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This won’t be cool forever

This won't be cool forever

Wait, go on – one would say, looking at the Polish labor market, especially from an employee’s perspective. There is no shortage of jobs, in many areas there is a shortage of labor, which means you can still count on a wage increase. In July, in companies employing more than nine people, it was 15.8 percent. higher than in the previous year, which again means that wages are rising in real terms, i.e. faster than inflation.

July’s data on wages and employment turned out to be better than economists had expected, who had predicted that labor market data would indeed show signs of an economic slowdown. Meanwhile, wages and the number of jobs in the business sector increased (by 2.3% year-on-year).

A total of 16 million 785,000 people were employed in Poland at the end of the second quarter of 2022 – according to the latest data published by Eurostat. Such a level was not recorded in the history of the Third Polish Republic. The European Statistics Office’s compilation shows that the number of employed people has increased by 382,000 compared to the period before the pandemic. people, and last year employment increased by 202 thousand. PKO BP analysts say the increase relates primarily to administration, defense, health and education, as well as scientific and technical activities.

Andrzej Kubisiak of the Polish Economic Institute calculated that compared to the pre-period, we gained 2.7 percent. of employees, while in the European Union as a whole the increase was 1.4%, in Germany there was 0.4%, and in Spain there was a decrease of 0.6%.

Experts emphasize that the record is partly due to visitors from Ukraine, but they also note that many immigrants work illegally, which in fact means a better result.

According to the estimates of the Ministry of Family and Social Policy The registered unemployment rate at the end of July 2022 was 4.9 percent., the same as in June and by 1 percentage point. Less than a year ago. According to preliminary data, 811.5 thousand jobs were registered in labor offices at the end of July. People looking for work, i.e. by 6.5 thousand. Less than a month ago. This is the lowest number of unemployed people on record since 1990.

The data on the unemployed provided by Eurostat is even more impressive. They differ from the Polish ones, because the European office uses a different methodology, taking into account surveys of professional activity to a greater extent than official records. According to these statistics, in June – because the latest data is available this month – Poland has the second lowest unemployment rate in Europe at 2.7%. The Czech Republic came in first with an unemployment rate of 2.4%. to compare The unemployment rate across the European Union has reached 6%.

We owe it to the low unemployment rate to an economy that has been going fast for years. Faster economic growth than other European countries has created new jobs – suffice it to say that according to the data of the Social Insurance Fund, employment rose from 8.06 million people in 2010 to 9.25 million people at the end of the first quarter of 2022.

Most importantly, it was possible to maintain a high level of employment and a low unemployment rate also during the pandemic crisis. Despite the periodic shutdown of some industries, there was no widespread reduction, of course from a macro perspective, because from a micro perspective, the epidemic turned out to be a fatal blow to many companies. This is due to the cascading shields to combat the crisis. The injection of tens of billions of zlotys into the economy was aimed at protecting jobs, and in most anti-crisis tools, receiving support was conditional on maintaining employment.

However, there is also a sad reason for the low unemployment – demographics. Polish society is aging and the ratios between the number of people who enter the labor market and those who leave it unfavorably change. In other words, Manpower shortage may be a bigger problemFrom the masses of the unemployed. In the last quarters of the pre-pandemic period, various studies and surveys showed that entrepreneurs cited a lack of labor resources as one of the main concerns about the future of their business.

Workers from abroad, mostly from the east, filled the gaps in the labor market. In February, Russia invaded Ukraine and a large part of Ukrainians, mostly men, returned to the country to defend their homeland, and on the other hand, millions of refugees – mostly women and children – came to Poland. In general, the number of foreign workers increased – at the end of June 2022, the number of legally employed foreigners registered in the ZUS exceeded 1.012 million people, by 193 thousand. More than in the same period in 2021. By up to 72 percent. Of this number were citizens of Ukraine.

On the other hand, the structure of workers has changed, which has led to sectoral imbalances in the labor market. In industries like transportation and construction, employers are starting to shiver again about hiring in their companies, and in industries like, say, a new workforce has emerged.

It suffices to mention this to realize the extent of the industry’s problems After the outbreak of the war, approximately 400,000 people left Poland in a short time. UkrainiansWho were engaged primarily in the field of logistics, including more than 40 thousand. truck drivers. Some Polish carriers have lost nearly half of their drivers.

Experts of the Northern Chamber of Commerce say frankly: there has never been such a dramatic situation in the transport sector. Based on various estimates from the labor market, they state that the current shortage in this industry is at least 150,000 jobs. employees. Since transportation is the bloodstream of the economy (recent serious disruptions on a global scale were caused by supply chain disruptions, i.e. problems – for various reasons – with the transportation of raw materials, semi-finished products and finished goods), there is a risk of staff shortages, unless they are replaced sooner Or later, they will begin to negatively affect the economy on a large scale.

Not having enough hands to work in some industries is just one of the problems. It’s more serious high inflation and coming economic slowdownwhich heralded a sharp slowdown in the year-on-year growth rate and a decline in GDP in the second quarter compared to the first three months of 2022.

According to many experts, discouragement will lead to increased unemployment (which does not necessarily alleviate employee shortages in individual industries). Of course, no one expects the double-digit unemployment rate, remembered by some of the early years of the Polish transition, but there is no doubt that finding a good job will be more difficult than before. In recent years, there has been a lot of talk – a bit exaggerated – about the employee market. Now that term should be shelved for a few years.

The most serious threat to the economy is the uncertainty related to inflation and the war in Ukraine and some other factors. This atmosphere pushes the resignation or postponement of new investments – which is already evident in the structure of corporate loans granted by banks – less and less investment loans, and an increase in interest in increasing the working capital loan. It is clear that companies are not focused on development, but on to withstand difficult times and secure current operations. Therefore, it may be possible to maintain existing jobs, but new investments will not generate new jobs.

High inflation may push some companies to limit their activities – For example, the real estate development sector is slowing down, as an increase in financing costs and a decrease in the creditworthiness of potential customers is severely freezing demand for new buildings. An increase in energy prices could have a significant impact on household disposable income in the coming months, which in the case of many industries could mean a collapse in demand – and another consequence – a drop in employment.

It should also be remembered that Poland is not an isolated island and that our labor market is – although not directly – influenced by the economic situation in other countries. Problems may come from our most important trading partner – Germany. The country, which has become heavily dependent on Russian raw materials in recent years, fears a recession – when there is a shortage of Russian gas, the rapid replacement of which may be a problem, many companies may stop their operations, including those that receive intermediaries from the industry polish.

Finally, there is the greatest unknown – the war in Ukraine. Six months after its outbreak, any scenario is still possible – from the fall of Ukraine, to the withdrawal of Russia, to a devastating long-term conflict. Each of the options will have consequences for the Polish labor market – we can consider a much larger wave of refugees, but also the return of Ukrainians to their country, when it begins to rebuild after the end of the war, which could mean a labor shortage in Poland.

According to a recent study by the Polish National Bank, two thirds of refugees from Ukraine want to stay with us temporarily (less than a year). There are 16 percent of people determined to permanently reside, and another 20 percent. She is considering staying in Poland for a longer period, but she is not planning to stay here permanently. These proportions may, of course, change as the conflict develops beyond our eastern borders, but one can imagine the scenario that ending the war would mean a mass return.

Thus, the immediate future of the Polish labor market – as in the case of the entire economy – is volatility, uncertainty and imbalance. Instead, one must get used to it, because this is simply the new reality we have been living in for several years – economically, politically and socially. A catastrophe is highly unlikely, but nothing will remain the same – in the job market either. It will just be different

Piotr BuczykEditor at “DGP” since 2009

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