Unemployment in Poland

Having a little knowledge about unemployment, especially in the country that we are going to work,  is useful for each of us. Sooner or later, we will have to think about it while looking for a job or changing it. When unemployment is low we have more chances to catch a good job, when not it is success when we catch any.

Unemployment is one of the most important economic and social problem in Poland because  in recent years, the unemployment rate has been steadily rising. During communism the official unemployment level was less than 1%, but some economists estimated that the hidden unemployment in state-ruled companies was about 50%. That mean that typically two people were doing a job which could be done by one person. Because of political and economic transformation (from a centrally planned economic model, to a free market system) after 1989 unemployment start to rising rapidly. In 1990 it was 6.1% and in 2002 already 20% (the highest unemployment rate historically). This unfavourable trend was reversed in 2004. The largest drop in unemployment, however, has been taking place since 2006, when the unemployment rate declined below 15%, reaching 9,5% in 2008 ( the lowest unemployment rate). This was due to the economic upward trend which produced more job offers and more active people. Because of financial crisis, in 2009, the unemployment rate increased to nearly 12% and to 12,8 in 2010.

According to the newest statistics Poland’s registered unemployment rate rose to 13.2 percent in February from 13 percent the previous month. Unfortunately,  is also higher than year ago. Labour Minister Jolanta Fedak thinks that the numbers are not too disturbing, however. She said that „The rise in unemployment is seasonal. It’s difficult to judge now [if the trend will remain]. We need to wait until the spring to find out,” She also predict lower unemployment rate at the end of this year but everything will depend on Poland’s economic growth in 2011. As you can see in the chart seasonal unemployment is characteristic feature in polish unemployment. It is connected with fluctuations of the weather and seasons. For example, in winter there is a high unemployment especially in tourist industry, building industry or agriculture.

Unemployment in Poland is characterised  by:

  • Geographical differentiation:  A strong differentiation is observed in the unemployment rates for various parts of Poland, with the highest unemployment rate for a single region standing at more than twice the figure of the lowest. e.g. in the Warmińsko – Mazurskie voivodeship the unemployment rate in February 2011 was 21, 5 while in the voivodeship Mazowieckie – 10%. The highest unemployment rates are primarily seen in regions dominated by the agriculture, mining and manufacturing industries.

    Unemployment rate by voivodships (at the end of February 2011).

  • Selectivity: Polish unemployment is, first of all, is a problem of young people (below 35 years of age). According to Eurostat data 24,9% among unemployed people are young. It is because young people have often no experience on the job market, their qualifications are  incompatible with employers demandings and they are not flexible enough. Difficulties with finding a job are also experienced by women and people over 50 years. People of this last group spent at least half of their life under the communist system so they are not well adjusted to the capitalist system. They are unwilling or they do not have a chance to re-educate and move from their home to the areas where more jobs are available.

    Unemployment among young people in Europe

  • Period of unemployment: unemployment in Poland tends to be of a structural or long-term nature. As we can see in the chart there are 34% of unemployed who cannot find a job above 12 months. This in turn has an impact on the health and well being of large segments of society.

The forecasts predict that joblessness in Poland will stand at 9.9 per cent by the end of 2011, before steadily declining to 8.6 per cent by the end of 2012 and to 7,3 at the end of 2013.

Forecasts

Despite economic growth during last 20 years and a large emigration of job seekers, unemployment in Poland has remained at some of the highest levels in Europe. This points to ‘structural’ unemployment resulting from imbalances in the labour market. The following characteristics in particular have been decisive in causing this:

  • Antiquated labour laws biased against employers
  • Significant bureaucracy and legal difficulties when hiring and firing providing a temporary solution to employers that avoids taxes and gives them more flexibility to hire and fire prevents the development of a normal healthy labour market, which protects the rights of employer and employee during a productive career. Such techniques also discourages employers from hiring.
  • Large wage taxes and expensive social security benefits (ZUS) – employers often avoid the expensive levels of social security costs and taxes associated with hiring an employee on a permanent contract and hire workers on a long-term contract or short-term temporary contract
  • Influential trade unions preventing change – Trade Unions  have maintained strong political influence and have acted to prevent modernisation of the labour system. Protecting the interests and benefits of their members in the mining, manufacturing and public sectors, has in turn prevented the possibility of a more flexible labour system in the wider economy, which has affected developing industries.
  • Vocational activation programmes suffering from shortage of public funding – the government have to give more money for them

Poland’s economic achievements over the past 2 decades should be celebrated. However the danger is that using these achievements to justify and sustain an inflexible, antiquated labour system may prevent  long term growth, discourage entrepreneurship and result in high levels of structural unemployment in Poland for years to come. I hope that the government will fight with unemployment more effective than now and interpose essential reforms.

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  1. I don’t know why when I am reading this article I almost hear a voice in my head reading me it, unfortunately it’s my voice not yours. :D

    I have to admit that unemployment in Poland is one of the most important issue these days. Because of this many of young people go abroad for a work. Because of this our country lost many of talented specialists and if government didn’t do anything this situation could remain for a long time. There is necessary a good education reform in Poland and I don’t know if the last changes there go in a good direction… We need to administration reform as well. It’s a job for a clever and far-sighted economist or rather group of them. But who will give them a voice in politics?…

    Very good and professional article!
    Keep writing!

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