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Unemployment is record low, but many of Poles do not have a job. How is this possible?

According to the Eurostat data, the unemployment in Poland is at the level of 6.9%. This is definitely lower than the average within the European Union (8.9%), as well as the average within the eurozone (10.3%). However, does this information really mean that the other countries of the EU should envy us? Not necessarily. A comment regarding these statistics from Marcin Lipka, Cinkciarz.pl analyst.

By looking at the recent statistical data from the national labor market, it may seem that Poland has a nearly full employment level. The unemployment rate that was measured, according to a study on the population's economic activity which is used by the Polish Central Statistical Office (GUS) and the Eurostat, has decreased by 3% since the end of 2013, and is currently at the level of 6.9%. This is the lowest level since the economic transformation in the beginning of the 90s. Moreover, if we compare these values with the values of other European Union countries, we may get the impression that Poland is very successful regarding the labor market. According to the Eurostat data from the end of January, unemployment in Poland is lower than unemployment in Sweden (7.0%), Belgium (7.9%), and Ireland (8.6%). Theoretically, the situation in Finland and France is even worse (respectively 9.4% and 10.2%). However, the situation is completely different when looking at different parameters of the labor market.

An employment index is a relation of the amount of employed people to the amount of people of a working age (15-64 years). At the end of 2015, it was at the level of 63.7%. This is a lower level than in France (64.3%, the Insee data for the end of 2015), where the unemployment rate is higher by half that of the unemployment rate in Poland. On the other hand, the employment index in Sweden is at the level of 76.8%, the same unemployment level as in Poland.

Low unemployment and low employment. How is this possible?

When searching for the reasons for such a low employment index, we can quickly notice that it is depreciated by people within the range of 55-64 years. According to the GUS data, the employment index for this range is at the level of 45.8%. It is very interesting that the unemployment rate in this age group is also very low. What does this mean? It means that there are more than 2.8 million people who are not only unemployed, but they are also not looking for a job.

Moreover, according to the Eurostat data from the end of 2014, only 32.9% of women in Poland from the age group 55-64, are employed. This is worth noting, because the average for the entire European Union regarding this group, is 45.2%. In the case of Sweden and Ireland, the level of this index is 71.5% and 44.7%, respectively. An interesting fact is that Poland is also overtaken in this category by Spain (37.8%). Unemployment in this country is officially three times higher than in Poland at the level of 20.5%.

The Polish labor market also has a serious problem with people with lower qualifications. According to the OECD data, at the end of 2013, the percentage of employed people within working age, and with an education level lower than secondary, only made up 38.5% of employed Poles. This was the second lowest level out of 34 OECD members. We were overtaken in this category by Greece (45.1%), France (54.5%), and Sweden (62.5%).

The statistics are clearly better when looking at a group of people with a higher education. According to the OECD, the employment index in this category for both sexes in Poland, is 84.8%. This puts us above France (84.4%), and at the same position as the United Kingdom (84.8%). A high index of employment is also confirmed by a low level of unemployment. According to the Eurostat data from the end of 2014, the level of unemployment for people with a higher education was only 4.1%. This is practically the same value as Sweden (4.0%), and definitely less than France (5.8%), Ireland (6.1%), and Spain (13.8%).

What needs to be done to make things better?

So what is the key to actually improve the situation in the Polish national labor market? The data is showing that the percentage of people with a higher education should grow. This is confirmed by the OECD studies, which are included in the “Education at a Glance 2015” report. The index of employment for Poles within the age range of 55-64 who possess a higher educational degree, is 66% against 45.8% for the entire Polish population, and is only 25% for the people possessing only a primary education. This will allow Poland to clearly increase the general level of employment, which will bring the country to the average values that are observed in developed countries.

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