PROSPECTS FOR FOREIGN WORKERS IN WESTERN EUROPE

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00865A002600190001-4
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 21
• Document Creation Date: December 12, 2016
• Document Release Date: May 3, 2002
• Sequence Number: 1
• Publication Date: July 1, 1975
• Content Type: IM

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Secret
Prospects for Foreign Workers
in Western Europe
Secret
CIA No. 9678/75
July 1975
Copy N2 242
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F I
This special study examines the political and economic repercussions of
growing unemployment among foreign workers in Northern Europe. Although the
number of "guest workers" has fluctuated markedly in the past as market conditions
have changed, the current world recession has generated unusually severe problems
in both labor-importing and labor-exporting countries as the northern governments
try to reduce their foreign worker communities. This memorandum analyzes (a)
the political and social problems stemming from the inability of the northern
countries to assimilate those foreign workers who are indispensable to their
economies and (b) the negative impact of the return of surplus migrant workers
on Southern Europe, where several governments are struggling to maintain political
stability.
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Prospects for Foreign Workers
in Western Europe
The position of the 8 million migrant workers in Western Europe continues
to deteriorate under the impact of prolonged recession. The labor-importing
northern countries plan further cutbacks in their foreign work forces in the months
ahead, while the labor-exporting southern countries face intensified economic and
political problems in absorbing returning workers. As yet, the twin threats of
political backlash against workers still in the North and of radicalism among
repatriated laborers in southern countries have not reached serious proportions.
Economic recession has boosted unemployment in Northern Europe -- West
Germany, France,* the United Kingdom, Austria, Switzerland, Benelux, and
Sweden - to record levels. The mild economic upturn expected toward the end
of 1975 will not reduce joblessness for some time. Thus northern governments
will maintain restrictions on the employment of foreigners to protect indigenous
workers at least through mid-1976.
The return from the northern countries of several hundred thousand migrant
workers will add sharply to unemployment and to balance-of-payments problems
in Southern Europe over the next 24 months. In 1975 the total increase in the
number of jobless workers attributable to the falling demand for foreign labor
in Northern Europe is expected to range from 1% to 2% of the labor force in
Turkey, Italy, and Spain and from 3% to 5% in Yugoslavia, Greece, and Portugal.
All major labor-supplying countries will experience a decline this year in worker
remittances, a key source of foreign exchange.
* For the purpose of this analysis, France is considered a northern, highly industrialized European country.
Note: Prepared by OER and OCI for the NIO for Western
and queries regarding this publicati
of the Office of Economic Research,
of the Office of Current Intelligenc
on may be directed to
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Despite these problems. most southern governments are not taking major steps
to deal specifically with the returning guest workers. These workers have
traditionally shunned political activism. Now, however, Communists and other
extremist groups, particularly in Italy, Spain, and Portugal, may meet with some
success in their proselytizing. A more prolonged recession than we currently
anticipate probably would Force the southern governments to counter the appeal
of these extremist groups with more decisive programs to curb unemployment and
encourage job-creating foreign investment.
Host governments in the North for the most part have not been faced with
serious protests by unemployed guest workers, although small demonstrations have
occurred in Paris and some industrial centers in West Germany. Many jobless
migrants have simply returned home. Others are able to subsist temporarily on
welfare benefits and unemployment pay. Many of those who have not lost their
jobs are reluctant to become politically active for fear of triggering further
restrictions.
Guest workers will continue tc press host governments for an improvement
in their living and working conditions. But with budgets tight, northern governments
are unlikely to implement FC recommendations to upgrade housing and vocational
and language training for the migrants. Over the long run, this neglect may prompt
the guest workers -- disenfranchised and underrepresented in trade unions - to
resort to political protest. Native workers in Northern Europe, who had been
upgraded to more highly paid and prestigious jobs, are now sliding back down
the job ladder. Their resentment against foreigners in the low-end jobs will rise
the longer their governments fail to take effective antirecession measures.
