Poland: Evolution of Wages during the Crisis

  • Observatory: EurWORK
  • Topic:
  • Published on: 05 July 2012



About
Country:
Poland
Author:
Marta Trawinska
Institution:

Disclaimer: This information is made available as a service to the public but has not been edited by the European Foundation for the Improvement of Living and Working Conditions. The content is the responsibility of the authors.

Trends and relations with other working conditions

Statistical data show that in the years 2006-2010 the average monthly salary in Poland grew together with the rest of economy, as well as in the five sectors selected for this study. There are noticeable differences between sectors (for instance the relatively low-paid accommodation and food services and well-paid financial services). Differences also occur in men’s and women’s wages. There is also a discrepancy between the least and the most earning employees. There is a limited number of collective labour agreements regarding trade-off, while the policies affecting the groups of employees most sensitive to the economic crisis regard mostly the minimum wage mechanism.

Questionnaire

Block 1: Wage trends 2006-2010

1.1.a Please provide annual statistics on average gross monthly earnings or yearly average wages by gender, occupational category (ISCO), part-time/full-time in your country from 2006 to the latest available year.

It should be noted that there has been an overall lack of key statistical data, which impedes the possibility of thoroughly analysing Polish trends in wages in the years 2006 – 2010.

Table1. Average gross monthly earnings in Poland, 2006-2010 (in PLN).
There has been a permanent increase of nominal and real wages. The increase occurs for the whole economy as well as for the specific occupations. There is no statistical data about the difference in wages of men and women, which impedes a detailed analysis of the changes. The only available data from 2008 imply the disproportion is significant (women earned 19% less than men on the average). The difference in wages is also visible across occupational groups.
 

2006

2007

2008

2009

2010

Total

2,475.88

2,672.58

2,942.17

3,101.74

3,224.98

By gender          
1. Male

n.a.

n.a.

3,557.24*

n.a.

n.a.

2. Female

n.a.

n.a.

2,892.88*

n.a.

n.a.

By ISCO occupational classification          

1 Managers

.

5,917.29*

n.a.

7,219.37**

n.a.

7344,00 ***

2 Professionals

.

3,316.84*

n.a.

3,979.02**

n.a.

4,327.31***

3 Technicians and associate professionals

.

2,799.95*

n.a.

3,341.58**

n.a.

3,652.71***

4 Clerical support workers

.

2,168.30*

n.a.

2,713.47**

n.a.

2,978.82***

5 Service and sales workers

.

1,480.12*

n.a.

1,856.99**

n.a.

2,107.36***

6 Skilled agricultural, forestry and fishery workers

.

1,781.07*

n.a.

1,979.56**

n.a.

2,203.32***

7 Craft and related trades workers

.

2,178.05*

n.a.

2,673.58**

n.a.

2,772.46***

8 Plant and machine operators, and assemblers

.

2,227.08*

n.a.

2,722.19**

n.a.

3,006.33***

9 Elementary occupations

.

1,524.53*

n.a.

1,895.86**

n.a.

2,074.15***

By contract type          
1. Full-time

n.a.

n.a.

n.a.

n.a.

n.a.

2. Part-time

n.a.

n.a.

n.a.

n.a.

n.a.

Notes: * - data for October 2006; **- data for October 2008; *** - data for October 2010.

Source: Central Statistical Office (GUS)

1.1.b Please provide the following methodological information on the provided statistics:

  • Definition of the earnings (what components are included or excluded?):

The average monthly (nominal) wages and salaries per paid employee were calculated assuming:

  • personal wages and salaries excluding wages and salaries of persons engaged in outwork (the official GUS term for home based work), apprentices and persons employed abroad,

  • payments from profit and balance surplus in co-operatives,

  • annual extra wages and salaries for employees of public entities,

  • fees paid to selected groups of employees for performing work in accordance with a labour contract, e.g., journalists, film producers, radio and television programme producers.

Data on average monthly wages and salaries are presented in gross terms.

