The West is losing ‘cheap’ Central and Eastern European workers due to the pandemic

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Hundreds of thousands of Central and Eastern Europeans working in Germany and Great Britain have returned to their homelands since the beginning of the pandemic, and it is unclear how many of them will head west again after the crisis ends. Regardless of where they choose to end up, the disruption of migration flows is already proving to have major economic consequences for the whole continent. Workers from the Balkans and those from Central and Eastern Europe lost their jobs due to the pandemic in Western Europe and were forced to return home. When redundancies began in the West, workers from the East were the first to be hit. The migration flow that has been supplying developed European economies with cheap labor for years has thus reversed this year. Unexpected boom Svilengrad is a small Bulgarian town located on the border with Greece and Turkey, which survives mainly on revenue from casinos and custom duties.

Like other rural cities in the poorest EU member state, it has been dying out quickly over the last two decades. Bulgaria is considered the country in Europe to be depopulating the fastest. While in 1988 it had a population of 8.9 million, at the end of last year there were 2 million fewer people. The cause? A low birth rate combined with a high emigration rate. During this spring, however, Svilengrad experienced an unexpected population boom. “People are returning from all over the world, but mainly from Western Europe,” explained Mayor Anastas Karchev. A similar phenomenon can now be observed throughout the region. “It is a silent tsunami that is rolling through Eastern Europe along with the pandemic,” Bulgarian economist Ognjan Georgiev wrote in an article for Foreign Policy. In the first months after the imposition of restrictive measures, about 200,000 people returned to Bulgaria. Most of them previously worked in Germany, the Netherlands, and the United Kingdom. They cited the desire to be with their loved ones in a difficult time and a loss of work as the reasons for their move back home. It is not yet clear how many of them will decide to travel to Western Europe for work once the pandemic ends. In a survey by Sofia’s European Council on Foreign Relations, 10 percent of respondents said they would stay home and 16 percent have not yet decided. Georgiev stated that the coronavirus has only accelerated the trend of recent years, with more and more Central and Eastern Europeans returning home. The reason is the steady growth of economies and wages in post-communist countries such as Romania, which has undergone a remarkable transformation from brutal communism to one of the largest agricultural powers in the EU. “We must also take into account the current trend of shortening supply chains. More and more goods sold in the EU will be produced or assembled in Europe, and the influx of workers into Eastern Europe will be more than a desired phenomenon,” explained Georgiev. Economic consequences At present, however, the mass return of Bulgarian compatriots has mainly had unfortunate economic consequences for Bulgaria. Not only does it continue to feed the rise in unemployment and burden the social system, but the economy of the poor Eastern European country is facing a loss of remittances (money sent by emigrants from abroad to their country of origin).

At the end of September, economists estimated that money transfers to Bulgaria had fallen by about €2 billion since the beginning of the coronavirus crisis, representing about 3.3 percent of Bulgaria’s GDP. The inflow of money from abroad is also drying up in Serbia. According to data from the local central bank, Serbs abroad sent home €1.05 billion in the period from January to May, which is about a third less than in the same period last year. Similar disappointing numbers have come from Kosovo, Bosnia, and Romania. Western Europe suffers from the outflow of workers Western Europe is already feeling the outflow of cheap workers. In the spring and summer, countries such as Italy and Germany eagerly sought compensation for tens of thousands of seasonal workers from Poland, Romania, and Morocco, who harvested broccoli, asparagus, and tomatoes in their fields. Amid the second wave, there are fears that the outflow of cheap labor will be more permanent. The British Bureau of Statistics stated that the number of foreign workers has fallen by 700,000 since the start of the pandemic due to lockdowns and redundancies. This represents about 2 percent of the total workforce in Great Britain. According to experts, the dramatic decline is mainly due to the outflow of immigrants from eight Eastern European countries such as Poland, Lithuania, and the Czech Republic. Their number fell from 975,000 to 710,000 during the first nine months of this year. “There are fears that some EU citizens will not return to the UK. This is very likely to cause difficulties in finding a workforce,“ Human Resources and Employment expert Gerwyn Davies told The Times. The coronavirus crisis is also exacerbated by a shortage of skilled workers in Germany. The greatest demand is in construction and healthcare. Experts estimate that the Federal Republic must attract 30,000 experienced nurses and paramedics to the country each year.

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