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The Importance of Migrant Labor
1. Over the past 25 years, the industrialized countries of Northern Europe
have advanced to unprecedented levels of economic prosperity. Millions of foreign
workers, primarily from less-prosperous Southern Europe, have played an important
role in this economic growth by filling burgeoning demand for unskilled labor.
These laborers - the so-called guest workers - began flocking to the
manpower-short northern cities in the mid-1950s in search of employment and
higher wages. Their presence supported economic expansion in Northern Europe.
while the earnings that they sent home boosted personal incomes and provided
much-needed funds for investment in Southern Europe.
2. The foreign component of the North European labor force has risen
sharply in the past 15 years. In West Germany and Austria, for example, the
proportion of foreign workers in the labor force rose from less than 1% in 1960
to 11% and No, respectively, in 1974. Switzerland has relied heavily on foreign
labor throughout the postwar period, with migrant workers accounting for roughly
one-fifth of the labor force.
3. The guest workers -- presently close to 8 million -- have functioned as
a safety valve, their numbers expanding and contracting in response to market
conditions in Northern Europe. In expansionary periods, easy communications and
the lure of high wages - together with provisions for free movement of labor within
the European Community - have attracted an influx of immigrant labor. In time.,,
of recession, the lack of work and tighter immigration controls have caused a sizable
flow of labor back to Southern Europe. The economic slowdown in West Germany
and neighboring countries in 1966-67, for example, led to the rapid departure of
more than 400,000 guest workers from the North European labor market.
Social Problems
4. For a number of reasons, including shifting market conditions, the guest
workers have not been integrated into the domestic labor forces or the social fabric
of Northern Europe. Studies have shown that only a small percentage desire to
resettle permanently. Most expect to return to the homeland, after profiting from
the experience, skills, and wages earned abroad. One exception to this pattern is
the United Kingdom, where more than 80% of the foreign labor comes from Ireland
and English-speaking countries in the Commonwealth and where many settle
permanently.
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5. Discrimination and prejudice, present in varying degrees in the
labor-importing countries, discourage permanent resettlement and make social
adjustments difficult. Most guest workers have been recruited essentially to fill
only the unskilled and semiskilled jabs vacated by indigenous workers moving up
the economic ladder. Vocational training in many cases is inadequate, although
some firms with government support - particularly in West Germany and
Switzerland - offer high-quality courses in industrial mechanics. Language
instruction, except in Sweden or in France where government-paid instructors are
readily available, is even more haphazard and is often left to private associates
or individuals.
6. The educational needs of those guest workers who bring their families
pose especially serious social problems, given the strong allegiance of Mediterranean
peoples to their cultural heritages. Because most governments in Northern Europe
have refused to finance full-time foreign schools on the grounds that this would
hinder integration, most immigrant children struggle in the local educational systems
to learn the new languag.,., often 'alling behind their age groups.
7. As for housing, most employers are, at least initially, required by law
to provide adequate accommodations for immigrant families. The most notable
exception is again the United Kingdom, where government policy - reflected in
the Commonwealth Immigration Acts of 1962 and 1965 - has been to discourage
immigration. Publicly financed hos.tt?ls for the large number of single guest workers
are common in France and West Germany. In the private housing market, guest
workers often encounter discrimination and find themselves living in substandard
conditions.
8_ The guest workers are thus essentially a lumpen proletariat, i.e., an
uprooted class that takes on the most menial tasks. Their presence has made it
practical for the indigenous labor force to abandon low-end jobs and to aspire
to higher income and social status By making indigenous workers more receptive
to the idea of individual achieverrent and to other middle-class attitudes, rather
than collective advancement through class struggle, the guest workers conceivably
have contributed a moderating pclitical influence in Northern Europe.