  • Coverage (sectors excluded, if any; type of employees):

The data on total average monthly wages and salaries refer to all units of the national economy, i.e. including units with the number of employed persons up to 9 persons.

  • Constant or current prices (real or nominal terms): nominal

  • Source data (for example administrative data; national accounts or specific survey):

Central Statistical Office (GUS)

1.2.a Please provide for the selected sectors, when available the following annual trend statistics on average gross monthly earnings and important context variables. The time period is 2006 until the latest available year.

Table 2. Sector C - Manufacturing
In manufacturing we observe an increase of the average monthly salary and simultaneously since 2008 a decline of employment.
 

2006*

2007*

2008

2009

2010

Annual average gross monthly earnings (in PLN)

2,515.31**

2,770.74**

2,683.17

2,765.18

3,147.30

Annual average gross monthly earnings, Male (in PLN)

n.a.

n.a.

3,222.11***

n.a.

n.a.

Annual average gross monthly earnings, Female (in PLN)

n.a.

n.a.

2,320.77***

n.a.

n.a.

Total employment (in thousands)

2174,3**

2262,7**

2591,8

2420,6

2054,1

Total full-time equivalents

n.a.

n.a.

n.a.

n.a.

n.a.

Average weekly working time

41,2

40,6

39,9

39,6

39,9

% Productivity yearly increase

n.a.

n.a.

n.a.

n.a.

n.a.

Collectively agreed pay yearly increase in percentage

-

-

-

-

-

<Measure of wage dispersion><

n.a.

n.a.

n.a.

n.a.

n.a.

Notes: * - Since the 2008, the information has been presented according to the Polish Classification of Activities 2007 (PKD 2007), which was elaborated on the basis of NACE Rev 2.Before 2008 the information has been presented according to the PKD 2004, which was elaborated on the basis of NACE Rev 1; ** - data for October 2008; *** - data for October 2010.

Source(s): Central Statistical Office (GUS)

Table 3. Sector F - Construction
In construction we observe an increase of the average monthly salary and a decline of employment since 2009.
 

2006*

2007*

2008

2009

2010

Annual average gross monthly earnings (in PLN)

2,831.54**

3,250.79**

2,531.50

2,659.36

3,540.20

Annual average gross monthly earnings, Male (in PLN)

n.a.

n.a.

3,219.11***

n.a.

n.a.

Annual average gross monthly earnings, Female (in PLN)

n.a.

n.a.

3,293.97***

n.a.

n.a.

Total employment (in thousand)

376,5**

399,1**

877,5

882,7

471,7

Total full-time equivalents

n.a.

n.a.

n.a.

n.a.

n.a.

Average weekly working time

45,1

43,8

43,4

42,6

42,6

% Productivity yearly increase

n.a.

n.a.

n.a.

n.a.

n.a.

Collectively agreed pay yearly increase in percentage

-

-

-

-

-

<Measure of wage dispersion><

n.a.

n.a.

n.a.

n.a.

n.a.

Notes: * - Since 2008, information has been presented according to the Polish Classification of Activities 2007 (PKD 2007), which had been developed on the basis of NACE Rev 2. Before 2008 information was presented according to the PKD 2004, which had been developed on the basis of NACE Rev 1; ** - data for October 2008; *** - data for October 2010.

Source(s): Central Statistical Office (GUS)

Table 4. Sector I - Accommodation and food services
In accommodation and food services we observe an increase of the average monthly salary and a sharp decline of employment since 2009. It is worth noticing that this sector has the lowest wages compared to other sectors.
 

2006*

2007*

2008

2009

2010

Annual average gross monthly earnings (in PLN)

1,988.43**

2,200.94**

1,829.02

1,917.77

2,405.81

Annual average gross monthly earnings, Male (in PLN)

n.a.

n.a.

2,364.05***

n.a.

n.a.

Annual average gross monthly earnings, Female (in PLN)

n.a.

n.a.

1,896.07***

n.a.

n.a.

Total employment (in thousands)

107,9**

114,3**

274,7

252,5

129,8

Total full-time equivalents

n.a.

n.a.

n.a.

n.a.

n.a.

