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THE JOURNAL OF SOCIAL POLICY STUDIES_
ЖУРНАЛ
ИССЛЕДОВАНИЙ СОЦИАЛЬНОЙ
ПОЛИТИКИ • ••
Markku Sippola
LABOUR MIGRATION IN THE CASE OF ESTONIA AND KYRGYZSTAN: DISILLUSIONMENT WITH LACK OF OPPORTUNITY IN THE HOMELAND
This paper examines the both the conditions of Estonian migrant workers within the labour market of Estonia and Finland and the situation of Kyrgyz migrant workers within the Kyrgyz-Russian labour market. There are many parallels between these two cases. Kyrgyzstan is in the process of entering the Eurasian Union, of which Russia is already a member. Similarly, Estonia has entered the European Union (EU), of which Finland is a member state. The difference in average wages between the home and host country is significant in both cases. There is also a certain lack of employee "voice" in the home country workplaces, making "exit" an easier option and undermining "loyalty" to the home country. Moreover, domestic politics in both Estonia and Kyrgyzstan tend to treat labour migrants as pragmatic agents seeking to maximise their own economic gains and downplay the social nature of labour migration. In doing this, governments are only encouraging their citizens to look for work outside of the country. The mechanism by which this occurs varies from country to country; much depends on the specific variations of each home country. The outcome, however, is the same: long-term plans to work abroad or emigrate on a permanent basis due to disillusionment with one's life prospects in the home country.
Keywords: disillusionment, Estonia, homo economicus, Kyrgyzstan, labour market, labour migration
In recent years, there has been a continuous flow of labour moving from Estonia to Finland, and from Kyrgyzstan to Russia. Despite a growing recognition that reductions in pool of skilled labour will create problems for Estonia and Kyrgyzstan, the respective governments of both countries have done little to tackle
Markku Sippola - University Researcher, Department of Social Sciences and Philosophy, University of Jyvaskyla, Finland. E-mail: markku.m.sippola@jyu.fi
© The Journal of Social Policy Studies. Vol. 12. N 4
the problem. It would appear that workers have come to terms with this situation and now choose to work abroad rather than attempt to improve the labour market situation in the home country. This study looks to explain the lack of protest over the increasingly desperate and worsening economic and social situation to the availability of an external outlet, that of emigration. Hirschman's (1970) theoretical framework of "exit, voice and loyalty" adds a new dimension to the study of social and political conditions of labour migration. This model has long been a classic in the study of international migration (Hoffmann 2010). According to the theory, "exit" is caused by a deterioration in the performance and quality of product or service, which leads to the exit of members of organisation which produce the product or provide the service. "Voice" is an expression of dissatisfaction among the customers or members of the organisation, which leads management or authorities to seek ways to cure this discontent. The notion of "loyalty" can be understood as a force that holds "exit" at bay and activates "voice". Consider, for example, a member or consumer with a considerable attachment to an organisation or product who seeks ways to make himself more influential and reduce the prospect of exit (Hir-schman 1970: 4, 77-78).
Although Hirschman talks primarily about firms, their management and customers (Allen, Tuselmann 2009), he extends his survey to nations, state authorities and citizens as well; this becomes particularly evident in his later work (Hirschman 1993). There are also relatively recent studies that have used Hirschman's concepts of exit and voice in connection with labour markets (Ottati 2003; Moses 2005).
This article also draws upon Piore's (1979) classical theses on migration. First of all, Piore asserted that the prestige of certain professions is socially, not economically, constructed: in other words, it is "the accumulation and maintenance of social status, and not income, that induces people to work" (Piore 1979: 33). The second important notion taken from Piore (1979: 50) is that most migrations are there temporary, and that staying represents a change in plans. Therefore, most social conflicts and political problems arising from migration occur in the transition from temporary migration to permanent settlement. Thirdly, since the individual's social identity is located in the place of origin, labour migration tends to be purely instrumental; in this respect, the migrant is a "true economic man, probably a closest thing in real life to the Homo economicus of economic theory" (Piore 1979: 54). These notions, I argue, are in congruence with Hirschman's exit-voice-loyalty theses in the sense that Piore emphasises permanent settlement as a failure in the individual's plans, which, along the lines of Hirschman, is a crisis of loyalty.
