Weekend Economists Silent Night Christmas Eve 2014

[Demeter]

56. Poland counts the cost of losing millions of its workers

http://uk.reuters.com/article/2014/12/05/uk-europe-demographics-poland-idUKKCN0JJ0KT20141205

"I'm staying here!," reads a grime-covered slogan on the side of a train in Opole, south-west Poland. It's a legacy of a local campaign aimed at discouraging young people from moving abroad. The campaign didn't work. After 1.2 million of its citizens migrated in the ten years since Poland joined the European Union, the country is counting the economic and social cost. Though its workers may have eased demographic difficulties in ageing countries like Britain and Germany, Poland now has a population crisis of its own.

Those who left were predominantly the young and economically active. For a while the billions of euros they sent back helped the economy - remittances were worth 2 percent of the country's GDP in 2009 alone - and enabled it to avoid recession but that money is drying up as they choose to settle permanently abroad. As a result Poland's social security system is creaking badly. The country will spend almost a third of its budget in 2015 subsidising pensions - a ratio only likely to increase as the population ages and grandchildren are born abroad.

"To put it very simply, millions of workers emigrating and not paying anything in means no pensions for millions of retirees," said Janusz Kobeszko, analyst at the Sobieski Institute, a Warsaw-based think tank.

Demographic projections show Poland will lose nearly 3 million people in the next 25 years, partly through migration and partly because women who leave Poland are more likely to have children than those who stay, official data shows. While Poland's pensions crisis looms, a more immediate migration-related problem is presenting itself: shortages of labour at home. In the Opole region, which has lost an estimated 10 to 15 percent of its population due to migration - the highest rate in the country - local businesses cannot find construction workers, carers, security guards, salespeople and cleaners.

One solution would be to welcome immigrants from elsewhere, perhaps from neighbouring Ukraine - so far immigrants make up less than 1 percent of the population. But despite the difficulty companies have in finding workers, unemployment is still high, at 11.3 percent, because the jobs on offer are low-skilled and low-paid. And that makes encouraging more immigrants politically risky, says Marta Jaroszewicz, analyst at the Centre for Eastern Studies, a Warsaw-based think tank. "Politicians don't want to talk about this, as voters think we can't afford immigrants," she said.

Similar patterns and problems are occurring all across ex-Communist countries of eastern Europe which are now EU members. In particular, Bulgaria's population is projected to shrink by a quarter come 2060. There too, migration is a major factor.

EURO-ORPHANS

Poland's dwindling population has brought social problems as well, says Aleksandra Walas, head of a social research centre in Opole, whose office is wedged in between a tax company for emigrants and a counter issuing documents for claiming child benefits abroad. In 2013, there were over 10,000 of what she describes as "euro-orphans" in the region - children with one or more parent working abroad. That number has risen 8 percent since 2008. Walas's team has also identified around 1,000 elderly people in the region who have been abandoned by their emigrating families, something she warns will become more of an issue as the country's remaining population gets older. Pawel Landwojtowicz, a family counsellor from Opole who is also a Catholic priest, said working abroad is a factor in around 60 percent of the cases he encounters.

"I've seen traditional, multi generational families torn apart by emigration, never to quite recover."

Halina, a hairdresser from the Opole region, says her family is better off financially because her husband has been a construction worker in Berlin for nearly two decades. But she adds there is no doubt it has put a strain on them.

"I've had to be both mother and father to my two kids, and my son used to resent his dad for not being around."

Poland's government offers guidance to people thinking about coming back, but former Prime Minister Donald Tusk's plans to attract large number of emigrants back with tax breaks and soft loans did not materialise. Tusk is now working in Brussels. Those tracking Polish migration say that the outward flow will not be reversed as long as wages are significantly higher in other parts of Europe. A recent study showed that only a half of Polish emigrants were planning to return home. Since 2004, some 70,000 Poles have taken up British and German passports.

"Let's be realistic. They're not coming back," said Jacek Suski, head of the labour office in Opole. "Unless it's to lay their bones to rest."