Average weekly working time

41,7

42,3

40,4

38,9

39,9

% Productivity yearly increase

n.a.

n.a.

n.a.

n.a.

n.a.

Collectively agreed pay yearly increase in percentage

-

-

-

-

-

<Measure of wage dispersion><

n.a.

n.a.

n.a.

n.a.

n.a.

Notes: * - Since 2008, information has been presented according to the Polish Classification of Activities 2007 (PKD 2007), which had been developed on the basis of NACE Rev 2. Before 2008 information was presented according to the PKD 2004, which had been developed on the basis of NACE Rev 1; ** - data for October 2008; *** - data for October 2010.

Source(s): Central Statistical Office (GUS)

Table 5. Sector K – Financial services
In financial services, banking sector we observe an increase of the average monthly salary and simultaneously since 2009 a decline of employment. Employees of this sector have the highest average wages in comparison to other sectors.
 

2006*

2007*

2008

2009

2010

Annual average gross monthly earnings (in PLN)

4,873.36**

5,232.02**

5,046.83

5,335.59

5,672.30

Annual average gross monthly earnings, Male (in PLN)

n.a.

n.a.

7,143.87***

n.a.

n.a.

Annual average gross monthly earnings, Female (in PLN)

n.a.

n.a.

4,539.91***

n.a.

n.a.

Total employment (in thousands)

248,3**

263,8**

348,0

333,9

277,8

Total full-time equivalents

n.a.

n.a.

n.a.

n.a.

n.a.

Average weekly working time

38,8

38,8

38,8

38,4

38,9

% Productivity yearly increase

n.a.

n.a.

n.a.

n.a.

n.a.

Collectively agreed pay yearly increase in percentage

-

-

-

-

-

<Measure of wage dispersion><

n.a.

n.a.

n.a.

n.a.

n.a.

Notes: * - Since 2008, information has been presented according to the Polish Classification of Activities 2007 (PKD 2007), which had been developed on the basis of NACE Rev 2. Before 2008 information was presented according to the PKD 2004, which had been developed on the basis of NACE Rev 1; ** - data for October 2008; *** - data for October 2010.

Source(s): Central Statistical Office (GUS)

Table 6. Sector O – Public administration
In public administration we observe an increase of the average monthly salary and a decline of employment since 2009.
 

2006*

2007*

2008

2009

2010

Annual average gross monthly earnings (in PLN)

3,376.91**

3,603.10**

3,799.72

4,020.28

4,151.06

Annual average gross monthly earnings, Male (in PLN)

n.a.

n.a.

4,624.75***

n.a.

n.a.

Annual average gross monthly earnings, Female (in PLN)

n.a.

n.a.

3,800.88***

n.a.

n.a.

Total employment (in thousands)

566,1**

581,1**

919,0

964,5

641,3

Total full-time equivalents

n.a.

n.a.

n.a.

n.a.

n.a.

Average weekly working time

39,3

39,0

38,7

38,4

38,5

% Productivity yearly increase

n.a.

n.a.

n.a.

n.a.

n.a.

Collectively agreed pay yearly increase in percentage

-

-

-

-

-

<Measure of wage dispersion><

n.a.

n.a.

n.a.

n.a.

n.a.

Notes: * - Since 2008, information has been presented according to the Polish Classification of Activities 2007 (PKD 2007), which had been developed on the basis of NACE Rev 2. Before 2008 information was presented according to the PKD 2004, which had been developed on the basis of NACE Rev 1; ** - data for October 2008; *** - data for October 2010.

Source(s): Central Statistical Office (GUS)

1.2.b Please provide again the following methodological information on the provided statistics:

  • Definition of the earnings (what components are included or excluded?):

The average monthly (nominal) wages and salaries per paid employee were calculated assuming:

  • personal wages and salaries excluding wages and salaries of persons engaged in outwork (it is official GUS term for home based work), apprentices and persons employed abroad,

  • payments from profit and balance surplus in co-operatives,

  • annual extra wages and salaries for employees of public entities,

  • fees paid to selected groups of employees for performing work in accordance with a labour contract, e.g., journalists, film producers, radio and television programme producers.