If Hirschman's theory can be applied to both firms and countries, there may well be analogies between the behaviour of company employees and citizens. There are two different schools in the study of organisations: a neoclassical "logic of exchange" that views organisations as systems of incentives, and a behavioural "logic of appropriateness" that sees organisations as common cultures held together by strong social norms of motivation, work and professional ethics (Rothstein 1998: 87). The former school, based on neoclassical economics,
argues that the main task for the management is to create an economic structure that allows self-interested "agents" to fulfil their individual goals. The latter school, for its part, finds the central task of management to lie in inspiring individuals to share common goals and cooperate of their own accord. The same distinction in the logic of action, I would argue, applies to the loyalty of citizens to their home country. Ultimately, the question is whether "the logic of exchange" or "the logic of appropriateness" should be emphasised more when considering the motivations for state policy on migration (see March, Olsen 1989).
This paper asserts that, despite rapid economic reforms and the growth of democracy in these countries, workers still seem to lack power, which is, in turn, causing disloyalty the form of labour migration. This migration is mostly intended to be short-term rather than long-term, and the change of plans from temporary migration to permanent settlement signifies a failure in the plans of the migrant (Piore 1979: 50). The existence of "push" factors in the home country, such as deteriorating social conditions, meagre wages and a lack of employee voice, mean that such a "failure" is even more likely to occur. This poses a problem of loyalty among the emigrated towards their home countries. The question to be answered in this article is therefore as follows: Can one expect loyalty among the disempowered and disillusioned?
The article is structured as follows. First, the reasons for case selection and choice of data sources are discussed. Then, the conditions of the Estonian and Kyr-gyz labour markets are outlined. Following these sections, specific labour market conditions are considered with reference to the concepts of "exit" and "voice". This is followed by a section on the role of the state in these questions.
Case selection and data sources
The focus of this article is using cases from the post-Soviet geographical space to test and explore notions of exit, voice and loyalty in connection with labour migration. A common feature between the two countries is the prominence of outmigration, and labour migration in particular, which occurs largely to Finland in the case of Estonia and to Russia in the case of Kyrgyzstan. While Finland is subject to the EU's directives to allow free movement of labour within the union, Russia, for its part, has facilitated administrative procedures for migration (Badalov 2011). Similarly, both Finland and Russia are providing jobs for migrants in secondary sectors, such as low paid jobs in construction and cleaning sectors (ibid).
Migration is drastically shaping both Estonian and Kyrgyz labour markets, since huge numbers of skilled labourers are leaving both countries, making it difficult for firms to maintain their skills base and for countries to retain their human capital. Both countries are examples of rapid economic and democratic reforms in the aftermath of the collapse of the Soviet Union. Entire industries were heavily impacted, such as mining, manufacturing and farming, to meet the standards of western production. In the 1990s, Estonia belonged to the "Baltic Tigers", which were characterised by "shock therapy" market reforms, large levels of inward foreign
direct investment and rising standards of living. Kyrgyzstan, for its part, was among "fast reformers" of Central Asia, setting the pace in democratic reform and market-led development in the region (Pelkmans 2005). In an analytical sense, both Estonian and Kyrgyz governments seem to favour "logic of exchange" rather than "logic of appropriateness" (March, Olsen 1989) in relation to their labour migrants, creating or approving of economic conditions that drive them to behave as self-interested agents who resort to mobility through either commuting to Finland (in case of Estonia) or sending remittances (as in case of Kyrgyzstan).
The main sources of data arise from national and international statistics on trends in employment, unemployment and consumer prices. A review of Estonian and Kyrgyz scholarly literature provides the necessary information for the examination of social trends and the latest developments in these economies. Media surveys have been utilized and opinion polls followed in order to grasp changes in the public mood and people's experiences in times of austerity.