9. Given their low status and poor living conditions, resentment against the
guest workers becomes acute only in times of economic recession and
unemployment. Switzerland, where; this resentment is particularly deep-seated, is
an exception. The government has for several years been pressed by the trade unions
and two distinctly xenophobic political parties to limit the number of resident
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foreigners. Many Swiss have expressed fears of Ueberfremdung (inundation by
aliens) and have complained that the high concentration of foreigners is changing
the basic character of the country.
Declining Demand for Foreign Labor
10. The global economic recession of the last 18 months has led to
widespread layoffs in most West European countries and has sharpened resentment
against the migrant workers. Unemployment (seasonally adjusted) currently exceeds
6% of the labor force in Belgium and 5% in West Germany and the Netherlands.
Joblessness is approaching 4% in Great Britain and France and nearing 10% in
Denmark. These unemployment levels - approximately 80% above mid-1974 - are
extremely high by European standards.
11. In response, most governments are taking steps to protect their indigenous
workers:
? West Germany, France, Belgium, Denmark, and Luxembourg have banned
the recruitment of foreign labor from outside the European Community.
? West Germany and France have stiffened penalties for hiring illegal
immigrants or smuggling them into the country.
? The EC Commission is urging all member states to tighten and coordinate
measures to restrict the influx of illegal migrants.
? Bonn has directed West German labor offices to give preference to
German nationals in filling job vacancies. Employers seeking to hire
foreigners must demonstrate that they are unable to find native Germans
to fill the job.
? Austria intends to establish both provincial and national quotas for
foreign workers and to refuse work permits when employment of
nationals is threatened.
? The Netherlands has put a ceiling on the immigration of foreign workers
and the number each firm may hire.
? Switzerland, despite an exceptionally low unemployment rate, has
reduced the number of work permits issued annually and has eliminated
exemptions granted for foreign workers in hospitals and schools and on
farms.
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1.2. Legal impediments to the recruitment of foreign workers, combined with
the high concentration of foreigners in those industries hardest hit by the
recession - construction, automobile manufacture, and tourism -- have sharply
reduced the demand for foreign labor. Unemployment among resident foreign
workers is skyrocketing, rising faster in most countries than the jobless rates for
nationals. In West Germany., for example, the unemployment rate for foreigners
was 6.9% in May 1975, compared with 2.2% a year earlier. The corresponding
rates for German nationals were 4.1% and 2.0%.
1.3. The growing scarcity of jobs has sparked the return of hundreds of
thousands of migrant workers to homelands already beset with severe economic
and political problems. Moreover., the influx of foreigners to the northern
labor-importing countries has slowed :onsiderably. During the first three-quarters
of 1974, the number of third country migrant workers entering the European
Community dropped by nearly two-thirds from the same period a year earlier.
The number of foreign workers in West Germany -- the largest employer of guest
workers in Western Europe - has declined by more than 400,000, or nearly 16%,
since late 1973. Both Switzerland and Austria have reduced their foreign work
force by 11 % over the same period.
Political Implications for Northern Europe
14. During the past year, the European Community has recommended an
action program to improve the living conditions of the guest workers and integrate
them into the body politic. Although the program consists primarily of
recommendations to member governments, there are plans to use the European
Social Fund - a $400 million pool geared principally to retraining displaced
workers -- to finance better vocational and language training and to establish
educational facilities to help) the guest worker and his family to adjust to their
new cultural environment. The EC Commission recommends that the system of
social security benefits and privileges for guest workers from EC countries be made
more comprehensive and uniform, arc. it urges that these same benefits be gradually
extended to workers from non-EC countries. The Commission also recommends
that all guest workers be granted full voting rights in local elections by 1980;
so far only Sweden, a non-EC member, has acted to give the immigrant workers
the vote in local elections, beginning next year.
15. Few governments seem prepared to do much for the guest workers, at
a time when budgets are tight. Indeed, Bonn is exploring the possibility of limiting
the privileges enjoyed by guest workers from EC countries and reducing social
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security benefits for all foreign laborers. Some governments may seek to shift more
of the financial burden to the employers. The French government is reviewing
its overall policy with this goal in mind.