Data on average monthly wages and salaries are presented in gross terms.

  • Coverage (sectors excluded, if any; type of employees):

The data on total average monthly wages and salaries refer to all units of the national economy, i.e. including units with the number of employed persons up to 9 persons. Information on the number of the employed persons and on worked time regards units of the national economy excluding economic entities employing up to 9 persons. It does not include individual agriculture, people employed abroad, employed on social, political and trade union organisations and employed in the scope of national defence and public safety. Data on employment at the end of a year cover: employees hired on the basis of an employment contract, owners and co-owners of establishments engaged in economic activity and contributing family workers, outworkers, agents and persons employed by agents, members of the agricultural production co-operatives.

  • Constant or current prices (real or nominal terms): nominal.

  • Source data (for example administrative data; national accounts or specific survey):

Central Statistical Office (GUS)

  • Definition of the labour productivity data: n.a.

1.3 Please provide for your country the available statistical insights/studies on the following wage-related trends, briefly commenting: the period 2006-2010.

  1. Wage drift: differences between the actual wage increase and the collectively agreed wage increases; Are there also remarkable sector differences in this regard? (cf. the 5 selected sectors)

No such data are available, because the collective bargaining in Poland predominantly takes place at company level and these agreements are often kept confidential (see Pay developments - 2010).

Until the end of 2009 the indexation mechanism operated in Poland, which was regulated by the Act of 16 December 1994 on negotiating increases in average remuneration in economic operations.

  1. Wage inequality or dispersion: differences between highest and lowest wage categories; the % of low-wage workers; Are there also remarkable sector differences in this regard? (cf. the 5 selected sectors)

According to Global wage report 2010/2011: wage policies in times of crisis since mid-1990s, the proportion of people on low pay – defined as less than two-thirds of median wages – has increased in Poland, from 18.7% in the years 1995-2000 to 22.7% in the period between 2007-2009.

Data on sectoral differences are not available.

  1. The use of variable pay and financial participation; Are there also remarkable sector differences in this regard? (cf. the 5 selected sectors)

No data are available.

Block 2: Studies on the relationship with working conditions

2.1.a Please provide information on relevant studies or statistical findings which show how trends in employment creation or destruction explain possible negative wage trends during the current the crisis in the country. Is there for example playing a composition effect: higher paid industry jobs are cut and partly replaced by lower-paid service jobs? Is it a question of shorter working hours, less overtime?

In case of Poland we do not observe negative wage trends, whether nominal or real, although their growth rate has been decreasing .

2.1.b If there is no negative wage trend, please provide information on relevant studies or statistical findings which explain why wages in the country did not react in a negative way to this economic shock of the current crisis? Are trends in working conditions and employment included in these explanations?

There is no study or statistical data, which would directly explain the increase of wages in Poland in spite of the current crisis. However, more general research and data may be referred to in order to elucidate this question. According to the report Employment and Social Developments in Europe 2011 Polish labour market is characterised by a so-called hybrid polarisation/upgrading, which is a situation, where employment (since 2008) has been on the rise for the two top quintiles of wages, while it was declining for the two bottom ones. The increased employment among the higher-paid groups and the decline of employment in the lower-paid ones could have translated into the observed increase of the nominal average monthly salary. This impact could be all the more distinct as the research The dynamics of income inequality in Poland in a comparative perspective – major conclusions from research and statistical data shows that in Poland we observe clear and considerable inequality of the redistribution of wealth. The study by GUS of October 2010, shows that 10% (first decile/D1) of the lower paid employees obtained the average gross monthly salary of 1478.70 PLN at the most, while 10% (ninth decile/D9) of the higher-paid employees obtained the average gross monthly salary of 5850.66 PLN at the least. The low earners in national economy (D1) were mostly men (50.9%), employees of the private sector (96.0%). The high earners (D9) were also men (65.9%), employees of the private sector (58.7%). It should be emphasised that according to the information included in the Global wage report 2010/2011: wage policies in times of crisis wage inequality in Poland is growing. According to the report one can observe change in D9/D1 ratio from 3.5 in 1995-2000 to 4.1 in 2007-2009.

