Ukrainians are forced to become labor migrants: How to return them?

Author : Oleksandr Okhrimenko

Source : 112 Ukraine

Ukrainian businessmen often complain that it is impossible to find good workers in Ukraine, since many have left for Poland, or are planning to do it soon
09:23, 19 June 2018

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Undeniably, many Ukrainians left for work in Poland, and not only. Moreover, Poland has actually violated the labor legislation of the EU and allows our people to work without labor visas, following the so-called "statement", which allows Ukrainians to work in Poland up to 9 months a year. At the moment, Polish lawmakers want to extend the term "on application" to 12 months a year, which actually means a massive labor migration to Poland. There are data that in 2017, 1,7 million Ukrainian citizens were employed in seasonal work in Poland. And, although they have already returned to Ukraine, they are in no hurry to seek work in Ukraine and go to work in Poland again. There is nothing surprising. The average salary in Ukraine (after paying taxes) is about 300 euros, while in Poland it is about 700 euros. The difference is significant, and it will always encourage Ukrainians to seek work in Poland, not in Ukraine.

Related: Poland starts project on free employment for Ukrainians

What should our businessmen do? There are several ways to solve the problem of labor shortages, and, above all, it is about working profession, because there is no shortage of managers or directors in Ukraine and in Poland.

The first and more effective method that Poland uses is to attract labor from the other countries. Millions of Poles left for work in the US, UK, and Germany, and therefore there is such a great demand for Ukrainian workers. Ukraine needs to do the same, but with respect to the inhabitants of Central Asia, for example, Uzbekistan, Kyrgyzstan, and Tajikistan. To do this, it is necessary to simplify the legislation to make it easier for residents of Central Asia to obtain citizenship and work legally in Ukraine. To some extent, this may even be a blow to the Russian economy. Since the Russian economy currently strongly depends on migrant workers from Central Asia, although there are problems with obtaining Russian citizenship for residents of Central Asia. So here Ukraine could lift Russia’s game. Moreover, many residents of Central Asia speak Russian and would agree to work in Ukraine.

Related: Can Ukraine replace Russia with Poland in foreign trade?

The second way that can solve the problem of a labor shortage is the ban of a simplified taxation system, especially of the second and third groups. Many Ukrainians illegally work in Ukraine, because there is an opportunity to engage in illegal business under the guise of a simplified taxation system. If this privilege is eliminated, or follow the EU model, where only the first group belongs to the simplified tax system taxpayers, then most of the Ukrainians will be forced to find official work or go abroad. But, in any case, everyone will not go abroad, and they will be forced to seek legal work in Ukraine.

The third way is more complicated, although it also deserves attention – I mean raising wages in Ukraine to a level of 500, and preferably 600 euros. In this case, it makes no sense to go to work in Poland, because the cost of living in Poland is higher than in Ukraine. This can be done through production cooperation with Poland, and better with other EU countries. This method can be called "Turkish way." Previously, many people in Turkey went to work in the EU, and now, on the contrary, part of the European Turks returned to Turkey and works in Turkey. Production cooperation involves the creation of a network of factories and workshops where products for European companies will be produced. Such a positive experience already exists in Ukraine, but so far these productions are very little. We need more of them. This requires free economic zones throughout Ukraine, not only in Western regions, as some might suggest. This will encourage European companies to transfer production from Poland to Ukraine. It was such a trick made by Turkey, and now it has a large share of foreign business in the country's GDP.

Related: Poland names conditions for resuming cooperation with Ukraine's Institute of National Memory

And the fourth way is doing nothing. Businesses will continue to complain about the shortage of labor and will raise the salaries of employees with an effort. In turn, this will provoke an increase in the cost of Ukrainian products, which means that Ukrainian prices for Ukrainian goods will grow. As a result, in Ukraine, the salary will be the same as in Poland, but the prices will be as high as in Poland. This cannot be done in a year, but it can be done in 5-7 years. In fact, it took some ten years for Poland to reach its current level of salaries and prices, so Ukraine also has to do it.

Related: Ukraine’s Security Service ‘burned’ Polish bus in Lviv to detain criminals

There are many ways out. In any case, if you just complain that there are no people who want to work for your salary, nothing will happen. And do not forget that in the EU the average profitability of the business is 1-2%, and in Ukraine, it is about 25%. It is clear that if you want to be "like in the EU", then the profitability should be much lower in Ukraine. Times of big profits have passed. Any developed country in the world is famous not only for its high salaries, but also for high prices, high taxes, and low profitability of the business. In developing countries, there is more chaos, but the salary is lower, and the profitability is higher. This is the axiom of the world economy.

Related: 15,000 Ukrainians receive Polish citizenship since 2008

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