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2004-08-16

More on paying for residence 

Earlier I vented this seemingly crazy idea of a residence fee that intra-EU migrants would have to pay for some period when they move to a new location within the EU. The purpose would be to enable populations to express a social choice on how much immigration (with the associated economic efficiency) they want. Of course I don't really like the aspect of financially penalising poor migrants. Yet, I've returned to this idea for the reason that originally motivated it: The EU as it is now, and even more so with future rounds of enlargement that bring in less-developed economies, is a political programme to the economic benefit of the richer, better educated segments of society, whereas its overall effects on people with a weak standing in the labor market are less clear. To put it bluntly, there are segments of the Austrian work-force that would not benefit from increased competition and immigration of cheap labor. Is one not called, in thinking about politics, to have the benefit of the most disadvantaged members of society in mind first and foremost? Is it alright to neglect the local poor in favor of the European or global poorer (and the local rich)?

If we want to support internationalisation of political perspectives, as represented concretely by the EU in the case of Austria, we must develop political concepts that don't ignore the local poor and their economic interests. It is not enough to say that everybody will benefit from the lower prices and stronger labor market of a more competitive economy if we don't give people who have fears -- sometimes justified ones -- the opportunity to influence how much of these benefits they want to seek.

Here is a refined version of the original idea:

  1. Every region in the EU (smaller than a country, in Austria each Bundesland) determines the level of a flat fee that must be paid monthly by EU-citizens holding a job in that region, for the first 15 years of residence in the region. People without a job are exempt from the fee. The fee is deducted from salaries by employers.
  2. Proceeds from this fee must be transferred by the regions to an EU fund that disburses the money for structural development in the least developed regions of the EU.
  3. The level of the fee should be set as transparently as possible, e.g. subject to regional popular referendums that can be put up for revision upon popular petition.
  4. Restrictive 'transition rules' at enlargement that forbid employment in existing EU countries (like the seven-year rules imposed at the recent enlargement round) are disallowed as the new system is introduced.
Reason for 1.: Less developed regions that compete for immigration will drive the level of the fee lower. Free movement of people is preserved by linking the fee to employment (this also avoids incentives to leave families behind). The fee should be flat so that it slows down immigration at low salaries, while it will be insignificant at higher salaries.

Reason for 2.: Voters will be aware that a high level of the fee takes money out of their regional economy. Depopulation of marginal regions is countered with subsidies for development.

Reason for 3.: The incentive/disincentive structure for immigration should stop being a taboo decided upon by elite politicians (influenced by xenophobic demagogues). It becomes a simple social choice.

Reason for 4.: Everybody who is ambitious and determined enough can still migrate freely within the EU. No first- and second-class EU memberships.

The system would apply within the EU (think of an EU with 30-35 members), whereas citizens of non-EU countries would still need to apply for residence/work-permits.


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