"The Polish Central Statistical Office (GUS) reported that for the first time in history, the average wage in the enterprise sector, excluding the impact of working days and seasonal effects, exceeded 5,000 PLN gross. Should Poland be satisfied with this rate of salary growth?" writes Marcin Lipka, Conotoxia Senior Analyst.
For the first time, the wages of Poles exceeded the 5 thousand PLN gross threshold. According to the latest GUS data, this is the average amount earned by Poles in the first month of 2019. Although as early as in December the average salary amounted to over 5.2 thousand PLN, these data were disturbed by additional one-time payments at the end of the year. After taking into account this effect, i.e. the seasonal adjustment of the publication, January was the first time that this round limit was exceeded and the value surpassed PLN 5,000 (exactly 5016 PLN).
Rapid growth pace
During the year, i.e. between January 2018 and 2019, the increase in wages and salaries amounted to 7.04%. This is quite a lot given that prices in the same period increased by 0.9%. Real purchase opportunities for Poles have risen by over 6%, taking into account gross wages and salaries in the sector of companies employing more than 9 people.
An interesting fact is that the previous round threshold, i.e. 4 thousand PLN gross, was exceeded in October 2014. Since then, salaries have increased by 25 per cent in nominal terms, i.e. by 5.4 per cent a year on average. And how much was the real growth, i.e. taking into account price changes in the Polish economy?
According to the EU methodology, since November 2014, inflation has increased by only 2.6%. Therefore, real wages of Poles working in companies employing more than 9 people have increased by over 22% within just over four years. This is a very good result, especially in real terms, i.e. when we consider price increases.
Not only better in larger companies
Of course, monthly data of the GUS show the average for companies employing more than 9 people (approx. 6.4 million people). After the extension of these data to the public sector (education, health care and social assistance) and small companies, the seasonally-adjusted average drops to 4788 PLN gross. However, in comparison with Q3 2014 (these data are published quarterly) is a very similar nominal growth as in the case of larger companies and amounts to 24%. Taking into account inflation, real remunerations in just over four years have risen by more than 20% in the Polish economy.
The average is distorted by extreme values, i.e. by the highest salaries. The median, which historically in Poland is about 80 per cent of the average, shows that half of Poles earn at least 3830 PLN gross. This, in turn, means that half of the amount of Poles receive more than 2680 PLN net and half below this limit.
Almost everyone earns a lot more
Net wages in the whole economy are, of course, much less spectacular than gross wages in the enterprise sector employing more than 9 people. However, the percentage increases are similar regardless of which group of workers they affect. Thus, it can be said that recent years have been successful in terms of wage growth for Poles.