Štěpán Mikula: "Lex Ukraine is a step in the right direction, but it does not offer a long-term solution."

15 Mar 2022 Jana Sosnová

There are currently approximately 200 000 refugees from Ukraine in the Czech Republic. Štěpán Mikula, an economist from the Faculty of Economics and Administration, commented on the form of the law regulating the stay of Ukrainian refugees in the Czech Republic, the so-called "lex Ukraine", and possible changes in the Czech labour market.

What did the Ukrainian minority in the Czech Republic look like before the Russian invasion of Ukraine?

The Ukrainian minority is not only the largest minority of non-EU citizens in the Czech Republic, but also one of the largest Ukrainian minotrities in the EU in general. Before the Russian invasion, only Italy and Poland had more Ukrainians. The demographic structure of the Ukrainian minority has changed dynamically over time. A decade ago, it was dominated by people aged 25-40. Between 2010 and 2020, however, their share fell from 57% to 46%. In contrast, the proportion of children and people of retirement age has increased. Such changes indicate a gradual transformation from a 'diaspora of workers' to a 'diaspora of settlers'.

What is the current position of Ukrainians in the labour market?

Most often they work in less-skilled professions. In some sectors, they absolutely dominate in the population of employees from third countries. In the construction sector, for example, Ukrainians make up over 90% of non-EU employees.

How would you describe the group of refugees who are now coming to the Czech Republic from Ukraine?

We can expect that at the moment it will be mainly women with children and older people. According to data from the Ministry of the Interior, as of 10 March, just under 11% of registered refugees were men aged between 18 and 64. However, the demographic structure and the number of refugees will change dynamically depending on the course of the war. In my opinion, we must also take into account the scenario that there will be a large number of refugees, that they will stay for a long time and that many of them will not return to Ukraine. We should therefore immediately exert all our efforts to support their integration into society and the labour market. Indeed, investment in the integration of refugees is more effective, and consequently cheaper, if it is started immediately after their arrival.

Is it possible to estimate how much this integration will cost?

Even quick and effective integration programmes cost money. A lot of money. For example, using Austrian data, the OECD estimates that the cost of integrating Syrian refugees would amount to 0.7% of GDP per year in the Austrian model, with a refugee population equivalent to 1% of the population. The costs will therefore certainly not be in the millions or hundreds of millions of CZK. Rather, in 2022, we must prepare for costs in the higher tens of billions of crowns at least.

How will the Czech labour market change in connection with the arrival of Ukrainian refugees?

The arrival of large numbers of immigrants always makes people worried about jobs. They are afraid of rising unemployment and falling wages. However, research analysing past waves of migration shows that these fears are not justified at the national level. Experts agree that the aggregate effects of immigration on domestic workers are small or even zero. This does not mean, however, that there are not specific segments of the labour market where wages and employment may actually fall. The most at risk will be workers who can be most easily replaced by incoming refugees - especially people in less-skilled occupations that do not require language skills, or Ukrainians and other foreigners already living in the Czech Republic.

Are there ways to avoid this situation?

Accessible language training, easy recognition of qualifications or retraining can alleviate the pressure on the most vulnerable groups in the labour market by allowing refugees to work in more skilled occupations. Priority should be given to language training, which is more important than employment in the first phase.

What is your opinion on the legal regulation ("lex Ukraine") of the access of Ukrainian refugees to the Czech labour market?

After arriving in the Czech Republic, refugee families need housing, school for their children and work. In my opinion, the provision of these needs must be aimed at the effective integration of refugees. At the same time, however, it is necessary to build on the capacities of state institutions, which cannot be increased by leaps and bounds. The so-called 'lex Ukraine' has taken a step in the right direction in this respect by allowing refugees free access to the labour market. Its regulation would be administratively unmanageable given the expected numbers of arrivals. It would also be counterproductive, as it would necessarily increase the refugees' dependence on various forms of assistance and slow down their integration.

What specific shortcomings do you see in the current draft law and what solutions do you propose?

The problem with the law is that it does not give refugees or their employers a long-term perspective. Indeed, the legal status of refugees remains unresolved after one year. This may reduce their willingness to actively seek integration. At the same time, this lack of legal regulation may reduce employers' incentives to employ refugees and invest in their training. In this respect, the state should clarify the situation as soon as possible and ideally offer refugees the possibility of obtaining permanent residence. Simplified, we can say that refugees come to us because they have lost their future at home. Our aim should be to give them a future again.

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