Polish labor market is among the weakest of the EU

Dec 8, 2016 12:17 PM|Conotoxia.com

We have been receiving information regarding a decreasing unemployment level in Poland for many quarters. This may suggest that the situation in the Polish labor market is improving. However, this is not as positive as it seems, especially among those who are starting or ending their professional career – claims Marcin Lipka, Cinkciarz.pl senior analyst.

Marcin Lipka, główny analityk Cinkciarz.pl

According to the Eurostat data for October, the unemployment rate in Poland is at the level of 5.7%, against the average level of 8.3% for the European Union and against the 9.8% level for the euro zone. Only six out of twenty-eight countries of the EU have a lower unemployment rate than Poland. The Polish unemployment rate decreased by 1.6% during the course of one year. Moreover, it decreased by 5% since its peak from March 2013.

The low unemployment rate suggests a splendid condition of the Polish labor market. However, this index doesn’t say much about actual employment. After all, information regarding the amount of employed citizens is significant for proper economic development.

Young people don’t work, nor do they look for a job

Eurostat, the Polish Central Statistical Office (GUS) and the International Labor Organization (ILO) define an employed person as a is a person aged 15 and over (or 16 and over in Iceland and Norway) who, during the reference week performed work - even if just for one hour a week - for pay, profit or family gain. Apart from salaried employees, this definition also includes people who work in agricultural sector, self-employed people and students who have an internship at particular companies.

Employment for people within the 25-54 age bracket is relatively positive. This at the level of 80.5% and takes the fourteenth position within the European Union, which is basically in the middle of the ranking. France has a very similar employment level for this age bracket (80.3%), even though the unemployment level there is at the level of 9.7%.

The situation is definitely worse when it comes to young people. The Eurostat data shows that the employment rate for 15-24 age bracket in Poland was only at the level of 28.6% in the second quarter of 2016. The average result for the EU is at the level of 33.8%. This index is even lower regarding Polish women at the level of 23.6%. This is approximately 8 percentage points less than in the EU. The highest employment rate has been quoted in Holland, Denmark and Sweden (60.9%, 60.8% and 45.6%, respectively).

However, a low employment rate doesn’t mean that young Poles are looking for a job. The unemployment rate for people who are under 25 is at the level of 15.6%. This result is lower than the average for the EU and for Sweden (18.4% in both cases). If the percentage of unemployed young Poles increased to the average EU level, this would mean 230k more employed people.

Only eight EU countries have a lower employment rate

The situation is even worse in the 55-64 age bracket. Here, the employment rate was at the level of 45.9% at the end of the second quarter of 2016. This is approximately 10% less than the EU’s level (55.1%). Moreover, better results have been quoted in Spain (48.8%), Italy (50.1%) and Portugal (52.2%).

Poland’s result in this category is a far cry from the EU leaders. The employment rate for the 55-64 age bracket is the highest in Sweden (75.4%), Germany (68%) and Lithuania (64.4%). If the percentage of Poles in this age bracket increased to a minimum of the EU average, the amount of employed Poles would be approximately 500k people more.

If we take the working age (15-64 years) into consideration, we will see that the employment rate of the EU is at the level of 66.6% and in Poland it is at 64.5%. Only eight EU countries have a worse result. Moreover, the employment rate is at a higher level in countries such as Slovakia (65%), Hungary (66.4%), Czech Republic (71.7%) and Portugal (65%). The leading countries, such as Sweden, Denmark, Germany and Holland, achieve results at the level of approximately 75%.

The situation in the Polish labor market is definitely worse than Poland’s unemployment rate suggests. It seems that the reform to activate those who are not economically active is necessary. However, it will most likely take many years until Poland catches up with the average EU employment rate.


Dec 8, 2016 12:17 PM|Conotoxia.com

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