The Estonian labour market
The financial crisis 2007-2009 has had strong impact on the situation in the Estonian labour market. In terms of employment rates, Estonia has returned to pre-crisis levels. However, fluctuations in the employment rate suggest that there is an unbalanced situation in the Estonian labour market when compared to Finland. It can be estimated that, had Estonian workers not had the opportunity to work in Finland while residing in Estonia the unemployment figure of Estonia would have grown to 15.6 per cent instead of 12.5 per cent in 2011. In 2013, there were 57,000 Estonians working in Finland who made pension fund contributions (ETK 2014). Moreover, according to the border interview statistics of Statistics Finland (Tilasto-keskus 2014), there were 30,000 Estonians working in Finland but living in Estonia in 2012. The Estonian economic recovery has been quicker (in 2011, Estonian wages exceeded 2008 levels) than that of Latvia and Lithuania, and the fall of its wages not so drastic (only five per cent in Estonia from 2008 to 2010 as compared to eight per cent in both Latvia and Lithuania). When we compare the Estonian turbulence in wage development with the development in Finland, we notice a stable upward trend in the latter, whereas there has been a sharp decline in salaries in Estonia from 2008 to 2010. This indicates that the living conditions in Estonia have worsened in real terms between those years while conditions have remained stable in Finland. One can also note that consumer prices have grown at a much greater pace in Estonia than in Finland (and in the EU-27 as a whole).
Besides marking out the salary policies in the whole economy, wage cuts and dismissals in the public sector have had a detrimental impact on employee motivation and on the overall quality of public services in the Baltic states (Vaughan-Whitehead 2011: 16). These policies, together with the pressure from private companies to reduce wage costs, effectively created a negative wage trend in Estonia between 2009 and 2010. Protests from trade unions have had little impact on company policies and the
government's decision-making in these years of austerity, which is partially due to the low unionisation rate in Estonia, which stood at only eight per cent in 2010. According to OECD statistics, 2010 appears to be the latest year in which there are officially reported trade union density data concerning this country.
Compared to the other Baltic countries, Estonians appear more optimistic about their lives. Estonians have reported higher life satisfaction than Lithuanians and Latvians throughout the last decades, whereas since the 2007-08 crisis, Latvia has fallen further behind Estonia and Lithuania (Ainsaar 2011: 87). Although the difference can be explained by "political choice" factors (which in the case of Estonia has meant the most radical privatisation and "shock therapy" economic policies associated with successful campaigns to attract FDI after the collapse of the Soviet Union), geographic factors may play a role as well. The prosperous welfare state to the north, Finland, has helped Estonians cope by offering short-term jobs in construction, services and other industries.
The Kyrgyz labour market
Situation in Kyrgyzstan is differs remarkably from Estonia in social and economic terms, but resembles Estonia in many respects as to labour migration. In terms of GDP per capita and purchasing power, Kyrgyzstan is one of the poorest countries in Central Asia and the CIS region (Baumann et al. 2013: 8). In 2011, the per capita GDP in Kyrgyzstan was almost seven times lower than in Russia, on the same level with neighbouring Tajikistan but still much lower than neighbouring Uzbekistan. The minimum wage in Kyrgyzstan in 2011 was KGS 690 (EUR 12), whereas the mean monthly wage was KGS 2,612 (EUR 144); from 2010 to 2011, however, consumer price inflation was at 20 per cent, thus exceeding the rise of wages that was at 17 per cent (ibid: 17).
In 2010, the unemployment rate was 59 per cent; this does not, however, reveal the real employment situation since one half of urban and four-fifths of rural employment is unofficial (ibid: 11). One peculiarity of the Kyrgyz unemployment benefit system is that the eligibility criteria are related to land ownership. If arable land ownership of a single person exceeds 500 square metres, that person is not able to receive benefits. Since a majority of the people are living in rural areas and land ownership is therefore widespread, a large proportion of the Kyrgyz people are denied unemployment benefits. Still, the level of the benefit, ranging between four and 13 euro for a maximum of 12 months, is miserable and wholly inadequate (ibid: 16).
There is a risk of growing social instability in Kyrgyzstan due to the deterioration of education, health care, culture and other services (Schwegler-Rohmeis et al. 2013: 18; ICG 2011). The collapse in these spheres has contributed to increased protests and the overthrow of the government (ICG 2011). High poverty and inequality rates also raise concerns. One out of three persons lived in poverty in Kyrgyzstan in 2008, where over 75 per cent of the poor lived in rural areas (Schwegler-Rohmeis et al. 2013: 18-19). The collapse of the social security system is being
compensated for by the actions of individuals, mainly via emigrants' remittances to their home country. It is estimated that Kyrgyz labour migrants send untaxed remittances to home equating 30 to 50 per cent of the country's GDP (BTI 2012: 14; Schwegler-Rohmeis et al. 2013: 20). However, while this inflow of money is temporarily raising the standards of living of certain households (Schwegler-Rohmeis et al. 2013: 10), it is having a negative impact on the development of human capital in Kyrgyzstan (Kroeger, Anderson 2011).