16. The trade unions also have a spotty record. The Deutscher Gewerkschafts-
bund, West Germany's major labor organization, recently recommended the
retention of the ban on migrant laborers from non-EC countries and asked for
an increase in the tax allowance for the guest workers' dependents remaining in
their native lands to prevent a further influx of foreign children into the Federal
Republic. Some unions have offered little more than verbal opposition to some
rather heavyhanded measures of the Federal Labor Office to send the guest workers
home. In a few cases, employers have shown more consideration -- defending guest
workers whose work permits have expired and distributing unauthorized
compensation pay. Most nonunion guest workers, however, are essentially
defenseless once they lose their work permits. liven those holding union membership
lack political clout because they are underrepresented in the higher echelons.
17. Although small demonstrations by unemployed guest workers have
occurred in Paris and some industrial centers in West Germany, the northern
governments, for the most part, have not been faced with serious protests. Many
of the unemployed foreign laborers have simply returned home; others are able
for a time to subsist on social welfare benefits and unemployment pay. Many or
those who have not lost their jobs are evidently reluctant to become politically
active for fear of triggering further restrictions.
18. Undercurrents of prejudice or racial feelings undoubtedly exist and may
cause voters in some countries to support parties that appear unreceptive to the
arrival of more immigrants. Nevertheless, political parties in Northern Europe have
not been generally inclined to exploit the guest worker problem as a campaign
issue :
? Despite the history of racist sentiment in West Germany and Austria,
no xenophobic political movements have emerged.
? In Britain, the debate about foreigners fanned a few years ago by
conservative leader Enoch Powell has abated. The most notable
antiforeign party, the National Front, in the two parliamentary elections
last year, averaged only 3.1% of the vote in the constituencies in which
it ran candidates.
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? In France, prejudice against immigrant workers is primarily directed at
the Algerians, who account for 24% of the foreign laborers. Tensions
are particularly strong in the area of Marseilles and in industrial centers
in the North. President Giscard is making efforts to improve working
conditions for Algerian immigrants, but local animosity has a long history
and persits even in relatively good times.
? Violent confrontations have erupted periodically between Dutch citizens
and Turkish guest workers, without taking on political overtones.
19. Only Switzerland, where foreigners make up nearly 17% of the
population, seems to have the potential for serious political troubles. In particular,
the Italian immigrant laborers are seen as a threat to the German-French-Italian
ethnic balance of the country. Two parties - the National Action Party and the
Republican Movement - have since 1970 periodically submitted proposals to reduce
substantially the number of foreign nationals living and working in Switzerland.
The last proposal, sponsored by James Schwarzenbach's National Action, called
for a reduction in foreign residents by 50%. The Swiss, well aware of how heavily
their economy depends on foreign labor, rejected the proposal in a national
referendum last October by nearly 70'3. In 1970, however, National Action garnered
46% of the vote in a referendum that called for limiting the number of foreign
nationals to 10% of the population in each canton and 25% in Geneva Canton.
This support is astonishing in a country were unemployment among the nationals
seldom numbers more than a few Hundred persons.
20. Schwarzenbach's near success in 1970 prompted the federal government
to launch its own "stabilizjjtion program" by drastically reducing the number of
work permits issued to foreigners. Despite these measures, the total number of
non-Swiss residents continues to increase -- largely through births and the
admittance of families of seasonal workers.
21. Schwarzenbach now heads the Republican Movement, and his party has
a petition before the government requesting that foreign nationals be limited to
12.5% of each canton's population. For the moment, Schwarzenbach is biding his
time, using the petition as a lever to get Bern to adopt tougher restrictions.