2.2 Please provide information on relevant studies or statistical findings (current or from the past) on what effect a change in wages (increase, freeze or cut) has on the working conditions in the country or their outcome (job security, well-being at work and job satisfaction).

No studies or statistical data, which would demonstrate directly the effect of change in wages on working conditions.

2.3 Please provide information on relevant studies or statistical findings showing a trade-off effect between wages and other working conditions in the crisis. Possible other working conditions are other forms of rewards, job security, working time revisions, changes in work organisation, and training opportunities.

No studies or statistical data.

2.4 Complementary to question 2.3, we have included in annex data of the EWCS 2010 for your country that compare access to training, feelings of job security and changes in working time for employees that have been experiencing a wage decrease, increase or no change in the year prior to the survey. These data are indicative for possible trade-off effects. Could you please have a brief look to these data and comment?

The presented data on Polish employees may indicate the lack of trade-off. With regard to access to training, feelings of job security and changes in working time we see no relation between improved working conditions and decreased or frozen pay. There are no significant differences between employees with different working conditions or a change in their wages.

Block 3: Relevant policy practices

3.1 Please identify and describe 3 key company or sector examples where a trade-off has been realised between wages and other features of the employment contractual arrangements during the crisis.

  • Wage freeze in public administration in 2011 and 2012.

The government Budget for 2011 provided for freezing wages of public administration employees (except teachers). Furthermore the Budget for 2011 provided for freezing the wages of senior officers in public institutions. The Budget for 2012 also froze wages in public administration with the exception of teachers, the police and the army. The Supplementary Budget Law of 22 December 2012 also provides for freezing contributions to the company’s social fund (the fund from which the employer subsidises vacations or grants financial support to employees).

Trade unions engaged in the Tripartite commission, which are Ogólnopolskie Porozumienie Związków Zawodowych (The All-Poland Alliance of Trade Unions, OPZZ), Niezależny Samorządny Związek Zawodowy “Solidarność” (The Independent and Self-Governing Trade Union Solidarność, NSZZ Solidarność) and Forum Związków Zawodowych (The Trade Unions Forum, FZZ) have been against wage freezes. The unions also believe that by setting this mechanism the government infringed on the principles of social dialogue. Trade unions underline that wage freeze means a decrease of real wages. Several occupational groups have undertaken protest actions. For instance the judges lodged a complaint with the Constitutional Tribunal in December 2011, the same month the firemen organised a nationwide protest.

Similarly, many local governments froze wages in 2009 - 2011 (in 2012 local governments are going to implement this mechanism as well). Many Polish ‘gminas’ have lower incomes and they prefer to invest their limited means. More and more ‘gminas’ struggle with debts.

  • Wage freeze in Bank Zachodni WBK.

In 2009 Bank Zachodni WBK decided to freeze wages in exchange for job guarantees. We do not know, however, (as the news of it only appeared in a few press articles) whether the implemented solution came as a result of a collective labour agreement.

  • Wage freeze in extractive industry.

In 2009, few companies from the extractive sector negotiated wages freeze with the trade unions. Grupa LOTOS (oil and gas extraction company) implemented an anti-crisis package, which was negotiated with trade unions, who claimed job guarantees in exchange for wage freeze. The plan was also to hold the payment of bonuses and freeze hiring.

In 2009 wage freeze in exchange for job guarantees was also announced by coalmining companies, Jastrzębska Spółka Węglowa and Katowicki Holding Węglowy. But in these two entities, the implemented solutions had not been negotiated with the unions, which consequently protested against them.

3.2 Please identify policies recently put in place to support vulnerable groups of workers who have been possibly most affected by the recent wage trends. Priority should be given to policies and measures put in place to support low-wage workers, working poor and women. Additional attention could be paid to young workers, elderly workers and migrant workers.

