The purpose of this blog is to provide analytical commentary on formal and informal labour organisations and their attempts to resist ever more brutal forms of exploitation in today’s neo-liberal, global capitalism.

Thursday, 3 December 2015

Is migration from Central and Eastern Europe really an opportunity for trade unions to demand higher wages? Evidence from the Romanian health sector.

The social failures of the eastward enlargement of the European Union can hardly be ignored anymore. Instead of becoming part of welfare capitalism, Central and Eastern European workers’ hopes in a better life were betrayed and social rights have been undermined. In turn, workers, left without industrial and political channels to voice their social concerns, have reacted by leaving their countries en masse (Meardi 2012). Nevertheless, several industrial relations scholars predicted that the balance of class power would soon shift again in workers’ favour, due to the labour shortages in sending countries caused by “workers voting with their feet” (ibid.). Some scholars even saw in the massif exit of CEE workers an opportunity for CEE unions to win higher wages (Kaminska and Kahancov√°, 2011). By focusing on the distributional aspect of wage policies adopted by two competing Romanian trade unions in the healthcare sector, a recent study by Sabina Stan and Roland Erne published by the European Journal of Industrial Relations challenges the assumption of a virtuous link between migration, labour shortages and collective wage increases. 

The study shows that migration may also displace collective and egalitarian wage policies in favour of individual and marketized ones that put workers in competition with one another. Thus, the question is not so much whether migration leads to wage increases in sending countries, but whether unions’ wage demands in response to outward migration consolidate collective solidarity and coordination in wage policy-making or support its individualization and commodification.

Hence, migration is indeed far from being a mere factor in a virtuous cycle of labour supply and demand. Migration is rather part and parcel of global capitalism, with east-west migration more specifically being constitutive of the EU enlargement project. This is also the case in healthcare, where the integration of CEE healthcare sectors into global capitalism has been conducted through a series of neoliberal reforms that have accompanied the region’s integration into the EU. As part of a larger privatizing drive, the aim has been to increase the involvement of private actors and interests in the provision and funding of healthcare services by attempting to disengage states from healthcare provision and funding, introducing business-like models in the form of ‘new public management’ (NPM), or directly encouraging the rise of private healthcare units and funding. These measures have led to an increase in inequalities of access to services and in the segmentation of the labour market in the sector, triggering in turn an increase in healthcare worker out-migration. Migration and neoliberal healthcare reforms are thus commonly imbricated in global capitalism, and therefore play together, rather than separately, on union strategies.

The decentralization and the commodification of wage-setting arrangements in CEE not only reflect the introduction of the new European economic governance regime, but also herald a transformation of national labour markets. This brings unions face to face with the crucial dilemma of either pursuing egalitarian wage policies both across and inside sectors or engaging in the neoliberal promotion of wage competition among workers as a tool of ‘equal opportunity’.

But unions are only able to utilize the migration argument to strengthen their own capacity for action if they are confronted with high levels of outward migration and retain the capacity to act strategically in a coordinated manner in the area of collective bargaining, which is no longer the case in a majority of CEE countries. This has still been the case for unions active in the Romanian healthcare sector - even in very harsh times. However, while unions may use the migration argument to press for wage increases in the sector, they also combine them with distinct approaches to the distribution of wages and access to services. Thus, on the one hand, the ‘social-democratic’ union Federatia Sanitas – the larger and more encompassing union in the sector that predominantly represents nurses – used the migration argument to support its ‘solidaristic’ wage policy approach. It insisted on collective representation as the basis for the legitimacy of its actions, and tried to pursue the classical methods of collective bargaining and legal enactment to reduce wage differentials and to resist the exacerbation of inequalities of access through further healthcare privatization. By contrast, the ‘liberal-technocratic’ union Federatia Solidaritatea Sanitara din Romania (FSSR), which predominantly represents doctors and elite health care units, increasingly used the migration argument to justify its ‘individualistic’ wage policy approach; it mainly avoided the collective mobilizations organised by Sanitas and used its ‘expert’ knowledge to legitimize the promotion of an individual performance-related wage scheme in the sector.

Under the conditions of austerity, the migration argument lost much of its value as a factor for union power in CEE and led to a variety of union responses. In Romania, austerity brought renewed attempts by governments to privatize healthcare, continued outmigration and an attack on collective bargaining institutions. In this changed context, the government not only succeeded in weakening the capacity of Sanitas to act as a successful bargaining agent, notwithstanding the relatively successful protest movement of health care workers it initiated together with other professional organizations in autumn 2013. The declining ability of Sanitas to enforce binding sectoral wage norms also facilitated the rise of FSSR, which did not participate in the 2013 protests and which argues for individual, performance related pay systems in response to individual workers’ ‘exit threats’. 

As the current austerity policies accentuate the trend towards neoliberal industrial relations regimes in CEE, the adoption of individual, performance-related wage policies is likely to become a more prevalent response to increased east-west labour migration than general, collective wage rises; notably among unions that represent professions and grades particularly affected by east-west labour migration. In a larger perspective, it may thus not only be true that decreased overall union power leads to higher wage inequalities, but also that some unions actively contribute to legitimate, if not directly accelerate, this trend.

The study on which this blog is based has been published in the European Journal of Industrial Relations. It is part of Stan and Erne’s contribution to the Transnational Labour Project in Oslo, 2013/14:

Stan, S. and Erne, R. 2015. Is migration from Central and Eastern Europe an opportunity for trade unions to demand higher wages? Evidence from the Romanian health sector, European Journal of Industrial Relations, 1-17. Published online, 18 October. DOI: 10.1177/0959680115610724

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