Saturday, July 01, 2006

How unemployed is Poland?

Official figures say it’s just over 16.5 percent. But things are a bit more complicated than a simple statistic.

The figures only record those who are registered unemployed. But since benefits can only be drawn for six months – that leaves the numbers of the unrecorded unemployed much higher than 16 percent.

Or does it?

Unemployment grew rapidly after the changes in 1989. In 1990 around 6 percent were recorded out of work. By 1994 that figure had risen to 16 percent. The rate dipped down again to under 10 percent in 1998, only to rise steadily again thereafter. This year has seen a slight decrease.

Youth unemployment is around a massive forty percent.

One of the most notable features of Poland’s economy is that GDP growth has been around 5 percent for a long time now but the unemployment rate remains stubbornly high – the highest in the EU.

One answer could be that the productivity rate of each worker has gone up significantly. Which is good.

But it also could be that many of the unemployed either do not want jobs that are offered to them or that employers can’t find the right type of staff with the appropriate skills.

Good piece – as always – in Polish Outlook about unemployment this week:

In the city of Slupsk the unemployment rate is approximately 30%. A car repair shop needs to employ eight workers. It offers a monthly pay of 2000 zloty which is much higher than the 800 to 1000 zloty offered to people by many of the large retailers. They have been unable to fulfill the positions for some time. It is reported that they believe that people have registered as unemployed [in the town] but are working illegally and are not interested in taking on another job.

Outlook also says that some employers are wary of employing younger workers as most only stay in the position for half a year and then leave for larger cities or go abroad to London or Dublin and get work there.

Conclusions we can draw, I suppose, are these:

• there are significant skills shortages in certain areas of the economy.
• the labor code is not flexible enough to deliver the right workers to suitable jobs
• the population is not geographically mobile enough to fill jobs in certain areas
• many are long term unemployed and have become unemployable
• many are working in the black economy

Of course, the more people working 'on the black' in an economy the less tax they pay, starving the government further of funds to do something about unemployment. But at least they have some income to pay VAT!

The government made a pledge during last year’s election that solving the unemployment problem would be a priority. This means that they have to maintain high growth and increase the amount of skills in the workforce to meet the changing nature of the economy.

But they also have to grasp the nettle and change the labor code, which, at the moment, discourages employers taking on new staff. It is very hard to sack someone for incompetence, for instance. They also need to make it cheaper for employers to take on new workers.

Unfortunately, changing the labor code and lowering taxes on businesses will be resisted by much of the coalition, who are old style protectionists and what Andrzej Lepper mysteriously calls ‘social liberals’ (/).

And that’s a shame. Unemployment is one of Poland’s biggest problems. If they don’t solve it soon then more and more young people will just pack their bags and head for the UK, Ireland, Spain...even Finland!!!


troutsky said...

Perhaps a system that promotes full employment would be better. (for the world at large)

beatroot said...

I completly agree.

But they have to be real jobs. The communist system 1945-89 gave 'jobs' to everyone (as long as you kept your mouth shut) but they were not real jobs. The trick to economics is to provide high growth with creative people dring it forward.

And now do you do that?

michael farris said...

One problem is that I generally don't believe official statistics about unemployment ... well anywhere.

In countries like the US and UK the tendency is to define unemployment so that as few people as possible are counted (IIRC the UK government is very good at redefining unemployment in order to make it seem like progress is being made).

Poland tends to define unemployment so that as many people as possible are counted as unemployed. Statistics also ignore the rather large underground economy in Poland.
Another problem is cultural, there's a tendency in Poland (as in Germany I believe) for people trained in one field to only look for employment in that field and to resist relocation and retraining. There are good reasons for some of this (housing is still a barrier to quick and easy movement of people) but there's also a mindset that fiercely resists innovation.

There's also the idea that moving from one place in Poland to another place in Poland (with the partial exception of moving to the capital) isn't worthwhile, though moving to another _country_ (even on another continent) is widely perceived as feasible and desirable. As an acquaintance used to say "I'ts very difficult to be Polish."

beatroot said...

Steppx - I don't want to be cold hearted but the problem with your guy in Czestahowa maybe is that he is not prepared to move to Warsaw or somewhere and get a job there.

That's what they do on the UK - if there os no work where you live you move to somewhere there is.

Geographical mobility - as Mike said - is infamously kow here and people are going to have to start helping themselves.

Aaron Fowles said...

beatroot -

I think you have hit the nail on the head when you said that people here are going to have to start helping themselves.

This may just be my experience in Poland, but very few Poles that I have met will be willing to help themselves. I think that some folks aren't willing to move because of things like family pressure, xenophobia, and a sense of tradition that just won't let go.

We've all heard Poles play the blame game, but how many times will they stand up and take responsiblity for themselves? For the all the history of revolution and struggle for independence, what dominates in this country if not complacence, be it ridden with angst?

beatroot said...

complacence, be it ridden with angst?

Maybe. But traditional communities (there are a few in Poland) with traditional attitudes about place, land etc are loathe to give that up and head somewhere else. The Polish population as had a lot of reallocation in the last 100 years.

But there is also the culture left over from commie times where doing something for yourself was seen as distinctly subversive.

So sit back and blame someone else.

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