  • Public debate on the minimum wage.

The national minimum wage in Poland is set annually by the Tripartite Commission for Social and Economic Affairs (Trójstronna Komisja ds. Społeczno Gospodarczych) in accordance with the Minimum Wage Act of 2002.

The agreed minimum wage cannot be lower than the already existing one and must be adjusted to the following year’s forecast Consumer Price Index (CPI).

In the years 2003-2009 the amount of minimum wage was agreed by the Tripartite Commission, which raised it every year. In 2010 and 2011 the government took a unilateral decision, without the consent of social partners, with regard to the minimum wage, because social partners set a higher rate than was proposed by the government side. NSZZ “Solidarność” suggested that the minimum wage should amount to 50% of the national average salary. The minimum wage is currently 41% of the national average salary and for 2012 it has been set at 1,500 PLN (336 EUR).

Trade unions have been disappointed by the unilateral decision of the government. In 2010 Solidarity began a debate on amending the Minimum Wage Act of 2002. They aimed to come up with an independent draft legislation, which would set the minimum wage permanently at 50% of the national average. In the spring of 2011 Solidarity established the Civic Legislative Initiative Committee for Amending the Minimum Wage Act and transferred the draft legislation to the parliament (the draft had been signed by 350,000 citizens). Since the general elections in autumn the work on that bill has not been restarted and we don’t know if and when the new parliament shall continue working on it (PL1110019I).

  • The Act on Alleviation of Economic Crisis Effects on Employees and Employers.

In July 2009, the Polish parliament adopted an anti-crisis legislative package, which was in force until 31 December 2011 (it has not been evaluated yet).

- The package gave employers more freedom to enter any number of fixed-term employment agreements with one employee (before that the employer could only issue two consecutive fixed-term employment agreements, the third one had to be for indefinite period of time.)

- It also gave employers the possibility to prolong working time calculation period (up to12 months). This solution allowed employers to manage working time more flexibly.

- The amended Personal Income Tax Act allows for tax exemptions on allowances paid by trade unions and on company benefits in the form of vouchers for goods or services.

- The Act additionally allowed employers to obtain subsidies for training and employees’ post-graduate studies from Labour Fund (Fundusz Pracy). The act also includes provision for partially covering wage costs of employees whose working time has been reduced or who are temporarily off work due to a halt of operations (subsidies from the Guaranteed Employee Benefits Fund - Fundusz Gwarantowanych Świadczeń Pracowniczych).

The package received considerable criticism. Trade unions accused it of curbing employee rights, as it repealed a significant part of Labour Code provisions – especially with regard to fixed-term employment agreements, which in the unions’ opinion diminished security of employment. There where however experts who claimed the terms of using the anti-crisis package set the bar too high for employers (PL0909019I).

Commentary by the NC

In general, a full and thorough analysis of the evolution of wages during the crisis in Poland is significantly impaired by unavailability of data or detailed studies. Poland has not experienced crisis and recession to such extent as many other countries in Europe. Many indicators, like for instance, the GDP, or the national average salary, increased during the period in question. In all five studied sectors there was also a visible increase of the nominal average monthly gross salary. At the same time it needs to be emphasised that the difference between the average monthly gross salary among 10% (D1) of the lowest earning employees and 10% (D9) of the best earning was on the rise.

In Poland collective agreements on sectoral level do not play an important role. If they are made, it is at the company level and they are often treated as confidential. Poland also sees limited trade-off on wage for improvements in other working conditions. Bilateral bargaining most often regards job guarantees (instead of working conditions, for example) in exchange for wage freezes. However in case of a few companies and public administration wage freeze had not been agreed with the unions, which often led to protests.

In Poland we can also observe minimal interest in developing and implementing tools that aim at supporting employees threatened by financial effects of the crisis. These policies are practically limited to fixing the minimum wage.

Marta Trawinska, Institute of Public Affairs

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