How well is Poland really doing?
Warsaw, Poland April 27, 2006 The latest economic statistics released by the Polish government can lead one to believe that the Polish economy is in good shape. But those numbers may be misleading. If one takes the numbers in the context of the overall situation of Poland a different picture may be seen.
The first number shows that the Polish economy grew at the rate of 4.2% for the final quarter of the year 2005. The driving force behind this was Polish exports.
The second number touts a decrease in the unemployment rate by .2% so that the current unemployment rate is now 17.8%. And it is reported that the unemployment offices in Poland are reporting large numbers of new offers for jobs.
But there are some other numbers and facts behind this that are very troubling.
The government unemployment offices report that few people are actually seeking employment. So even though the number of job offers is increasing the number of people looking for work is not.
And even though there was a decrease in the unemployment rate it by .2% area, the unemployment rate decrease during the year 2005 for the same period was 1.4%. So and it appears that as the seasonal employment rate should be increasing, it has apparently not done so.
As for the 17.8% of the people are on the unemployment rolls 86 percent of them no longer get unemployment benefits. And they are not applying for jobs. They either do not want to work or they are generating income in some fashion that is not being reported to the government.
While this is going on the exodus of the young and talented people to the West continues. There is a huge demand in the West for construction workers and Polish construction workers are heading west to enjoy the benefits of the higher pay that they make their. And since there are few real job opportunities for young people, they head west to see what they can find.
The government reports that there has been an increase in the average pay to those people who are working. One would expect in that if it is difficult to find workers that one must raise level of compensation to attract people. So the increase in the average pay may be an indication of a labor shortage. That is too early to call definitively because there is not enough data on which to base that call. The figures for the next month should give some indication as to whether this call is correct or not.
As the Polish workers head to the West the Western economies are benefiting. A recent report from the United Kingdom shows that the English economy benefits hugely from the efforts of the Polish workers. Their gain is Poland's loss.
It is estimated that there are about 300,000 people from Eastern Europe in the United Kingdom with a large percentage of those people being from Poland. These other people are the true measure of the Polish economy. They have found that the work conditions in their own country are not good and they have voted with their feet. They have simply given up and left the country.
As other labor markets open to the Polish worker, Poland may see that the people who are left to work are those who do not want to work.
Rather than patting itself on the back the Polish government should be looking on in the numbers and seeing what it can do to make it beneficial for companies in Poland to make it more attractive for people to work. At it should be looking at what it can do to discourage people from not working.
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