.

The reaction of the Czech government to the economic recession was the formulation of a National Anti-crisis Plan approved by the cabinet in early 2009 [Government of the Czech Republic 2009]. This national plan identified two key immigration-related priorities, which the government asserted “would bring harmony to Czech society and ensure domestic security” [Government of the Czech Republic 2009: 13]. The first measure involved the restriction of the inflow of new foreign workers into the Czech Republic, while the second measure focused on the voluntary repatriation of those who had lost their jobs during the economic crisis. The last immigrant-related plan proclaimed by the government was the enforcement of controlling measures targeted on foreigners without valid permits.

The Czech government envisaged achieving the first goal by suspending the issuing of any further selected type of visas. Here the focus was mainly on long term visas for the purpose of employment and self-employments. According to the official information, some Czech embassies and consulates abroad stopped accepting applications for several months. Ironically, Čižinský [2009] noted that the Czech government was unsuccessful in this plan as new visas were still issued, regardless of the new provisions. The government was criticized for promoting this particular measure even though it proved ineffective. The criteria for issuing new visas were vague and the national quotas remain in place. Furthermore, these regulations are often not subject to general public scrutiny [Čižinský 2009; Drbohlav et al. 2010].

Attempts to achieve the second goal contained in the Czech governments’ anti-crisis measures resulted in a programme of voluntary repatriation.[1] This programme was launched in early 2009 to provide financial aid and a one-way ticket to the country of origin to those migrants who had lost their jobs, and therefore had no purpose for remaining in the Czech Republic. The rationale behind this voluntary repatriation programme was not only to help foreign workers in a time of crisis, but to ensure that large numbers of foreigners do not remain in the country without valid work and residence permits. In its first phase the voluntary repatriation programme was targeted toward to those third country immigrants who had lost jobs but still had valid residence permit, and had thus stayed legally in the country.[2] In the following stage, the programme was expanded to include foreigners without valid residence permits.

At the end of 2009, the voluntary returns programme was ended after a brief 10 month existence. One of the reasons for this decision was budget cuts. In spite of governmental expectation, voluntary returns were not very successful in terms of numbers. During all phases of the repatriation project 2,258 foreign citizens were returned to their countries of origin, and only 169 of these migrants had resided in the Czech Republic without legal documents. Most success was achieved among citizens from Mongolia. During the voluntary return programme 1,342 legal residents and 15 illegal workers returned home. The largest groups of labour migrants, i.e. Ukrainians and Vietnamese did not participate in significant numbers in this project, as only 303 Vietnamese citizens (including 20 without valid documents) and 130 Ukrainians (70 did not have valid documents) returned home. One of the main reasons for low interest in voluntary repatriation among immigrants was the global nature of the recession during 2009 and 2010. Consequently, in the home countries migrants might also experience economic hardship and have difficulties ensuing from expenses stemming from the original decision to immigrate.

In the Czech case, it is also possible to speak of other fears, such as obstacles restricting repeated immigration. Participants in the voluntary returns programme received shorter re-entrance bans, as well as documents confirming their participation in the project, which did not however guarantee success upon re-entrance[3]. As Plewa [2009] suggests, certain signs of reorientation of migration policies (excluding “culturally distant” migrants, who are unlikely to assimilate into Czech society) were evident before the crisis. In addition to repeated attempts by the Czech state to implement a selective approach toward admission policies, restrictive measurements taken in 2009 led to concern about the possibility of re-admittance to the Czech Republic, especially among immigrants from the Asian states like Vietnam. Migrants from Asia were excluded from practically all pro-active immigration projects and subjected to the visa suspensions [Plewa 2009].

As noted earlier, one of the priorities of the Czech Republic’s anti-crisis plan was the enforcement of controls targeting foreigners without valid residence and work permits. In addition to increased Foreign Police checks, there were greater attempts to coordinate the activities of other state institutions. In the light of these events, Čaněk [2010a] criticized this increased coordination across state agencies such as the Labour Inspectorates and the Foreign Police. This criticism was based on the principle that immigrants and domestic workers should be treated fairly and in an equal manner. Consequently, equal treatment of all workers depends on separating control over length of residence and working conditions. If foreigners are subject to higher levels of surveillance in their daily lives, then inter-institutional cooperation would result in increased fear of possible sanctions and a general reluctance by foreign workers to report any violation of labour law or other abuses [Čaněk 2010a].

The Ministry of Labour and Social Affairs (MLSA) was also active during the initial phase of the economic recession. At the beginning of 2009, this ministry sent out a special memorandum to all labour offices. Significantly, this official document was not made available to the general public. This internal ministry document instructed labour offices about how best to make decisions about issuing and prolonging work permits. According to the MLSA, this memorandum did not recommend the suspension of work permits at any cost, but appealed for “greater consideration” to be made of a general decline in the demand for foreign labour within the Czech economy. In a press release, the MLSA admitted that the main aim of this memorandum was to facilitate unemployed Czech citizens’ return to the labour market. According to the MLSA, the situation in the domestic labour market should be “taken into account” not only when issuing new work permits, but also when making decisions about extending current work permits. This memorandum had some unintended consequences as its blanket measures also applied to foreigners who are partners in Czech business enterprises or are members of co-operatives [MLSA 2010b].

