Unemployment in 2002 examined

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The unemployment rate in Poland rose to 18.1% in 2002, with over 3.2 million people registered as jobless and long-term unemployment rising rapidly. Unemployment is becoming a major and widespread problem, no longer confined to specific industries or regions (though significant geographical differences persist). This article examines the situation in 2002 in detail, and looks at the measures being used in the fight against unemployment.

Unemployment in Poland continued to rise in 2002, as it had done since 1999 (PL0210110F). The number of people in gainful employment stood at 14.9 million at the end of the year – 0.9% less than at the end of 2001 – and the number of unemployed people registered with labour offices (urzędy pracy) increased to 3,216,958, almost 102,000 more than the year before. As of late 2002, the unemployment rate, calculated on the basis of registered unemployment, stood at 18.1% - a rise of 0.6 percentage points since one year previously. The unemployment rate calculated on the basis of the Survey of Economic Activity of the Population was 1.6 points higher at 19.7%. The unemployment rate in Poland has thus reached a level 2.5 times larger than the European Union average.

Geographical differences

A strong differentiation continues to be observed in the unemployment rates for various parts of Poland, with the highest unemployment rate for a single region standing at more than twice the figure of the lowest. The highest unemployment rate at the end of 2002 was in the northern region of Warmia-Mazury, at almost 30%, while the lowest was in the central region of Mazowsze, at 13.9% (this was still an increase of almost 1 percentage point since the end of 2001). During 2002, unemployment increased in 11 regions out of the total of 16. The greatest increases were recorded in those regions which encompass large urban centres and industrial areas, notably Mazowsze (where the number of unemployed people increased by 22,700) and of Silesia (up 16,700).

Marked differences also persist between the unemployment levels in urban and rural areas. Experts point out that unemployment in rural areas is intrinsically different from that affecting urban areas, in that rural unemployment tends to be of a more permanent character, and the labour market in small municipalities and villages is significantly less open to change. In late 2002, residents of rural areas accounted for almost 42% of registered unemployment. Compared with 2001, the number of unemployed people resident in the countryside rose by more than 12,000 (or 0.9%).

It should nonetheless be noted that the economic reforms running their course in Poland over recent years have principally affected residents of the cities. As of 2002, urban dwellers accounted for 58% of registered unemployment. Compared with 2001, the number of unemployed people living in cities rose by over 89,000 (or 5%), with the increase primarily affecting male workers. This more rapid increase of unemployment in the cities results from the privatisation and restructuring of business enterprises which, for the most part, operate in urbanised areas.

Structure of unemployment

Negative labour market developments mean than persistently high unemployment affects particular groups, as follows:

  • in 2002, over 895,000 young people in the 18-24 age group were unemployed. However this was a fall of 2.4% compared with 2001, and the proportion of total unemployment made up by young people dropped to 28%;
  • some 167,000 school-leavers were seeking paid employment through the intermediation of the state labour offices in 2002. However, unemployment fell in this group by more than among young people generally, decreasing by almost 8% compared with 2001. It is worth noting that, between June and December of 2002, the government's First Job (Pierwsza praca) programme (PL0212107F) was extended to more than 100,000 school leavers – 29% of those leaving education in that period;
  • women continue to predominate among the unemployed. At the end of 2002, more than 1.6 million women were registered as unemployed and they made up more than 51% of all unemployment - though this was 1.5 percentage points less than in late 2001. Over 2002, the number of unemployed women remained almost static compared with 2001 (up only 0.2%), while unemployment among men increased by almost 7%;
  • some 2.4 million people with lower vocational skills and unskilled workers (those educated to secondary school level, graduates of vocational schools and people with incomplete secondary education) were unemployed in 2002, accounting for 74.8% of registered unemployment. Members of this category of unemployed people encounter the greatest difficulties in finding jobs. Holders of university degrees accounted for approximately 4% of all the unemployed, and persons with post-secondary and secondary vocational education more than 21%; and
  • in terms of their vocational specialisation, at the end of 2002, the most common vocations of unemployed people were retail salespeople and fitters/metalworkers.

An increasingly pressing social problem is long-term unemployment lasting 12 months or more. In 2002, this group swelled considerably in relation to previous years. In late 2002, there were more than 1.6 million long-term unemployed people, an increase of almost 140,000 since late 2001. Long-term unemployment was thus increasing at a rate three times greater than unemployment as a whole. People without gainful employment for more than 12 months accounted for 51% of registered unemployment, a proportion which had increased by almost 3 percentage points since the end of 2001. Furthermore, the number of unemployed people without jobs for more than 24 month rose in 2002 by almost 146,000 (up 17%), while the number of people without jobs for between 12 and 24 months fell by 6,000 (down 1%).

