Researcher: ”Lowering the minimum wage creates a new underclass”

“I have been a migrant in Sweden for 26 years. Problems and differences are being discussed all of the time. This seems to be more important than creating a culture of “Let’s build this country”. There is a fear — always this fear — of migrants taking our jobs and being a threat to our culture. What are we afraid of, and how do we get rid of this fear?”

It is 10 November and the Nordic Region In Focus is staging the conference ‘The refugee crisis and Nordic solidarity’ at the Kulturhuset in central Stockholm. The man who poses the question is in the audience and challenges the panel who have spent the past one and a half hours debating what role the Nordic cooperation can play in the face of the stream of refugees who in later weeks have been flowing north and mostly to Sweden.

“We have to tell the stories about the importance of immigrants,” answers Berit Berg, a Professor in Social Work at the Norwegian University of Science and Technology, NTNU, in Trondheim, and the conference’s moderator. 

Vietnamese education winners

She has been working with refugees since the late 1970s, when she helped Vietnamese boat refugees arriving in Norway. The experience is now one of those good examples. Many of the Vietnamese who came had no education, but got unskilled work which was more common back then. Now, 35 years later, we see that their children are education winners. On average they scored far higher than any other group at school, and can now be found in universities, hospitals, government departments and in other prestigious jobs. This is an example of something migration researchers have been shouting about at the top of their lungs for years — the fact that it pays, according to Berit Berg. 

At the same time she wants to highlight that you must never forget that accepting refugees is about humanism and solidarity.

The Vietnamese boat refugees’ children are education winners and a goldmine for Norwegian society. Those arriving in our countries are human beings, and they are human beings who also are labour,” says Berit Berg.

The well-visited seminar concluded that it is exactly these good examples of integration which could be shared between the Nordic countries.

“Work is the be all and end all for integration. It is a source of normality, economic independence and social networks. It is very important,” said Berit Berg.

It is important to hit the ground running, and this also has a positive effect on society. How to accelerate the integration process was another theme during the conference.

No integration represents a ticking bomb

Lars Dencik, a Professor of Social Psychology who works in both Denmark and Sweden, was another panel member. He is himself a child of refugees and highlights the importance of accepting refugees and giving them a chance to integrate.

“This is not about numbers but about how you receive those who do arrive. The worst thing you can do is accept large groups of people and then not integrate them. You create a ticking bomb,” says Lars Dencik and underlines politicians’ responsibility of not playing to people’s fears or to weaken refugees’ conditions, which in the long term with make integration more difficult.

One measure often touted by employers for easing the entry into the labour market is so-called entry wages. This was also up for debate during the conference. 

Juhana Vartiainen, a member of the Finnish parliament representing the National Coalition Party and a member of the Nordic Council of Ministers, believes it is necessary to consider minimum wages with a critical mind, and to be open for the possibility of lowering them in order to help newly arrived people find work.

“This is not about upsetting Nordic labour market politics, but to lower wages a little bit for those waiting to enter the labour market,” answers Juhana Vartiainen when he is criticised for praising wage dumping.

Extremely short-sighted

His statement was countered by Social Democrat MP Carina Ohlsson, who also chairs the parliamentary social insurance committee. She referred to women’s wage development and concluded that low wages rarely remain a short term solution, but stay low for a long period of time. 

“Do we want to create a new group of low earners? I don’t believe in this,” she said.

“Lowering the minimum wage would create a new underclass, a new level of poverty with bad living conditions and marginalisation. You must definitely not lower minimum wages, but rather try to think two thoughts at a time,” says Berit Berg when we speak a few weeks later.

By that she means that during an internship and apprenticeship period it could make sense paying lower wages, but only then. Elsewhere it goes without saying that you have equal pay for equal work.

“If you cut the minimum wage by 20 percent you are disturbing the Nordic basic principle of equal pay for equal work. You run the risk of having other low-salary workers being squeezed out, and that leads to unrest, unease and conflict, says Berit Berg.

Secure jobs good for integration

The Council of Nordic Trade Unions, NFS, also actively opposes the lowering of the minimum wage as a tool for better integration of newly arrived migrants. On the contrary, it argues, safe and secure jobs make integration easier.

“The Nordic model applies to everyone, and lowering wages is not a solution. It might ease the entry into a few sectors, but how do you differentiate between those who have been here for a long time and the newly arrived? And how would you handle conflicts that might arise? We also do not want to see a situation where you need three jobs in order to survive,” says Magnus Gissler, General Secretary at the NFS.

The flow of refugees is a challenge, agrees NFS, and calls for a dialogue between trade unions and employers, governments and the Nordic Council of Ministers. How do we work together to find solutions which make it easier for the newly arrived to settle? The refugee issue and what it means to the Nordic labour market and welfare model is high on the agenda among trade unions. This was clear to see at the unions’ recent visit to Dagfinn Høybråten, Secretary General of the Nordic Council of Ministers, during the Nordic labour ministers’ meeting in Copenhagen.

“The flow of refugees challenges the Nordic labour market and welfare model if you start lowering wages. We must protect the conditions of the labour market and fight dumping in order to secure economic growth in the long term. The fact that the Finnish government now wants to make changes which are in breach of the collective agreement model is a greater threat to the current model than the refugees themselves,” says Magnus Gisele.

Several simultaneous processes 

He wants to see more processes happening simultaneously, which means fixing accommodation and mapping an asylum seeker’s skills at the same time as you check out the residence permit. Another important issue is to make it easier for third country citizens to cross Nordic borders. 

The Nordic countries are also considering what kind of conditions refugees can expect when they arrive. What does it mean for integration whether a residence permit is permanent or temporary? What role does the chance of family reunion play, or the size of the benefits being offered? Berit Berg is very negative to temporary residence permits, introduced by the Swedish government on 24 November, and to tighter restrictions on family reunions. It is very stressful not knowing whether you will be allowed to stay, and this gets worse the longer it takes to find out. There are precedents. When large waves of refugees came from Bosnia in the early 1990s, several Nordic countries introduced temporary residence permits. 

“Return should be voluntary”

“Everybody said ‘we have come to stay’. They were tired of war, exhausted, marked by their difficult journey and what they said was ‘we must be allowed to land, to know that we will be allowed to stay’. Return to the home country should be voluntary,” says Berit Berg.

Much of her research involves looking at what stimulates and what hinders refugees’ entry into the labour market. Obstacles include determining which qualifications foreigners have, language issues and discrimination. When it comes to adapting qualifications and learning the language, much of the responsibility rests with the individual, but with support from society — for instance help with the validation of skills and necessary extra training. People also need help with learning the language, and we know from experience that language is often best learned in proximity with working life. 

“The last piece, discrimination, is society’s responsibility. It must create opportunities for the newly arrived and invite them in. This is not about being kind, it is about finding the best resources — which you can often find among migrants if you consider their backgrounds to be a qualification and not an obstacle,” says Berit Berg.

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