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14 February, 2018  ▪  Maksym Vikhrov

The pursuit of happiness

Why migration from Ukraine rises and won’t stop any time soon

The third generation of state officials is promising that Ukrainians will no longer need to go abroad in search of a better life. Nevertheless, emigration from Ukraine is steadily gaining momentum.

Migration is not just a Ukrainian problem, but a global trend. The numbers of migrants on the planet are growing: according to the UN, they were 174 million in 2000, 232 million in 2013, and 244 million in 2015. The development of transportation and communication means, the increased openness of borders and other globalization phenomena that make travel a not-so-risky adventure and life abroad less uncomfortable, are the factors contributing to migration. Today, migrants have far more opportunities to preserve their identity and keep family connections than they had a few centuries ago. The driving forces of migration remain the same: people leave their homes in search of bread, butter, and security. This determines the direction: global migration flows are directed towards peaceful nations with developed economies, that is, the G20 countries. They host almost two thirds of all migrants of the world. According to the International Organization for Migration, in 2013, Ukrainians ranked fifth among the newcomers to the G20 countries, after Mexicans, Hindus, Chinese, and Bangladeshis.

According to the State Employment Service, with a reference to the data of the Ministry of Foreign Affairs, about 5 million Ukrainians live and work abroad today. However, the actual scale of migration may be larger: according to a survey conducted by Rating sociological group, two-thirds of Ukrainians are working abroad illegally. About 3 million of them are in Russia. This is due to the visa-free regime, the lack of a language barrier, and its economic domination. However, in the recent years, due to the war and European integration, Ukrainians have been increasingly opting for the European Union. According to Eurostat, in 2013, 236,000 Ukrainians obtained residence permits in the EU countries for the first time, in 2015 this number was 493,000, and in 2016, 589,000, that is, about 18% of the total number of permits issued. For reference, Syrians were only issued 348,000 permits in 2016. Obviously, the realignment of Ukrainian migrants towards the EU will continue. This will apply to both migrant workers and those leaving for permanent residence.

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The main factor driving Ukrainians to travel abroad (both for earnings and for permanent residence) is the difference in wages. While an average salary in Ukraine is about €250, in Russia it is €500, and in the EU this year it exceeded €1,500. Specifically, it was €750 in Poland, €870 in the Czech Republic, €1,760 in Italy, €2,300 in Germany, and €2,500 in Ireland. It is clear that the promise of Ukraine’s government to increase wages to UAH 10,000, that is, to about €300, will not stop Ukrainians, same as high wages in European countries do not stop the Europeans themselves. According to the European Commission, in 2015, 11.3 million EU residents of the working age lived and worked outside of their home countries (EU members). Most of them went to Germany and the UK, as well as to Spain, Italy, France, and Switzerland. Migration also takes place within the borders of individual countries. For example, Germans move from the eastern regions to the more developed west, while Italians prefer the richer north to the central and southern regions.

The main source of internal European migration is the countries that joined the European Union after 2004. This, for example, applies to Poland, where EU membership resulted in a surge of emigration. The focus for the Polish seekers of happiness is the United Kingdom, which immediately opened its doors to migrant workers from the new EU members. The number of Poles living there has increased from 94,000 in 2004 to 500,000 in 2008, and is now approaching 1 million (911,000 in 2016). Another priority destination is Germany, which has been welcoming Polish migrants since 2011, after the expiry of the moratorium on employing labor force from the newly acceded EU countries. According to the Federal Statistical Office of Germany (Destatis), there were 420,000 Poles living in Germany in 2013, 670,000 in 2014 and already 780,000 in 2016. They have the same motivation as Ukrainian migrant workers: economically developed countries pay better for work, while getting there is becoming increasingly easier.

Poland is offsetting the significant outflow of its own able-bodied population thanks to the migrant workers, first of all, Ukrainians, who constitute the lion's share of all its migrant workers. Migration promotion resulted in the liberalization of legislation. For example, out of all EU countries, only in Poland can Ukrainians get seasonal work having just a biometric passport. Working visas are also easily issued to Ukrainians: in 2016, about 1 million visas were issued, and the same goes for in 2017. Warsaw refers to Ukrainian migrants as refugees in order to keep away the real refugees from Syria. However, even in spite of political aspects, labor migration has a positive impact on the economies of host countries. According to the reports of the Organization for Economic Cooperation and Development, labor force in Europe has grown by 70% over the past 10 years, and in the United States by 47%, all thanks to migrants. They fill in the niches in the dynamic sectors of the economy, as well as in its stagnating industries, ensuring its flexibility. In addition, contrary to the stereotypes, most migrants are highly competitive workers. In this sense, Ukrainians are a rather valuable resource for Europe, given our cultural similarity, as well as a relatively high educational level and industrial labor background.

