Nominal pay increases are set to continue although at a slower rate, forecasters predict. Poland’s employment growth, meanwhile, is contracting.
ADVERTISEMENTEmployees in Poland’s enterprise sector received, on average, 10.6% more in monthly wages in July 2024, compared with the same period a year earlier.
When compared with the previous month, wages grew by 1.6%, Poland’s statistics office confirmed on Wednesday.
In June, the annual change came in at 11%, while the monthly shift was recorded at 1.8%.
This means that wages are still increasing when they aren’t adjusted for inflation, although the rate of growth is slowing.
« The rise of average nominal wages is not surprising given that Poland is still facing one of the highest inflation rates in the EU, » said Dr Pawel Bukowski, economics professor at UCL’s School of Slavonic and East European Studies.
Poland’s inflation rate came in at 4.2% in July, compared with the same month in 2023.
« What is more surprising, » continued Bukowski, « is the magnitude of the [wage] growth, significantly exceeding the inflation rate, which suggests a rise in real wages. »
Professor Mahmut Zeki Akarsu, Assistant Professor of Economics at the University of Warsaw, similarly told Euronews that « companies are increasing wages to keep up with inflation, retain and attract talent, or simply to adjust to the higher cost of living ».
Piotr Lewandowski, labour economist at the Institute for Structural Research in Warsaw, noted: « Poland has an acute labour shortage, resulting mostly from demographic trends – population ageing reduces labour supply. This improves worker scarcity and workers’ bargaining power, pushing wages up. »
Employment growth in the red
Meanwhile on Wednesday, Poland’s statistics office released data on employment growth in the country.
This indicator has been in contraction territory since October 2023, although declines remain relatively modest.
Employment dropped by 0.4% year-on-year in July, following a 0.4% year-on-year reduction in June.
« Manufacturing industries are doing relatively poorly, struggling with weak economic conditions in the eurozone (especially in Germany) and strong competition from Asia, » said Piotr Poplawski, senior Poland economist at ING.
« However, the scale of the deterioration remains quite small … due to the demographic situation and the outflow of migrants from Ukraine. »
« In such an environment, companies are still very reluctant to cut jobs, fearing difficulties with finding employees when the economy improves. »
Professor Akarsu at Warsaw University nonetheless added that companies are looking for ways to cut costs due to « sluggish » economic growth, leading to some lay-offs. He warned that Polish firms « don’t have a positive outlook for the near future ».
Poland’s statistics agency noted that the enterprise sector concerns most businesses that engage in commercial activities.
