Labor Market of Poland

Student : Khatuna Buchashvili

Neptune Code :AJ927F

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Contents
1.Introduction to the country
2. Population and reasons for population decrease

3. Equal opportunity and gender pay gap

4. Rates

4.1 Employment rates

4.2Unemployment rate

4.3Inactivity and activity rates

5. Atypical employment

6. Out of work benefits ( types of social aid)

7. Conclusion and possible solutions proposed by the Government of

Poland

References

List of figures

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Introduction

In the following paper I reviewed the labor market of Poland ,its population distribution
,pension system,salaries ,social policy ,employment rates ,inactivity rates out of work benefits .

Poland is a country ,which is situated on the Baltic Sea and it has borders in the east with Belarus
and Ukraine .The area of the country is 312 700 square kilometers and it has a population of
38.5 million . The countrys territory is divided into 16 regions (so called Voivodships), which
differ from each other in many respects, and 380 districts (Powiats).

According to the latest data from European Comission GDP growth in Poland is 3,6 % (2015 )

The Polish economy continues to experience a stable economic expansion. Driven by domestic
demand, real GDP is expected to in 2016 and 2017, well above the EU average. These growth
rates will add to a long period of uninterrupted economic expansion, stretching as far back as
1992 with Poland being the only EU country that weathered the post-2007 global financial
and economic crises without undergoing any recession.

The main part of the country`s workforce is concentrated in the services sector. The Polish
major industries are : machine building, food processing and beverages, iron and steel ,glass
,textiles, coal mining.

Population and reasons for population decrease

The population of Poland represents 0.55 percent of the worlds total population Poland
Population - actual data for 5 years .We can mention from Figure1 one that during these 5 years
the population of Poland was experiencing decrease.

It is interesting to mention that from the predictions of European Commission, between now and
2060, the country`s population will decrease by 5m from 38million people, together with a
meaningful change in the countrys age structure. They have also predicted that many of those
who work now will live long past retirement,compared to younger population,which will have to
support the older generation.

One of the reasons for the Polish demographic challenges can be named vast
emigration. Those who mainly emigrate are the people of productive age 35-45 aged. According
to the article of Zosia Wasik there is a queue of foreigners who woud like to fill the gap. The
number of Ukrainians who want to work in Poland has risen 200 per cent.

Natalia Panchenko (Open Dialog foundation) ,a person helping Ukranians to settle in Poland,
said that no matter which kind of education or professional experience they have , 90 % of the
immigrants when coming to Poland, start in the lowest paid jobs.

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 Figure 1 Population growth rate

Year Population Growth Rate

2010 38 563 086 0.06 %

2011 38 584 450 0.06 %

2012 38 601 852 0.05 %

2013 38 614 092 0.03 %

2014 38 619 336 0.01 %

2015 38 615 884 -0.01 %

Migration from Poland can be noted not only in Ukraine ,but also in the UK
.However,migration experts claim that many Polish migrants have developed while being in UK.
As far as ,in the beginning , many of them were happy to take on work ,that does not require so
much skills,they started to evolve and search for better ,long lasting jobs.

Figure Below represents the division of population in Poland.

By the data that could be found ,Working age Population is 25 million people of which currently
active is 17.5 million,while inactive is 8 million.

Active
17482000
Employed
Working age 16.182.000
25,498,000 Unemployed
1.300.000
Population
38,611,794 Inactive
8,016,000

Figure 2 Population division

Outside working age

Equal opportunity

Discrimination in employment is prohibited

Difference in treatment on the prohibited grounds is permitted in certain circumstances.

Harassment and sexual harassment are prohibited

Employees are protected against victimization

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Gender pay gap

The gender pay gap at median earnings in Poland (10%) belongs to one of the lowest in OECD,
and the pay gap is relatively small. Women are even more likely to have permanent employment
than men and to work in professional occupations. It is remarkable, that the proportion of women
managers in Poland (36%) is one of the highest among OECD countries .However, at 7%, the
proportion of women on boards is below the OECD average (10%), compared with 18% in
France and 38% in Norway

Figure 3 Gender pay gap in OECD

In Poland,above 50 % of the parents have a traditional view of womens role in paid and unpaid
work, The view of Polish is the following ,that women should be prepared to work less for the
care commitment. Mothers are mostly the users of leave entitlements.

It is not only industry, but also form of ownership that contributes to wage dispersion. Average
hourly wages in Poland are approximately 12% higher in the public than in the private sector,
and this gap was increasing with time. Common view is that females are more risk averse and
prefer more stable and protected jobs in public sector. Although women in Poland are far better
educated, this not translated to better wages.

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Rates

In the following paragraph, the unemployment rate,which measures the number of people
actively looking for a job as a percentage of the labor force, and other rates as indicators for
labor market of Poland will be discussed.