22. The Swiss example notwithstanding, the willingness of the northern
countries to employ Mediterranean la nor has contributed to the sense of community
in Western Europe. The provision in the Treaty of Rome granting Italian guest
workers free access to job opportunities in the EC has been a crucial factor in
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binding Italy in close cooperations with its Community partners. The rotation of
laborers from other Mediterranean countries has served to draw some of the most
backward European regions closer to those northern countries in the vanguard of
postwar political and economic development. This process is particularly relevant
today for Spanish and Portuguese leaders who are struggling to find new principles
for organizing their societies.
Economic Implications for Labor-Supplying Countries
23. Northern Europe's present inability to absorb the surplus manpower of
other countries is a matter of particular concern to Turkey, Greece, Yugoslavia,
Italy, Spain, and Portugal. The exodus from these countries of tens of thousands
of migrant workers annually during the last decade has considerably eased strains
on domestic labor markets and has kept unemployment down. Workers abroad
currently equal approximately one-fifth of the domestic labor force in Yugoslavia
and Portugal (see Figure 1). The corresponding shares for Turkey, Greece, Italy,
and Spain range from 5% to 8%.
24. The declining demand for foreign workers in Northern Europe has
contributed to a pronounced deterioration of labor market conditions in southern
countries. Unemployment has climbed to 15% of the labor force in Turkey.
compared with an average rate of 12% in 1973. Yugoslavia, which estimates that
more than 100,000 workers have already returned home from jobs in Western
Europe, reports a 19% increase in joblessness over the last year to a current rate
of 10%. Unemployment is also on the rise in Italy, Greece, Portugal, and Spain.
25. The impact of rising joblessness on incomes is particularly acute in
Turkey, which has no formal unemployment compensation scheme to assist laid-oft'
domestic workers or those returning from abroad. Greece, Italy, Yugoslavia, Spain,
and now Portugal provide benefits to workers laid off at home. Only in Italy,
however, do returning workers from abroad qualify for assistance.
26. A marked reduction in workers' remittances has accompanied higher
jobless rates in most labor-supplying countries, compounding balance-of-payment
difficulties and adding to a squeeze on family income. Worker remittances usually
constitute nearly half of Turkey's current account receipts and are a primary source
of foreign exchange for Portugal, Yugoslavia, and Greece. After years of steady
growth, remittances declined in 1974 by an estimated 19% in Spain, 16% in Italy,
12% in Greece, and 9% in Portugal (see Figure 2). Remittances to Turkey and
Yugoslavia continued to rise in 1974, although at a much lower rate than in
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Figure 1
Southern Europe: The Importance of Foreign Workers
to Labor-Exporting Countries
Workers abroad as a share
of the home labor force
Remittances as a share of total
current account tcceipts
40%
8% 8%
6% 6%
Greece Italy Portugal Spain Turkey Yugoslavia
preceding years. The general decline in remittances to South European countries
coincided with widening trade deficits, caused in large part by the skyrocketing
cost of imported oil. The result has been substantial current account deficits in
most of these countries, with Italy experiencing the most severe payments squeeze.
Political Implications for Southern Europe
27. The flow of surplus labor to Northern Europe has provided a safety valve
for South European countrie,, whose social and political problems might otherwise
have been aggravated by additional unemployment and underemployment. Whatever
their political coloration, all the governments in Southern Europe are now
concerned that the return of guest workers adds to the growing pool of
unemployment. Governments worry, especially in Spain and Portugal, that the
returnees will gravitate to right- or 'eft-wing groups that promise them jobs.
