Economic Aspects of Language Inequality

Economic Aspects of Language Inequality (pdf)


By Aron Lukàcs

The activities of the Member States and the European Union are to be “conducted in accordance with the principle of an open market economy with free competition” (Article 4 of the Treaty Establishing the European Community, Consolidated Version). This paper investigates how this fundamental principle of the European Union is implemented in practice in the field of language use.

The conclusion of this paper is that the present situation of the use of languages in the European Union seriously distorts the market and greatly hinders free competition. In the short run it gives advantages to the citizens and companies of some countries, but puts at a disadvantage the citizens and companies in most Member States in the EU. In the long run it is an obstacle also to more efficient economie development of the EU as a whole.

The learning of languages in the EU costs about EUR 60 billion each year. This does not include the cost of travel and stay in other countries for the purpose of language learning. Only for people going to the UK this sum equals to about EUR 13 billion yearly. However if we consider also how much time is spent by the learning of languages and monetize this time (on the basis of the average labour cost in the EU), we come to the amount of about EUR 21O billion yearly.

The cost of translation and interpretation are much less, but not negligible: about EUR 6 billion yearly. However there are much more important factors, too, but these are quite difficult to quantify.  These include  factors like the loss of information due to language problems and the disadvantages to certain participants in international economie and other cooperation. According to a rough estimation the cost of these factors might amount to at least EUR 70 billion in the EU yearly.

In this way we arrive at a tota! sum of around 350 billion EUR yearly, which equals to more than 3% of the European Union’s GDP (in 2005 figures).

Nevertheless, the biggest problem is probably not in the amount, but in the distribution of this sum. It is mainly the UK which reaps the benefits of this situation, and most of the other countries are losing money. According to the estimations in this paper the citizens of other Member States of the EU are paying about EUR 900 per capita yearly to the UK in this hidden way. As this process has been going on already for many years, the sum is accumulating. Supposing a period of 20 years and an interest rate of 10%, this would amount to about EUR 55,000 per person.

Executive Summary 

I. Costs of learning languages
l. Direct costs of learning languages
2. Opportunity costs oflearning languages
II. Costs of lost information due to language difficulties
m. Additional costs of the society and economy
IV. Disadvantages of those who do not speak
the language of the specific communication as their first language
V. Competitive edge of the United Kingdom in the European Union in consequence of the linguistic inequality
1. Direet costs oflearning languages
2. Opportunity costs oflearning languages
3. Costs resulting from other factors
4. Summary
VI. Suggestion for the problem’s mitigation

Aron Lukàcs, Consultanti Dr. Gergely Kovàcs College far Modem Business Studies Tatabànya, Hungary Aprii 2007

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