Employment rates

FEMALES ALL
MALES PEOPLE
2009-01-01 52.750 66.125 59.375
2010-01-01 52.600 65.325 58.950
2011-01-01 52.700 65.975 59.300
2012-01-01 53.125 66.300 59.675
2013-01-01 53.375 66.600 60.000
2014-01-01 55.175 68.200 61.675
Figure 4 Employment rates by gender

As we can see from the table there is a difference between employment rates between males and
females .

Although we can mention that there was no significant difference (changes in the rates) .Several
barriers prevent a further rise in activity and employment rates. These include the difficulty in
upgrading the skills and competences among people currently absent from the labor market, in
particular because of their very low skill level, transport infrastructure, barriers to geographic
mobility due to housing policies made by the government and insufficient childcare facilities
especially for the youngest children

Figure 5 Difference in employment rates

As we can see from Figure 5 in the world rating Poland with the difference in employment rates
of women and men in 2015 is on the 8th place (so it is a little bit more above average)

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Unemployment Rates

Figure 6 Unemployment rates

At the beginning of the 21st century, the high level of unemployment was one of the social
problems related to the labor market in Poland. In the recent years, however, the increasing fall
of various forms of employer-worker contracts has had an impact on the unemployment rate
equally important.

Unemployment has dropped continuously, but still remains a challenge. The unemployment rate
has been decreasing since 2013 and was back to pre crisis levels, at 7.1 %, in Q3-2015. Long-
term unemployment accounts for around 38 % of total unemployment. The youth unemployment
rate (20.5 % in Q3-2015) has also fallen from the highs reached in 2013. However, jobless rates
remain high for young people with low to medium skills. The rising number of unfilled
vacancies coupled with long average job searching periods among the unemployed suggests
increasing difficulties in matching existing vacancies with the remaining quantity of unemployed
people.

By latest data In March 2016, the unemployment rate in Poland fell to 10 per cent and was 1.5
percentage points lower than in March 2015. Thus it was the lowest unemployment rate in the
recent history of the Polish market economy. The trend is lowering and there are no indications
that it should suddenly stop. The forecast are that the Poland will soon be able to announce that it
has never had such a low unemployment rate since the period of systemic transformation. By EU
methodology, Poland's unemployment rate was at 6.3 percent in April, which is below the EU's
average at 8.7 percent.

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Inactivity and activity rates

Year %
2010 34.7
2011 34.3
2012 33.5
2013 33.0
2014 32.1
2015 31.9
Figure 7 Inactivity rate 2010-2015

As a result, with the years passing less people are inactive , more and more people are trying to
be active and search for work in Poland.

Professional activity in the age group of 15-24 in Poland is about one-quarter lower than the
average in the EU and is practically unchangeable since 2008.

As for activity rate during the years 2010 -2015 there were not any major changes , although for
the latest 3 years it has been stable and was 56.5 %.According to the comments from the figure
we can consider as a remark ,that there is difference between women and ment participation. The
man participation was 64.9 % by the latest data, while the women participation rate is 48.9 %.

Figure 8 Activity rate 2010-2014(as found )

The reason for professional inactivity of young Poles may be the fact that in Poland more people
(especially women) have intention of obtaining a higher education degree than the EU
average. Young women are better educated than young men, but gender gaps in labor market
outcomes persist.

Poland also has a problem with the professional activity of people who are over 50 years of age.
However we can mention that there is a positive trend which should be noted professional
activity in these age groups has been rising and has occurred without an increase in
unemployment.

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 Atypical Employment in Poland

In Poland existing atypical workers do not have any additional protection, but they cannot be
treated worse than other typical employees.
Mainly disabled employees have additional rights as:

Having an appropriate workplace with special facilities;

night-work and overtime work is forbidden;

an additional 15-minute break at work;

additional annual leave (10 days per year); and

additional rehabilitative leave (up to 21 days per year).

Figure 9 reasons for temporary employment

Quite remarkable can be the figure that represents the actual reasons for temporary employment
in Poland. As we can see the most of them are is not education or training, but the fact that less
young people can find permanent job, which is due to low skill level. Personally I consider that
fixed-term contracts may have a negative impact on training and lead to lower human capital
accumulation.

Temporary employment in Poland is negatively affecting the quality of human

capital. The average literacy rate among 16-65 year old people is very low.
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 Out of work benefits (Social AID)

The reviewed country has also social aid ,so called, out of work benefits. For now, the main
groups for being eligible for social assistance are following:

the homeless (assistance in form of providing shelters, meals, clothes)

the unemployed (cash benefits, integration activities)

the disabled and the dependent people (care services, social assistance homes, cash
benefits)

the poor (cash benefits)

the elderly (care services, social assistance homes, cash benefits)

families and children (cash benefits, supplying nutrition for children in schools)

victims of natural and ecological disasters (purpose benefit).