These changes in the structure of unemployment, and especially the increase in long-term unemployment, have had a major impact on the number of people claiming unemployment benefits (PL0210107F). Since 2000, there has been a sustained decrease in the proportion of unemployed people entitled to unemployment benefits. At the end of 2000, this proportion stood at 20.3%, at the end of 2001 at 20%, and by the end of 2002 it had fallen to 16.7%.

Fighting unemployment

The institution in the 'front line' of the fight against unemployment is the network of state labour offices. One of the few positive developments observed in the labour market in 2002 was the fact that the number of job vacancies registered with the state labour offices increased. This increase was fuelled primarily by the public sector, which registered more than 122,000 vacancies (48% more than in the previous year). The private sector registered 433,000 vacancies (13% more than in 2001). This general increase in the number of job vacancies for unemployed people in 2002 was coupled with a sharp increase in the number of vacancies for school-leavers. In 2002, there were over 62,000 more vacancies for this group than was the case in 2001, an increase of 139.4%. The launch of the 'First Job' programme has made an unquestionable contribution to improving the lot of recent school-leavers.

In 2002, almost 1.2 million people started work in new jobs, over 178,000 more than in 2001. Many of these people – more than 1 million, or almost 90% of those finding new jobs through state labour offices – took up work in the non-subsidised sector. Subsidised work, meanwhile, was taken up by almost 119,000 people.

The number of unemployed people participating in various active labour market policy schemes rose notably in 2002 in comparison with 2001. In 2002, 'public intervention' jobs were taken up by 51,000 people (30% more than in 2001), while 'public works' jobs were taken up by over 33,000 unemployed people (16% more than in 2001). There was also an increase in unemployed people taking up seasonal jobs, whose number rose to 149,000 (almost 28% more than in 2001).

It would appear that the popularity of various vocational training courses and of vocational counselling is on the increase. In 2002, more than 68,000 unemployed people embarked on training, 44% more than in 2001. Having completed their courses, more than 20,000 of these people commenced work. The effectiveness of the training itself depended on its subject. More than 50% of participants found jobs after completing courses in occupational health and safety and in tourist services. On the other end of the effectiveness scale, only 16% of participants found jobs after completing courses in computer operation, 22% after courses in economics, and 22% after courses in commerce.

More than 271,000 unemployed people took advantage of vocational counselling in 2002, accounting for more than 90% of vocational counselling services’ beneficiaries. The use of such services increased by more than 41% in 2002 compared with 2001. When asked about their motivation for resorting to vocational counselling, 55% of participants referred to a wish to take up a job of some description, 21.6% referred to improving their vocational skills, and more than 10% cited their choice of vocation.

In 2002, the Ministry of the Economy, Labour, and Social Policy (Ministerstwo Gospodarki, Pracy i Polityki Społecznej, MGPiPS) started to implement 238 special programmes funded by the Labour Fund (Fundusz Pracy) (PL0212106F), their main objective being the 'vocational activation' of people belonging to risk groups in local job markets. This represented an increase of 132 newly launched programmes in comparison with the preceding year. The programmes extended to just over 3,000 unemployed people (over 50% more beneficiaries than in 2001). Of these, almost a third were women, almost a half were long-term unemployed, and more than a half were residents of rural areas. A significant proportion of the programmes’ beneficiaries was also accounted for by people aged up to 24, school-leavers and people not holding any formal vocational qualifications.

Commentary

Rapidly increasing unemployment in Poland reflects the difficult social and economic situation in the country brought about, among other factors, by: the growing pool of labour; stagnant economic growth; the expiry of the provisions of privatisation contracts (PL0209103F) which guaranteed unchanged employment levels and/or extended other guarantees to workforces of the entities concerned; and the lingering effects of administrative reform.

Unemployment in Poland is no longer a problem confined to specific industries or regions; it is assuming a universal aspect. Recent research indicates that more than 53% of all Poles are afraid that they may lose their jobs, and almost 80% maintain that, were this to happen, they would encounter significant difficulty in finding a new one. The present government appreciates the gravity of the problem, and it is attempting to alleviate the impact of unemployment by way of various programmes for the activation of unemployed people (such as the 'First Job' programme for young people). Yet such programmes can produce little effect on their own. A large-scale revitalisation of the economy is much needed; until this comes about, even the best measures for counteracting unemployment can aspire to a limited effect at most. Furthermore, the vocational activation programmes are suffering from an endemic shortage of public funding. The social partners are currently seeking some solution to these problems in tripartite talks (PL0307104F) but the effects of these efforts will require time. Government officials charged with employment policy take the position that the growth in unemployment should come to an end in 2003, and that unemployment will start declining as of 2005. These forecasts are interrelated with those concerning economic growth which, it is hoped, will reach 6% in 2005. (Rafał Towalski, Institute of Public Affairs [Instytut Spraw Publicznych, ISP] and Warsaw School of Economics [Szkoła Główna Handlowa, SGH])

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