At around 30 per cent, overall trade union membership in Kyrgyzstan appears to be one of the highest in the post-Soviet countries, although collective bargaining agreements mostly cover the public sector, which leaves the poorly organised private sector in a virtually unregulated and ungoverned situation (Baumann et al. 2013: 16). Besides this, one of the most striking issues in industrial relations is the issue of delayed or unpaid wages, which are due to firms' mismanagement and/or lack of liquidity (ibid). There are regular and major violations of workers' rights in Kyrgyzstan. According to the Chair of the Department for the Defense of Rights of Workers at the Kyrgyz Confederation of Trade Unions, Vyacheslav Breivo, the three most widespread breaches by employers are massive transfers from permanent to temporary work, violations of workers' rights in the governmental sector and illegal employment of undocumented workers or involvement in the grey sectors of the economy (K-News 2014).
Emigration as an "exit" strategy
As a consequence of the opening of the borders in recent years, a massive emigration from the Baltics to Western European countries, and from Kyrgyzstan to Russia and Kazakhstan, has taken place. If we add the number of posted workers to the number of migrant workers, Estonia has sent abroad more employees than Latvia (Hazans, Philips 2011: 8), which may account to around ten per cent of Estonia's workforce (see Tirpak 2007). There are up to one million people counted as emigrants from Kyrgyzstan, although the official figure of those Kyrgyz people working abroad in 2011 was 457,000, of which 416,000 were in the Russian Federation (EABR 2013: 8).
There are "push" and "pull" factors that determine decisions to leave the country. Estonia's 2004 accession to the EU has provided a significant impulse for workers to seek employment possibilities abroad. When Finland abolished all restrictions to the free movement of labour in 2006, opportunities to work abroad widened (The Estonian Economy 2008: 28). Kyrgyzstan is similarly highly dependent on neighbouring Kazakhstan and Russia as a source of labour remittances (Schwegler-Rohmeis et al. 2013: 20). As Asel Murzakulova has been quoted to say, the accession of Kyrgyzstan to the customs union will stimulate the outmigration of an astonishing 50 per cent of the entire population from the country (Shamshiev 2014).
The squeezing of the Estonian worker in the spirit of the austerity policy after the crisis from 2007 to 2009 is affecting migration intentions. The desire to seek
jobs abroad is connected to poor work and salary prospects in Estonia. According to Rein Ahas, the majority of non-skilled Estonian workers in Finland have virtually no other choice (Ahas 2012). This argument is supported by a survey conducted among Estonians in 2010 concluding that 40 per cent of working-age people were afraid of dismissals, and 49 per cent of them were dissatisfied with the promotional and developmental prospects of their work (Kore 2011). This may be interlinked with the high number of the long-term unemployed, which is one of the highest in EU member states. Estonia is worst off with respect to this indicator along with Greece, Ireland, Latvia, Lithuania, Spain and Slovakia, with seven per cent of the active population being unemployed for more than one year (European Commission 2012: 23). The Estonian case demonstrates that relationships of mobility that are vertical, that is, based on a hierarchical relationship at the hands of somebody else, are less attractive for the migrant worker, since migrant work often offers the "last chance" for the individual (Ahas 2012).
As in the case of Estonia, deteriorating conditions leading to labour migration from Kyrgyzstan derive largely from the rapid economic reforms of the 1990's (Pelk-mans 2005). According to the report commissioned by the Euro-Asian Bank of Reconstruction, the main factors for the mobility of people from Kyrgyzstan were low income levels and unemployment in the home country, the demographic crisis in Russia and an increasing demand for labour in Kazakhstan (EABR 2013: 9). The reasons for labour migration from Kyrgyzstan are traced to welfare conditions in the home country, especially in the southern part of Kyrgyzstan. The role of the government in alleviating the social problems becomes evident. Although some of the factors underlying social problems are due to industrial restructuring, urbanisation and the growth of population, the inability of the government to address social problems in the face of unemployment and unequal economic development is of central importance (Lukashova, Makenbaeva 2009: 32-33).
