The average wage myth

28.04.2017 10:25|Conotoxia.com

In 2016, the average wage in the Polish company sector was PLN 4,277 gross. However, approximately 50% of people employed in this sector earn less than PLN 2,500 net. Moreover, employees of small companies usually earn less than PLN 2,000 net. A commentary from Marcin Lipka, Cinkciarz.pl senior analyst.

Marcin Lipka, główny analityk Cinkciarz.pl

The average wage rate is usually distorted by large disproportions in salaries. In addition, the monthly report regarding this index from the Polish Central Statistical Office (GUS) is distorted by its methodology – the sample group only includes companies that hire at least nine people.

Such companies usually use foreign or public capital. Additionally, they’re based in well prospering cities and hire people whose qualifications are above average. Nevertheless, these companies hire a combined total of 6 million employees, whereas according to the GUS data, the amount of Poles with a job contract is at the level of approximately 13 million and approximately 3 million Poles are self-employed.

One million of the company sector employees work in Warsaw, where the average gross salary in 2016 was at the level of 5,537 PLN. As a result, the contribution of Poland’s capital city to the average wage rate is higher than 15%, whereas its contribution to Polish households is approximately 5%. Łódź is the third largest city in Poland. The amount of people who live there and work in the company sector is at the level of 120,000 people. This is 12% of those employed in the company sector in Warsaw.

Small companies, small wages

More accurate information can be found in the GUS quarterly reports regarding employment and wages. They include the data from the public sector. According to the GUS data from September 30th, 2016, the amount of people employed in the public sector was at the level of approximately 3 million people and their average salary was PLN 4,545 gross. Moreover, the reports show that the average wage for the entire private sector is at the level of PLN 3,880 gross. This index includes companies that hire less than nine employees, as well.

Every other year, the GUS publishes wage structure data. The recent document states that in October 2014, the average gross wage for companies that hire at least nine people was at the level of 4,107 PLN. However, the median for the entire company sector was at the level of PLN 3,291 gross. This means that half of the company sector employees earned more than this value and the other half earned less. Nevertheless, this data also does not contain data regarding the salaries in the smallest companies.

A crucial element of this report is the information that 37.1% of the private sector earns less than PLN 2,469 gross. This data does not include employees of small companies (less than nine people). However, we can find information regarding their salaries in the GUS annual report on small businesses. In 2015, small companies had 3.74 million employees and 1.31 million of them earned the average monthly salary at the level of PLN 2,397 gross. This is 58% of the average wage in companies that hire at least nine employees (data for 2015).

Millions of Poles earn less than 2,000 PLN

The average salary for the Polish company sector in 2016 (PLN 4,277 gross) was very different from the actual wages of many Poles. It’s most likely that 50% of employees received their salaries at the level of PLN 3,420 gross. After subtracting tax and insurance premiums they would receive 2,450 PLN. Moreover, approximately 40% of the private sector employees earn less than PLN 2,000 net. This clearly shows how considerable the difference between the average wage and actual wages for the majority of Poles really is.

 


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