New statistical analysis is bringing some welcome clarity to the migrant worker debate, writes Marc Coleman, Economics Editor
As last month's Irish Times/ TNS mrbi opinion poll found, some 78 per cent of respondents want a system of work permits introduced for workers from accession states.
Fifteen countries constituted the EU before its enlargement on May 1st, 2004. Only three of them - Ireland, Sweden and the United Kingdom - allow accession state citizens to work in their countries without permits.
The poll findings follow months of emotive, and sometimes irrational, comment which created the impression of an Irish labour market groaning under the unbearable weight of migratory pressures.
However, some 59 per cent of respondents in the poll agreed that migrant workers had been good for the Irish economy. How can these findings be reconciled?
This is clearly one debate that needs analysing and two separate reports published this week aim to do this.
The first comes from AIB economists Oliver Mangan and John Beggs, who have today published a thorough and competent analysis of immigration and how it affects the economy. Far from being flooded, the 159,300 foreign nationals here make up 8 per cent of our labour force, barely above the 7.3 per cent in the 15 pre-enlargement states.
And far from all of them working in the construction sector, only 9 per cent of that sector's workers are foreign nationals, a figure broadly in line with their 8 per cent share of the entire labour force.
The findings of Mangan and Beggs concur with public sentiment in the area of accession. They do find that the share of foreign nationals from accession countries here, some 31 per cent, is the highest in the EU.
This is unsurprising given we are one of only three countries to throw open our borders, and that growth here is much stronger than in Sweden or the UK.
It has been assumed by many that this is causing a race to the bottom. The authors disagree. "Ireland is currently enjoying a particularly strong building boom as we raise our social and infrastructural standards. Right now we need these workers."
Tomorrow the European Commission will join the debate. In a report on labour mobility for accession country citizens, it is expected to praise the impact of migrants from accession states on our economy. Far from being a burden, 85 per cent of migrant workers in Ireland from accession states are employed, compared to 67 per cent of Irish citizens and 57 per cent of workers from non-EU states, according to Eurostat figures.
Unlike previous arguments, these reports are not open to accusations of partisanship.
The AIB report is based on data from the Central Statistics Office (CSO), while the commission report is expected to rely on data from Eurostat, the official EU statistical agency.
Other data from the CSO is particularly clear in relation to wage trends. With the exception of the financial services sector they are everywhere rising by at least the rate of inflation.
In the construction sector - the alleged source of a migrant-related race to the bottom - wage rates are rising by around 6 per cent, or twice the rate of inflation.
What is also interesting is that the proportion of workers in a trade union in this sector is around 27 per cent. And yet wage growth is considerably stronger than in the industrial sector where unionisation is 37 per cent and wages are growing by 3 per cent.
As the share of migrant workers in both construction and industry is broadly equal at 9 per cent, there is no evidence to suggest that wage differentials can be explained by the extent of migrant workers.
In one sector the most recently available data shows low wage growth. In the banking, insurance and building societies sector, wages grew by just 1.6 per cent in the third quarter of last year and fell in year-on-year terms. However a closer analysis of this data shows that this is a seasonal trend which has been evident in this sector since the late 1980s - long before EU enlargement, never mind the onset of the Celtic Tiger.
In autumn the sector usually recruits people from third level institutions and this expands the numbers on lower wages. As financial sector recruitment from third level institutions has been particularly strong this year, so wage levels appear to have been depressed. The AIB report suggests that this phenomenon has little or nothing to do with the share of foreign nationals in this sector, which at 8.2 per cent, is practically equal to the overall share of foreign nationals in employment. Last week's live register figures are clear about one other point: In spite of this immigration, there is no discernible net job losses. The live register rose in January by a mere 400. This compares with the 100,000 extra jobs being created in the economy last year.
Last week the social partners began their discussions on wage growth and labour conditions in Ireland in earnest. If they are to be rational and meaningful, the latest findings should play a central role in determining those deliberations.