Unemployment is good news

27.11.2018 16:26|Marcin Lipka

“Unemployment in Poland has risen for the first time in almost three years. This sounds ominous, but this time it is good news due to the simultaneous growth in employment and activity levels, which have reached long-term records at the same time,” writes Marcin Lipka, Conotoxia Senior Analyst.

The Polish Central Statistical Office (GUS) data on the labour market for Q3 (Labour Force Survey) showed an increase in unemployment from 3.6 to 3.8 per cent. In recent years we have become accustomed to the decrease in the number of job seekers. Why did the situation reverse and is the increase in the unemployment rate a positive thing?

Situation is better despite the increase in unemployment

Unemployment increased by 45 thousand in the third quarter this year compared to the previous quarter. However, in most cases this does not mean that so many people have lost their jobs, as at the simultaneously employment increased by 52 thousand to 16.62 million people.

Increases in employment and unemployment must mean that the percentage of economically inactive people has decreased. This group is usually the biggest problem for the labour market. If someone is not looking for a job, it is very difficult for them to be among the group of employees. It is possible that rising salaries have finally "pulled" some people out of inactivity and motivated them to try to find a job. Some have succeeded in this and have been employed, and some are still among the unemployed.

The economic inactivity rate (for employment over the age of 15 years old) decreased to 43.2%. It is still a very high result compared to countries with the best parameters on the European labour market (the Netherlands, Sweden or Switzerland - ranging from 31 to 35%), but at the same time, it is the best result for Poland since Q3 of 2000.

Employment record

A record level (at least for 20 years) has also reached the percentage of employed aged 15-64, which is considered by Eurostat as the baseline in most analyses related to the labour market. According to GUS, it currently stands at 68 per cent.

However, Polish records do not mean that we are at the forefront of this competition in Europe. Currently, we are achieving results close to the EU average, together with Bulgaria and Ireland. Leading EU countries have an employment rate of 75-80 per cent (Czech Republic, Germany, Estonia, the Netherlands and Sweden).

To achieve such results, the Polish economy would have to create 2-2.5 million new payrolls. This would require an introduction of broad incentives (e.g. tax incentives) to employ relatively young people (18-24 year-olds), as well as those who are approaching retirement age (55-64 year-olds). Significant expansion of childcare institutions and the promotion of part-time employment would also be necessary to enable women to return to work relatively quickly and without problems after bearing children.


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