According to the MLSA communication, the main criteria for issuing work permits to third country nationals was to be an officials evaluation of the situation prevailing in the local labour market. As the result of this rather vaguely formulated instruction and the fact that the memorandum did not authorise any significant departure from the status quo, local labour offices made decisions on the basis of their own judgements, and hence tended to act in an inconsistent manner.[4] Surprisingly, this restrictive measure included some integrative principles. For example, extending work permits was judged to be preferable to issuing new ones; and the MLSA memorandum recommended that labour offices consider the family situation of resident applicants and the number of years spent in the country.

Recent research undertaken at local labour offices has revealed that some labour office officials adopted a benevolent approach toward work permits so as to minimise any disruption to Czech employers through the potential loss of their trained foreign-born labour force [Pořízková 2011]. In other cases, local labour offices acted more capriciously by restricting the validity of work permits to very short time periods such as three months[5], or stopped issuing work permits altogether although the position could not be filled by a Czech or other EU national. One important consequence of these developments was that local labour offices, or more precisely their head officers, obtained increased powers and freedom in decision making because of the MLSA memorandum. This decentralisation of decision making has had important consequences for many non-EU labour migrants. The effectiveness of this restrictive measure in boosting the employment prospects of the domestic workforce is not entirely clear. This is because official statistics indicating if the positions on which the foreigners failed to get permits were subsequently filled by Czech workers, thereby reducing local unemployment, are not available. Taking into account the dynamics of the Czech unemployment rate, described above, it seems that instead of combating unemployment and exclusion the measures taken by the MLSA only influenced the character of labour migration. Migrants’ preference for direct employment fell sharply, and this trend in turn undermined those official policies, oriented toward integrating third country nationals into the Czech labour market.

In spite of declining trend in direct employment of TCNs, in the beginning of 2012 MLSA decided to implement even more restrictive regulations and sent out another internal memorandum to the labour offices. Starting from June 2012 LOs were instructed to discontinue issuing work permits for positions where employers do not request maturita (GCSE). At the same time, the employer who wants to employ foreigners on position requiring at least secondary education with GCSE and refuse to employ a “suitable candidate” suggested by labour office will receive negative statement on their work permit application. Starting from the mentioned date, a proof of qualification will be required from all TCNs’ applicants and prolongation of work permits will be limited to six months. In order to improve the effect of mentioned measures on unemployment rate of natives ministry decided to invest in requalification courses for registered unemployed Czech nationals aimed on “gradually occupation of unemployed in positions currently taken by foreigners” [MLSA 2012].

In early spring, following the strong criticism from NGOs and Czech companies employing immigrants, MLSA sent out the adjusted memorandum, which modified very restrictive aforementioned regulations [MLSA 2012a]. According to the new MLSA recommendations LOs should not completely discontinue prolongation of work permits for unskilled profession, but prolong them for the shorter period of time: up to six months in case of professions with no GCSE requirements, up to one year for professions requiring certificate of completed secondary education and even up to two years for highly qualified professions with university education requirements. The new memorandum, however, insists on a proof of qualification requirement for all applicants, including those with only basic education[6]. Mentioned document also stress the need of contextual and individual approach of the LOs while deciding about the work permits, especially in case of new coming immigrants with low skills as well as employers potentially at risk of staff reduction as a result of the negative decision on immigrants’ work permits. [MLSA 2012a]

As a result of the changing labour market opportunities, and most importantly, of the restrictive employment regulations, the economic activities of officially registered non-EU immigrants declined significantly. The share of economically active among third country nationals (TCNs) was 70% in 2008 and less than 50% by the end of 2011. During the economic boom of 2008 there were slightly more than 200 thousand non-EU foreigners registered as economically active in the Czech Republic. In the following year the number of economically active tax payers from outside the EU dropped to 162 thousand: indicating a decline of almost a fifth (19%) in a twelve month period. By the end of 2011, the number of officially registered economically active non-EU immigrants dropped down to 136 thousand [CZSO 2012].

This apparent decline in officially registered economic activities, however, did not coincide with a massive return of non-EU foreigners to their home countries. In spite of the economic crisis and governmental measures aimed at securing employment of the domestic Czech population by restricting the employment of foreigners who are already in the country and limiting the immigration of the newcomers, the number of foreigners, as well as their share in the total population did not fall dramatically. Obviously, some economically active TCNs received permanent residence permits while others switched to alternative employment strategies, including self-employment[7] and other non-registered activities.

The current economic downturn had a dramatic effect on the employment of non-EU foreigners. The total number of employed non-EU immigrants registered at Czech labour offices declined by 80 thousand between 2008 and 2011. Changes in the Czech labour market and regulatory work permit regime coincided with a dramatic fall in the share of employed non-EU foreigners in the total labour force (see Figure 1).

Figure 1. Employment of non-EU foreigners in 1999-2011

Source: CZSO 2012
Note that “LOs” denotes regional Labour Offices in the Czech Republic.