Degree of Radicalism
28. There is little solid information indicating the degree of radicalism among
the returning guest workers. Certainly, in many cases, repatriated laborers display
considerable individualism and enterprise. This is particularly true of Turkish guest
workers, many of whom plan to invest their nest egg in a small business or trade
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1500
1000
500
Figure 2
Southern Europe: Workers' Remittances from Abroad
Million US $
Italy
1500 r
0 ` 0
1970 71 72 73 74 1970 71 72 73
Portugal Spain
1- 1:500 r
0 1 1 1 g
1970 71 72 73
0
1970 71 72 73
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back home. About one in tell presently working in West Germany invests his savings
in business or industrial projects designed to create more jobs in Turkey. Nearly
7,000 guest workers in West Germany are providing funds for one specific project --
the construction of a large cement factory in central Anatolia. This conservative
ethos makes most Turkish migrants unresponsive to Communist propaganda. The
Communist Party is outlawed in "Turkey and seems to have little success in
proselytizing among workers living abroad.
29. The exposure of Yugoslavs to the dynamic pace of life in the capitalist
countries of Northern Europe over the past 15 years or so has not posed any
detectable ideological-political threat to the Yugoslav Communist system. There
is no evidence that the 100,01)0 Yugoslav workers who returned to their homeland
last year have become politically active in ways unacceptable to the Communist
leaders or that they have made common cause with the occasional dissidence
existing among national minorities or youth. The absence of radicalism or antiregime
activity among Yugoslav guest workers is all the more surprising because West
Germany and Austria have been the havens since the war of many anti-Communist
emigres who have tried with only limited success to enlist the support of guest
workers.
30. Communist parties from the other four labor-supplying countries have
organizations in the North operating among the guest workers. Italian, Greek, and
Spanish Communists are active in West Germany. Reliable figures are rare, but
West German security officials reported two years ago that these three groups
collectively had about 30,000 adherents - less than 5%, of the migrant laborers
from these three countries. A nationalist spirit is a strong characteristic of the
Spanish Communists. This active party, for example, sponsored an anti-Franco rally
with the Swiss Communists last June in Geneva for Spanish guest workers
throughout Northern Europe. In recent months, the exiled Spanish Communist
party, which operates out of Paris, has been aggressive in recruiting additional
supporters. In response, alarmed Social Democrats in West Germany have thrown
their support behind the Spanish Soe:,ialist Party, including assistance to win the
allegiance of the guest workers.
31. The Portuguese Communists - traditionally far more pro-Soviet than the
Spanish Communists - propagandized among the some 800,000 Portuguese
residents in France for years before returning to the political scene in Lisbon last
year. These operations are undoubtedly continuing, but their impact appears to
be limited. The Portuguese Communist Party is banned in France, and its estimated
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strength last year was less than one thousand members. Friction has traditionally
marked relations between the Portuguese and Spanish Communists, and we have
no evidence they are cooperating in proselytizing among guest workers in France.
Moves by Southern Governments
32. Italian guest workers seem to have been the most successful in attracting
the attention of government officials. An estimated 50,000 migrant workers had
returned to Italy by last March, and the expectation that their ranks would double
by midyear has led Italian political leaders to take a serious view of the problem.
In early March, the Ministry of Foreign Affairs convened a six-day conference on
the problems of Italian migrant workers, the first such meeting in more than
50 years. It was attended by representatives of Italian migrant workers, trade
unions, and political parties as well as representatives from several foreign countries
and international organizations.
33. Prominent among the complaints of migrant workers were
? the lack of adequate schooling abroad, especially in the Italian language;
? poor service to migrants by the Italian consular corps;
? virtual disenfranchisment, since migrants must return to Italy in order
to vote; and
? the inability of returning guest workers to draw on the wage supplement
fund, which is reserved for those on reduced hours rather than those
without jobs.
34. Foreign Minister Rumor gave the delegates a "moral commitment" to
take action on most of the problems, and some steps including doubling the budget
for migrant affairs have already been taken. The voting question, however, is likely
to remain a sore point. Only about 10% of the migrant workers return to Italy
to vote, and not much is being done to raise the figure. The government is giving
no consideration to arranging for absentee balloting.