The lack of "voice"
In Estonia, the point of departure for employment relations is the relative strength or weakness of both parties in industrial relations; the representative organs of employees (unions, works councils) and the employers themselves. The civic movements that led to the recovery of Estonian independence in 1991 were heavily linked with an anti-communist political mobilisation (Ruutsoo 2003: 250). More concrete reasons can be offered for the relative weakness of the Baltic labour movement (Crowley 2002: 5; Woolfson, Beck 2004: 227-228). These include the use of individual "exit" strategies rather than collective "voice" tactics.
One can interpret this lack of a collective voice with reference to Soviet legacies that still inform "exit" and "voice" reactions in post-Soviet society. Soviet workers expressed their dissatisfaction in individualistic rather than collective ways; this could be through disputes, procedures and by writing letters of complaint, but more often this manifested itself in alcoholism, slacking off, absenteeism and even leaving
to find a new job (Clarke et al. 1993: 110). Today, such individualistic means of expressing one's voice can still be found in the Baltic states, especially through the use of "exit", visible in a concrete outflow of workers from the Baltic labour market by means of immigration, due to an excessive deterioration in labour conditions.
There have been in recent years two major attacks by the government against trade unions in Kyrgyzstan. In 2012, the government made a decision to terminate the operation of the Workers' Health Foundation (FOT). The foundation, which since the Soviet era has provided workers with trips to holiday resorts, was closed with the announced aim of improving the competitiveness of domestic businesses, as the provision of such trips were considered to be yet another "burdens" on employers (Skolysheva 2012). In fact, the Kyrgyz employers were not extraordinarily pressured by social payments: fees for employers to insurances comprised 17.25 per cent of the employees' salary, while workers had to pay 10 per cent. In comparison, other Commonwealth of Independent States countries respective figures were 22 to 36.2 per cent and one to nine per cent (ibid). In 2014, another assault on the rights of workers came in the form of a draft law refusing workers of "strategic" sectors the right to strike (Korneenko 2014).
One can employ the term of a double failure of voice, as Woolfson (2010) has used in connection with Lithuania, to describe the efforts by the government to discard and discredit "legitimised" channels of social dialogue in shaping national politics. Another aspect of this is the failure to recognise and respond to "discourses of discontent" from below that come in the form of protests and even riots. Such a failure is evident in Kyrgyzstan, where there is a draft law stipulating a strike ban for workers from "strategic" enterprises1. On the other hand, the "failure" can be seen as embedded in the citizens themselves. As director of the Estonian Centre for Applied Research Epp Kallaste puts it, one explanation for the lack of strikes in Estonia lies in people's inability to recognise problems that the management or government could resolve (cit. in Ratt 2010).
The state's role is crucial
Both Estonia and Kyrgyzstan are cases that clearly demonstrate the tendency to treat migrants as autonomous economic thinkers who make rational decisions on the basis of the resources (incomes, skills, etc.) they have at hand. Such an attitude on the part of the government does not even regard the migrants as a form of "human capital"; they are treated rather as flows of people. Although the Kyrgyz government has made efforts to assist Kyrgyz labour migrants abroad, in the form of legal advice and opportunities of vocational training, the state appears to be
1 A company could be considered strategic if it generates two per cent of the country's GDP. The International Trade Union Confederation (ITUC) has voiced its concern over the intended restrictions on the right to strike.
mainly interested in migrant remittances and reactive responses to social discontent (Ormonbekova 2011: 287).
The politics driven by Estonia and Kyrgyzstan might end up with the countries losing some of their citizens. The logic of action is the same, although the mechanism varies a bit between the cases. Finland is attracting Estonian migrants to become industrial citizens in the host country. Attachment to the Finnish social security system is very straightforward for Estonian migrants. For example, in 2013, the amount of social benefits acquired by Estonian families from the Finnish capital administration exceeded the total amount of those paid by the administration of the Estonian capital (Lotila 2013). In the case of Kyrgyzstan, Russia offers a high demand for auxiliary jobs and decent wages, as well as Russia has launched a direct campaign to transform Central Asian migrants into Russian citizens. As such, it has become easier for Kyrgyz migrants to get Russian citizenship for them than to get a work permit in the country (Kalybekova 2014).
