Real unemployment in Poland totals 16%

01.02.2018 15:20|Marcin Lipka

“At first glance the labor markets of both Poland and the Netherlands look very similar, when reading the latest Eurostat data. The unemployment rate in Poland and the Netherlands are, in fact, exactly the same at 4.4%. Unfortunately, the other parameters show how much Poland is still behind the Dutch,” says Marcin Lipka, Conotoxia senior analyst.

Marcin Lipka, główny analityk Cinkciarz.pl

Although the unemployment rate is a very comfortable measure of the labour market’s condition, it informs us only about the percentage of people who are looking for paid employment compared to those who are professionally active. However, when looking at the data in this way, it isn’t possible to find out the percentage of people of working age who actually have a job, which is key information for the economy. Differences that are not only at the employment level are well illustrated by comparing other data from Poland and the Netherlands.

Similar in unemployment rate only

December publications from Eurostat show that the unemployment rate in Poland and the Netherlands is 4.4%. The data is comparable, as the surveys are obtained by the same methodology, household surveys (about 30,000). In both cases, the seasonal effect on the labor market is also taken into account (in winter, for example, agriculture or construction activities decrease), which also allows for a better comparison.

What is interesting is the fact that unemployment among Polish women is even lower than it is among Dutch women amounting to 4.5% and 4.7%, respectively. Another interesting element: the unemployment of older people aged 50-64 is higher in the Netherlands at 4.2% than it is in Poland at 3.4% (data for the third quarter of 2017). However, what needs to be emphasized is that employment in both countries doesn’t need to look similar.

Employment - huge differences

Eurostat data indicates that the percentage of employees in the Netherlands aged 15-64 was 76.3% at the end of the third quarter of 2017. In Poland it totalled 66.5%, which was almost 10% less.

A 10% difference in the Netherlands favour is diametric. To equalize the result, Poland would have to increase its employment by 2.4 million people. On the other hand, if these 2.4 million people that are currently economically inactive suddenly started looking for a job, the unemployment rate would jump in Poland from the current 4.5% to over 16% and the number of unemployed would rise from around 800,000 to 3.2 million. This shows the scale of unemployment that is hidden in professional inactivity.

Young people lower the result the most

It is not surprising that the serious differences in the employment levels of Poles and Dutch relate to people aged 55-64. In Poland it’s 49.4% (lower than in Spain, for example) and in the Netherlands, the level amounts to 66%. For years, however, senior politics have been deficient by the Vistula in the context of elder employment and the maintenance of their professional activity.

A surprise could be other information. According to Eurostat, the employment rate of young people aged 15-24 years in Poland is only 30%, and in the Netherlands it amounts to 64%. Of course, the young Dutch do not work full-time and a large part of them are students (45% of people aged 25-34 have a higher education, similar to Poland). This may mean that, apart from the lack of incentives for systemic support in employing young people (eg. taxes), combining work and study in Poland is just not culturally popular.

Better, longer and less intense

Other serious systemic neglect is that in Poland, part-time employment is not promoted. In the Netherlands, over 70% of women work part-time, likely for the reason of making it easier to combine family and profession. In Poland, however, this statistic only amounts to 10%.

Lower work intensity may also allow Dutch people to stay in the labor market longer, save money for retirement longer and enjoy its relatively high level in relation to recent earnings. The Dutch are professionally active for at least 40 years and Poles work for around 32.9 years. This is a huge difference, which poses a serious challenge, especially for the possibility of accumulating sufficient capital for Poles’ golden years.

 


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