Tuesday, 28 April 2009

The Czech Republic Pays for Immigrants to Go Home

THE WALL STREET JOURNAL: Unemployed Guest Workers and Their Kids Receive Cash and a One-Way Ticket as the Country Fights Joblessness

Prague -- During its manufacturing boom earlier this decade, the Czech Republic wooed immigrants with plentiful jobs and comparatively higher wages. Now the Czech government is paying them to go back home.

Four years ago, Uyanga Ganbold migrated from Mongolia to Plzen, an industrial hub 60 miles south of Prague, with dreams of a European education for her two children. But she lost her job assembling Panasonic televisions and is taking the government's offer of a one-time payment of €750 ($992), triple her monthly wages. "I've never held that much money in my hands all at once," said the petite 34-year-old before leaving in mid-April.

Trin Van Pham is a harder sell. The Vietnamese immigrant lost his factory job with Czech auto maker Skoda in December, but turned down a similar package to leave. "It's just a little bit of money," compared with the $11,000 debt he took on to get here, says Mr. Pham, 30. Besides, he says, "if I go back, I'll also be looking for a job. It's not easy to get one there."

Their reactions underscore the difficulties of unraveling the global work force this once labor-strapped nation created as it grew into a manufacturing hub. In 2007, foreigners scooped up nearly 40% of the new jobs created in the Czech Republic. In the last five years alone, the number of immigrant workers doubled to nearly 362,000 by the end of 2008.

With demand for exports down, unemployment has soared to a two-year high of 7.7%. Economists say the rate could hit 10% by year's end, and there are signs rising joblessness is pushing some Czechs to apply for the low-wage work they once left to foreign laborers. The Czech economy is set to contract by 2% this year -- a sharp fall from a growth peak around 7% in 2006.

In February, the government, fearing crime, homelessness and immigrants overstaying visas, launched a $3 million program to pay newly jobless migrants to go home. The pitch: €500 per legal immigrant, €250 for children under 15, and the cost of the tickets home. >>> By Joellen Perry | Tuesday, April 28, 2009