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However, developed countries are forced to open their doors to migrants in view of the uncompromising demographic trends that encourage the "elderly and prosperous" to the economic and demographic alliance with the "young and poor." The global trend is that the population of economically developed countries is aging, whereas, on the contrary, young people in the developing countries have no chances in the domestic labor market. Therefore, hosting migrants is a kind of a historical compromise, which provides some with better earnings, and others with scarce human resources. The European statistics clearly demonstrate the urgency of the problem. According to Eurostat, in 2016, the share of children under 14 in the EU population was less than 16%, while the share of persons aged over 65 was more than 19%. For example, in Germany this ratio was 13% to 21%, resulting in the average age of Germans of almost 46. If the trend continues, according to demographers, by 2050, 37% of Europeans will be aged 60+, and the average age will be still closer to 50. This will mean a decrease not only in the absolute numbers of the population, but also in its able-bodied and fertile strata. In other words, nations now have to compete not only for markets and natural resources, but also for demographics.

In this struggle, Ukraine is doomed to fail, since it will be unable, either now or in the near future, to provide its citizens with competitive income levels. Meanwhile, further European integration will facilitate the access of Ukrainians to foreign labor markets, where they will get a much higher remuneration. It is true, however, that the lion's share of labor migrants' incomes is still spent in their homeland. According to the NBU, in 1996 the amount of money transfers to Ukraine amounted to $350 million, in 2010 it exceeded $3 billion, and in 2015 it was close to $6 billion. The figure for 2016 is estimated by experts at $7 billion. In general, according to the estimates of the All-Ukrainian Association of International Employment Companies, in 2011–2016, migrant workers transferred over $50 billion to Ukraine. For reference, in 2016, the Ministry of Regional Development of Ukraine estimated the cost of restoring the Donbas region at $15 billion.

Money transfers of migrant workers not only replenish their family budgets, but also have a positive impact on the situation in Ukraine: at the very least, they allow for curbing poverty and related social and humanitarian problems. Besides, part of the funds are spent on opening own businesses, invested in children's education, etc.

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However, unfortunately, this does not compensate for the demographic losses. The problem is that Ukraine falls into the category of the "young and poor" countries only based on the poverty criterion, while its demographic trends are quite in line with the European ones. While India, Bangladesh, Mexico and China, whose populations are also actively migrating to G20 countries, have a population increase of 1.1–1.6%, in Ukraine this indicator has long been in the red. While the average age of a Ukrainian is not much higher than that of a Chinese (40 vs 37), Indians, Bangladeshis and Mexicans are on average 13–15 years younger than our compatriots. This means that, due to the low birth rates, Ukraine will not be able to compensate for the loss of its able-bodied population leaving the country. This will result in problems: already today, according to the State Statistics Service, only 17.8 million out of 42 million Ukrainians are economically active. Of course, the official statistics "cannot see" those employed in the shadow sector, but even the age composition of the population gives food for thought. As of 2016, there were about 29 million Ukrainians aged 15–64. This means that labor migrants today make up for about 17% of the working-age population.

If the number of migrant workers continues to grow, and the population of Ukraine to shrink and age, in the near future the country will have to compensate for the demographic and labor losses, as Poland, for example, is doing. The problem is, however, that Ukraine is not an economically developed country, and, therefore, is not attractive to foreign migrants. Ukraine is just a large migration corridor for getting into the EU. However, migrants do not want to stay here. According to the State Migration Service, in 2001–2015, the number of residence permits issued to foreigners in Ukraine ranged from 101,000 to 264,000. Compared to the scale of the outward migration, this figure is negligible. What does this mean? According to demographers forecasts, by 2030 the population of Ukraine will shrink to 41 million, by 2050, to 35 million, and by the end of the century, there will be only 27 million Ukrainians. Due to emigration, depopulation rates could accelerate, with even harsher economic consequences. 

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