35. Both the Italian left and the right target returning workers for
recruitment. Given the low participation by migrants in elections, these efforts
promise only small success. Among those who choose to return home permanently.
on the other hand, resentment against the Italian government for its lack of support
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may take a political form.. If the political atmosphere of the conference in March
is any guide, the Socialists and the Communists are in a better position than the
Italian right to proselytize among the permanent returnees.
36. The other governments in the labor-supplying countries have moved
slowly in addressing the guest workers' problems. Ankara and Belgrade have
attempted to find other mLorkets for their surplus labor. Libya has reportedly agreed
to accept a few thousand Turkish workers and may accept more at a later date.
Turkish leaders are evide fitly allowing their concern over unemployment to
outweigh concern that the political and religious character of the Libyan regime
may influence Turkish workers. Czechoslovakia, with its low birth rate, has agreed
to import 2,000 Yugoslav; for its construction and textile industries.
37. Madrid, primarily concern~_d over potential unrest among the many young
Spaniards who would normally be -..eaving for jobs abroad, is giving higher policy
priority to maintaining high employ nent than to curbing inflation. The Portuguese
military leaders are preoccupied with other aspects of their faltering economy but
have taken some steps to increase the disposable income of Portuguese working
abroad. A recent government decree allows guest workers to withdraw up to $4,000
from their savings accounts, and government officials have negotiated a 40%
reduction in commercial air fares to several labor-importing countries in the North.
During his visit to Paris in early June, President Costa Gomes unsuccessfully asked
French leaders to improve social security benefits for Portuguese guest workers
and lift the ban on migrant laborers from non-EC countries.
38. The recession in the major developed countries is bottoming out, with
a mild upturn in the cards beginning toward the end of the year. Because
employment trends lag behi rid overall economic performance, joblessness will persist
at high rates long into 1976, especially among guest workers. This condition will
cause a continuing decline in the ;umber of guest workers in the North during
the whole of 1975. West Gcrmany, for example, expects its guest worker population
to decline by another 180.000, or 8%, by yearend 1975 from the yearend 1974
level of 2,180,000. The decline in the guest worker population should gradually
moderate in 1976. Northern governments almost certainly will retain administrative
measures aimed at discouraging new inflows of southern labor, at least until late
in the year.
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39. Over the longer term, the demand for foreign labor should expand as
the North European economics recover. Even under the assumption that future
economic growth rates will be below the trend of the postwar period, a doubling
of Western Europe's foreign work force by 1990 still appears feasible given present
demographic and labor force trends in the North. For example, West Germany's
domestic labor force and population have been declining for several years. But
the Federal Labor Office estimates that 1.4 million more jobs will be available
in 1990 than existed in 1972. Domestic work forces are also declining or stagnating
in other major labor-importing countries, suggesting a future tightening of labor
markets and an increasing demand for supplementary foreign labor.
40. Guest workers by and large have not been a major political or social
problem for the North in periods of economic expansion. This basically positive
host-guest relationship will not necessarily continue indefinitely. Short-term
annoyances may become long-term grievances. Guest workers, after all, are an island
of alien culture in the northern body politic. The longer they are needed in large
numbers to sustain economic growth, the more government and trade union officials
in the northern countries will have to face up to the social and political problems
resulting from their presence.
41. Trade union leaders will have to deal with the prospect that the guest
workers no doubt will increase their demands for vocational assistance and greater
job protection. Resentment among the guest workers toward the trade union
leaderships for their indifference during the current recession is unlikely to
disappear. It may increase if guest workers remain underrepresented in the higher
elective positions inside the unions. As the number of indigenous workers levels
off or declines, the growing economic importance of the guest workers may increase
their political leverage, adding weight to demands for more tangible assistance in
future economic slowdowns.
42. The host governments, for their part, will have to consider seriously the
implications of allowing a sizable segment of their labor forces and resident
populations to remain indefinitely disenfranchised and unassimilated. Although
there are few signs that this lumpen proletariat has become politicized in a radical
direction, the possibility cannot be excluded in the long run. Stated broadly, the
question is how to raise the subproletariat out of its low estate. Except for Sweden,
we doubt that the host governments can be induced in the near future to extend
the vote to the guest workers or make it easier to obtain citizenship. Antiforeign
movements and conservative parties in some northern countries will always he
irritants in the situation. Open hostility from these quarters is likely to strengthen
the guest workers' political consciousness.