Cash benefits

There are three basic types of cash benefits in the country:

permanent benefit,
periodical benefit
purpose benefit (together with special purpose benefit).

Usually, cash benefits can be granted to persons /families whose income per capita does not
exceed criteria stipulated in the Act on Social Assistance.
Permanent benefit - an obligatory allowance, granted to people incapable of working, due to
her/his age or disability. The amount of this benefit cannot be lower than PLN 300 (69 euro)per
month per person.
Temporary benefit may be granted to persons and families without sufficient income (income
lower than legal income criterion), particularly due to prolonged illness, disability,
unemployment, and possibility to maintain or acquire the rights to benefits on other social
security systems.
The amount of a temporary benefit is a difference between the income criterion and the personal
income.
Assistance to persons covered by international protection.
The Act on Social Assistance also provides for integration assistance to persons covered by
international protection.
Nowadays , it refers to the refugees and foreigners granted the subsidiary protection on the
territory of Poland.
The assistance is provided within an individual integration programme.The assistance can be
provided during a period not exceeding 12 months, and its major components are:

benefits in cash for maintaining and covering expenses connected to learning Polish
language

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 the payment of contributions to the health insurance specified in the provisions on the
general insurance with the National Health Fund;

specialised guidance

In Poland a so called dual labor market can be observed.This means that people with very
similar qualifications work on different contracts.That leads to serious inequalities, frustration
and tensions.

Some people with entitlements must give them up so that those in a less fortunate situation
can get better protection.,- says Mr Rutkowsky World Bank lead Economist.

Conclusion and possible solutions proposed by the

Government of
Poland
To sum up the research paper , it can be said that the Polish economy is on the path of
growing ,but the unemployment rate is being considered pretty high ,even though the
government does its best to lower it.

The very high percentage of temporary employment in Poland compared to other EU

countries can be considered as double sided. On the one side,it helped the country to
safeguard and improve its cost-competitiveness .At the same time, it tends to favour a
specialisation in low-medium-tech, low-skilled-labor intensive products and services ,expressing
the current comparative advantage of the country.

Although, the Polish labor market faces significant challenges. Mainly we can consider the
demographic situation -a declining working age population.

Even though Poland had a successful performance ,a coherent set of policies are needed to
respond to long-term challenges and opportunities. In first place it should manage rapidly aging
societies ,as Poland has the most rapidly aging ones and also leveraging technological change.

For the reason of responding to these challenges, Polands new Government of the Law and
Justice party recently announced the Strategy for Development ,which is aimed at raising
domestic investments, so that there will be less immigrants , the better coordination of
investments from EU funds and improved business conditions,.

Apart from that, Polands new Government intends to focus on the poorer segments of society.
Moreover, it introduces an hourly minimum wage. Meanwhile the additional social spending will
be funded from improved tax compliance and the introduction of so called sector taxes on
financial institutions and large retailers. Greater gender equality is a way of achieving sustaining
labor force boosting economic growth.

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References :
1. The World Bank
( http://www.doingbusiness.org/data/exploreeconomies/poland/labor-market-regulation
http://countrymeters.info/en/Poland)
2. Piotr Bogumil, Securing Polands economic success II: labour market and
product specialisation is there a link? ; April 2015
(http://ec.europa.eu/economy_finance/publications/country_focus/2015/pdf/cf_vol12_iss
ue4_en.pdf)
3. http://www.worldbank.org/en/news/opinion/2015/09/15/jan-rutkowski-in-poland-
without-radical-changes-labor-market-is-not-going-to-improve
4. World Economic Forum
( http://reports.weforum.org/global-gender-gap-report-2015/economies/#economy=POL)
5. Malgorzata Maciejewska,Adam Mrozowicki,April 2016
http://www.celsi.sk/media/research_reports/13_CELSI_RR_1.pdf (figures)
6. World Bank
http://data.worldbank.org/indicator/SL.TLF.CACT.ZS?
end=2014&locations=PL&start=2010
7. OECD
http://www.oecd.org/gender/Closing%20the%20Gender%20Gap%20-%20Poland
%20FINAL.pdf
8. http://www.indexmundi.com/facts/poland/employers#SL.EMP.MPYR.FE.ZS
9. http://www.reuters.com/article/poland-economy-unemployment-idUSL8N18Y2DH
10. https://eures.praca.gov.pl/en/index.php?
option=com_content&view=article&id=82&Itemid=115
11. Zosia Wasik, September 4 , 2015 The Financial Times Limited
( https://www.ft.com/content/3001e356-2fba-11e5-91ac-a5e17d9b4cff)
12. Matthew Day, 22 July 2011,The Telegraph
(http://www.telegraph.co.uk/news/worldnews/europe/poland/8655206/Poland-
population-dropped-by-a-million-since-joining-EU.html)

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