Jobs and the Future of Work

The free movement of people: what it is and why it matters

Monika Cyrek, a Polish national who works in a grocery store run by her mother that sells mostly Polish products, poses for a photograph in Walton-on-Thames, Britain June 18, 2016. "If we're not wanted here, probably a lot of people will leave and try other places," said Cyrek. Picture taken June 18, 2016.

It cuts unemployment and boosts economies. So why is it controversial? Image: REUTERS/Peter Nicholls

Rosamond Hutt
Senior Writer, Forum Agenda
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Migration

At the time of writing, citizens of the European Union can live and work in any of the EU's 28 member states, as well as in three non-EU countries in the European Economic Area, and Switzerland.

Europeans see freedom of movement as the bloc's biggest achievement, according to research, with many rating it above peace, the single currency and student exchanges. Eurostat data from 2012 shows that 14.1 million EU citizens were living in a member state other than their own in that year.

But the principle of free movement is controversial. It was a key issue in Britain’s referendum campaign in June, and is now a critical part of Brexit negotiations. EU leaders have made clear that the freedom of EU citizens to migrate to Britain is non-negotiable if the UK wants to retain access to the single market.

 European Economic Area
Image: Commons.wikimedia.org

Why is it important?

Freedom of movement is one of the four basic freedoms of the single market – the others being free movement of capital, goods and services.

These freedoms were enshrined in 1957 in the Treaty of Rome, which established the EU’s predecessor, the European Economic Community (EEC).

Freedom of movement began as a way to encourage people to travel to fill jobs after the Second World War. The idea was that a mobile workforce would help boost the economies of the EU's six founding members, and perhaps discourage future conflict on the continent.

Almost 60 years on, the system allows citizens to work, study and retire anywhere in the European Union – plus Norway, Liechtenstein and Iceland, all three of which joined the European Economic Area (EEA) and are governed by the four freedoms. There's also Switzerland, which has a bilateral deal with the EU when it comes to border controls.

Who benefits?

Free-movement deals allow workers to migrate from countries where jobs are scarce to others where jobs are many, and where labour is in short supply. In recent years, workers from southern European countries, which have been hit hardest by the Eurozone crisis, have been heading north to find employment.

The OECD estimated that free movement has lowered the average unemployment rate across Europe by up to 6%. This will become increasingly advantageous as Europe’s working-age population shrinks by an expected 12% by 2030, resulting in skills and labour shortages that will put a strain on the EU's economic growth. And that's even before the effects of Britain's decision to leave the bloc are factored in.

The European Commission says that extending free-movement rights to Eastern Europe in 2004 and 2007 increased the overall GDP of the old member countries by almost 1%. But not all countries are feeling the benefits. While settlers in Eastern European countries have contributed to the wealth of other EU nations, says the International Monetary Fund, their departure in droves since the fall of Communism has held back growth and slowed the rise of living standards in their home countries.

Over the past 25 years, almost 20 million mostly young and skilled workers have left Eastern Europe to seek better opportunities abroad.

 EU migration from East to West
Image: IMF

Why is it so controversial?

Britain and some other countries are concerned about EU migration, particularly from poorer Eastern European nations. In a 2014 referendum, Switzerland voted for controls on migration, which, if imposed, could mean the nation loses access to the single market.

According to the Migration Observatory at the University of Oxford, there are just over 3 million non-British EU citizens living in the UK – up by about 2 million since 2004 when the first Eastern European countries joined the EU.

Around 1.3 million Britons are living in other EU countries.

 Number of EU-born in the UK, 1993-2015
Image: Migration Observatory

While EU migrants are net contributors to the public finances of their destination countries, some politicians argue that the right to free movement encourages “welfare tourism” and puts pressure on public services, making it more difficult for local people to find work.

In practice, EU citizens who have been living in another member state for less than five years have limited access to the welfare systems of their country of residence. To a certain extent, the benefits to which they’re entitled depend on their employment status and the rules of the country they’re living in.

Who are the free movers?

A Eurobarometer survey found that in 2010, 10% of people in the EU had already lived and worked in another member state, while 17% said they planned to move elsewhere in the EU.

As the chart below shows, the right to free movement is being exercised by citizens from across the EU, as well as the newer member countries.

 Movers and Shakers
Image: Economist.com

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