The largest reduction was observed among employees from Ukraine and, what is interesting this trend is also evident among the Vietnamese. The latter group exhibited an incredible 85 % drop-off in direct employment between the end of 2008 and 2011. The truth is that this drop-off was preceded by a rapid increase in the number of Vietnamese with the status of employees. Most of these new Vietnamese employees were newcomers (i.e. work permit holders) recruited through employment agencies between 2006 and 2008; they were employed mainly as unskilled and semi-skilled workers in manufactory. According to Hofírek and Nekorjak [2010] the sharp decline in employed Vietnamese and the shift from “production lines back to market stalls” was in part a disadvantage of the agency employee status of this group of immigrants. Many Czech companies facing economic difficulties attempted to reduce their labour costs and typically preferred to have “ordinary” employees with work contracts than workers provided by employment agencies. In total, almost 60 % of the decline in the direct employment of TCNs, however, cannot be explained by staff reductions and the bankruptcy of Czech companies because the number of employed immigrants from EU member states increased slightly during this period. Governmental restrictions on employment agencies plus the regulations concerning the suspension of work-permits undoubtedly played a significant role in the decline noted.

The effectiveness of rather restrictive measures towards TCNs in boosting the employment prospects of the domestic workforce is not entirely clear. The statistics indicating whether the positions on which the foreigners failed to get permits were subsequently filled by Czech workers are not available. As it was mentioned, the strict regulations concerning employment are targeting especially low-skilled immigrants, who are occupied in professions not requiring complete secondary education. The change in the occupational structure of the TCNs as compared to the EU labour migrants exhibits interesting fact. Economic crisis does not seem to negative effect of the employment of EU nationals in terms of absolute numbers. Moreover, the occupational structure of EU migrants with a free access to the labour market was also rather stable between 2006 and 2011. During the same period the employment of TCNs mostly regulated by the state experienced rather dramatic change (see Figure 2).

Figure 2. Impact of the economic crisis on the employment of EU and non-EU nationals

Source: MLSA 2013.

It seems that Czech immigration policy often criticized for its inconsistency finally articulated the priority of the Czech state towards labour immigration from non-EU countries when it comes to their skills. On the one hand, the government wants to attract “more brains” from non-EU states by supporting an active policy of encouraging skilled immigrants. On the other hand, immigrants with “brawn”, i.e. low-skilled and unskilled workers are also considered desirable because this source of low-cost flexible labour is seen to be a key component of economic prosperity and mitigating the worse effects of the current international recession. Low or unskilled migrant labour are, however, generally seen to be “guest” workers on the understanding that they return home once their labour is no longer needed. The question is if this regulation declared in NSEM will work in practise. The experience in other European countries suggests the opposite.

The saying “there is nothing more permanent than temporary foreign workers” is often used as a summary statement describing the failure of past guest worker programmes in United States, Germany and other countries. Recent debates on the resurrection of temporary migration schemes suggest that, if well-designed, such programmes might be helpful for both receiving and sending countries [Castles 2006; Ruhs 2006]. A study of employed foreigners’ aspirations, however, suggests that many labour migrants (both qualified and unqualified) connect their future with the Czech Republic [Leontiyeva 2010].

Unwise policies and populist political rhetoric, that asserts that local jobs should be protected, often ignores the collective benefits of having free movement of labour. It would seem that the economic sense of giving migrant workers equal opportunities and wealth migrants labour generates for the national economy can be superseded by worries about loss of secure employment and income. Recent developments, such as the economic boom and subsequent recession, provide a salutary lesson concerning the potential dehumanization and commoditisation of immigrants by public policy makers [Čaněk 2010b; Čaněk 2012]. An analysis of official statistics and several studies suggests that the number of foreigners who lost their work permits (or “exchanged” them for trade licences) came from employers who experienced economic pressure and had to rationalize their business activities. In this sense, the economic crisis provided an opportunity to increase the level of regulation over migrant labour’s participation in the Czech labour market as wage employees. On basis of fairness, the suspension of issuing new work permits might operate only simultaneously with increased protection of the rights of those immigrants who are already working in the country for several years. Instead, the Czech government applied a rather instrumental approach: “once we need them – we bring them, once we don’t – we send them back home.”

The historical evidence from economic stagnations in other developed countries shows that migrants most often prefer to stay in the destination countries [Drbohlav et al. 2010]. In this respect, Castles and Miller [2010] suggest that the highest probability of return during an economic slowdown is often among immigrants who are the most beneficial for the host society, because they have enough skills and opportunities to be occupied elsewhere, as well as those, who have a sufficiently secure status to return to the host country when the economic situation starts to improve. The state itself creates through rigid migrant labour regulations a number of barriers to the successful integration of non-EU immigrants (both qualified and unqualified) into the Czech labour market and society.

The article has been written as part of the project Migration to the Centre supported by the by the Europe for Citizens Programme of the European Union and the International Visegrad Fund.

This article reflects the views only of the author, and the Commission cannot be held responsible for any use which may be made of the information contained therein.