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Prospects in the South
43. While the problem:, connects d with the guest workers in the North appear
manageable, the economic difficulties in the labor-supplying countries are more
serious, at least in the short run. The return of migrant workers and the
accompanying drop in workers' remittances come at a particularly difficult time
for the countries of Southern Europe. Crippling oil bills, domestic political
uncertainties, and widespread recession combined to prevent normal economic
growth and to raise unemployment throughout the region last year. The economic
outlook for the next year is bleak -- a continuation of unemployment, inflation,
dwindling foreign reserves, and lacklustre investment. None of the countries except
Turkey is likely to expand gross national product by more than 3%; Italy faces
a small decline in output.
44. The reduction in remitted e.rnings is particularly serious, aggravating the
already difficult balance-of-payments problem of the southern countries and limiting
growth in disposable incomes. All major labor-supplying countries will experience
a decline in remittances in 1975. Tarkish officials, for example, estimate that
remitted earnings could drop as much as 30% this year. While the decline in
remittances should level off in 1976, they will hardly regain 1973 levels for several
years.
45. The return of workers from abroad, combined with a reduction in the
amount of surplus labor normally siphoned off through migration, will also
accelerate the rise of unemployment. In 1975 the total increase in the number
of available workers attributable to the falling demand for foreign labor in Western
Europe is expected to range from 1'7c to 2% of the labor force in Turkey, Italy,
and Spain, and from 3% to 5',"0 in Yugoslavia, Greece, and Portugal. Average jobless
rates are expected to range from 4% to 15%.
46. Despite these problems, most governments in the labor-supplying
countries have not taken maior steps to deal specifically with the returning guest
workers. These workers have not as yc t returned in large enough numbers to create
an overriding sense of urgency or art immediate political threat. As long as the
returning workers shun political activism as they have in the past, most governments
in Southern Europe will probably not feel compelled to take steps beyond existing
relief programs. Furthermore, the mild economic upturn expected in the North --
and the ultimate reduction of unemployment, perhaps late in 1976 -- may reduce
the sense of urgency; the governmerts feel that foreign labor will begin to be
in demand again and that worker remmittances eventually will resume their upward
trend.
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47. Prolongation of the recession in the North, on the other hand, would
force the southern governments to address the guest worker problem more directly
than they have so far. Unemployed migrant workers and jobless youth, who in
normal times might travel north for work, have undoubtedly joined the ranks of
the discontented and would be increasingly inclined toward political protest. Even
in this case, however, serious social or political unrest among former or potential
guest workers would be only one facet of a general disruption in the South. The
interdependence of the northern and southern economies means that a prolonged
recession in the North would ultimately have a severe impact on the South quite
apart from the guest worker question.
48. ][n the long run, the process of industrialization in these Mediterranean
countries will be a crucial factor in determining what happens to guest workers.
The rate of population increase in the southern countries is much higher than
in the North, suggesting that an excess supply of labor will be available for many
years. The South can absorb this excess only by expanding its industrial plant.
Capital investment from the North has and can continue to assist this process.
Northern governments that encourage such investment will be signaling a genuine
commitment to deal with the problem of surplus labor at its roots and to reduce
the pressures to employ these people beyond the capacity of the northern
economies. West German and Yugoslav officials have discussed ways to recycle
funds earned by guest workers back to Yugoslavia to finance the construction of
industrial projects designed and built by German firms. These kinds of joint
enterprises, coupled with private investment from the North, may be the best means
for absorbing Southern Europe's surplus labor and for relieving the social and
political pressures connected with the presence of guest workers in the North.
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