To what extent has exit from the labour market provoked a reaction on the part of the state administrations in Estonia and Kyrgyzstan? In Kyrgyzstan, there appears to be a silent consensus from the side of both the government and opposition not to raise the issue of emigration (Murzakulova 2014). While the Kyrgyz politicians have chosen the path of silence, Estonian politicians prefer to downplay the problem. According to the Minister of Social Affairs Hanno Pevkur, there would be no problem if 77,000 Estonians were planning to leave the country in order to find jobs (Raus 2010). In his words, the potential for emigration depends quite directly on economic factors, and the desire for emigration would decrease as soon as the economic situation improved.
The Kyrgyz case evidences that out-migration can temporarily ease employment problems in the home country, but it is not a sustainable solution for labour market problems (Schwegler-Rohmeis et al. 2013: 10). Besides, although Kyrgyz citizens have directly confronted the state by organising protests, the state's inability to provide essential goods and services has deterred their willingness to fulfil responsibilities such as tax-paying, law-obedience and serving in the army (Ruget, Usmanalieva 2007). Asel Murzakulova (2014) has raised similar concerns about the development of civil society in Kyrgyzstan. The fact that 17-29 year-olds constitute almost half of the migrants entails their absence from the political system. This blocks the realization of a new type of democratic sovereign country, which cannot emerge due to the lack of this perhaps most democratically-minded segment of the population.
Conclusion
What lessons can be learned from Hirschman's exit-voice-loyalty theory in light of these cases? According to the theory, the deterioration of a certain product, or for example of "quality of life", is associated with a paradox: "The rapid exit of the highly quality-conscious customers - a situation which paralyses voice by
depriving it of its principal agents - is tied to the availability of better-quality substitutes at higher prices" (Hirschman 1970: 51). If we extend Hirschman's idea of high-quality conscious customers to actors in the labour market, it would appear that those who have the best possibilities for voice are leaving first, and those who remain are unlikely to raise their voices as a result of quality deterioration, even though they suffer greatly. In light of the cases examined here, this means that non-EU citizens in Estonia and poor and elderly people in both Estonia and Kyrgyzstan are those who consent to staying when those "highly quality-conscious customers" able to raise their voices are leaving.
As for the possibility of loyalty, the statement by the Minister of Social Affairs Hanno Pevkur on the Estonian tendency to seek their fortune all over the world, only eventually to return, would seem to be based on the wishful thinking that these people will remain loyal to their mother country. Such thinking is based on a notion of loyalty that contradicts that of Hirschman, who views loyalty as a factor reducing the likelihood of "exit" and increasing the chance that people will raise their "voice" (Hirschman 1970: 77). Consequently, a person can only remain loyal without being influential as long as he or she expects that someone will act or something will happen to improve matters. It is hard, however, to believe that, for example, Kyrgyz migrants would remain loyal to their homeland under circumstances in which it is precisely the state's weakness that has been having such a negative impact on feelings of collective membership, resulting in the increasing growth of sub-national identities (Ruget, Usmanalieva 2007).
Nonetheless, massive out-migration may bring with it seeds of change, at least with regards to such a favourably located country as Estonia. In Hirsch-man's (1993: 176) words, "exit can cause the deteriorating organisation to improve its performance", that is, to improve the services and benefits the members of such organisations receive. This would be in line with Moses's (2005) notion that increased mobility improves the responsiveness of governments to citizens' demands. One might argue, however, that there is a paradigmatic bias in the thinking of the Estonian and Kyrgyz governments towards the logic of exchange (March, Olsen 1989), creating an economic structure that makes migrants "true economic persons" rather than involving mobile citizens in the home-country decision-making. This occurs irrespective of the fact that there are well-established notions of "global nations policies" (Levitt, de la Dehesa 2003) and "migrant transnationalism" (Baubock 2003) of countries with a large number of emigrated people, on how to strengthen the bonds of loyalty among their overseas citizens.
Acknowledgements
This research was funded by the Academy of Finland's Project Grant #265572, Industrial Citizenship and Labour Mobility in the EU: a Migrant Centered Study of Estonia-Finland and Albania-Italy Labour Mobility. Principal Investigator: Nathan Lillie.
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