Poland needs a pay rise! That is the slogan of the ninth Congress of the ETUC’s largest Polish affiliate OPZZ (All Poland Alliance of Trade Unions), which takes place on 24-25 May.
The theme of the congress highlights the ETUC’s Europe-wide Pay Rise campaign, as well as reflecting OPZZ’s long record of fighting for fair wages in Poland. ETUC General Secretary Luca Visentini will be addressing delegates on the first day of congress.
One of the main strands of the OPZZ strategy for the next four years, to be adopted at the congress, will be a wage increase in Poland. Although in recent years some wage increases in Poland have reached the level of productivity, generally wages have not kept up with GDP growth. Long years of low wages have had a profound influence on the Polish labour market. As a result, some 4 million people – both highly-qualified experts and ordinary workers educated in Poland – have moved to Western Europe. This has generated labour shortages in the Polish labour market and an even more serious brain drain. To fill the gaps in the labour market, Polish employers have to rely on recruiting foreign workers from eastern neighbourhood countries like Ukraine, to work in Poland. However, due to persistent low wages the Polish labour market has become less attractive even for Ukrainian workers.
The OPZZ pay rise strategy declares:
Together for higher pay!
Good economic conditions and improved state finances create a situation/are the best moment to undertake a complex reform of the tax law and change state policy with regard to employment so that in the future everyone can benefit from the positive effects of economic growth. The issue of pay is intrinsically connected to the realisation of the Strategy for Sustainable Growth which defines the negative results of linking the competitiveness of the national economy with low labour costs and low pay. Undoubtedly, the state can implement instruments that will influence pay growth within the national economy as well as the decisions of businesses in that regard. At the same time, the state certainly underutilises these tools. This is in contrast to the fundamental assumption of the Strategy for Sustainable Growth which focuses on enabling Poland to leave the trap of median pay and supporting the growth of citizen wealth. Therefore, it should be the key aim of state policy in the near future to create conditions for pay growth, alongside reducing the overall inequality of earnings and the pay gap.
The higher dynamic of pay growth should be fully justified given that Poland is at the forefront of countries with lowest pay despite the fact that most businesses are profitable. The profit therefore should be more equally distributed. Statistical data show that the pay costs constitute only a small fraction of Gross Domestic Product, especially when compared with Western European countries. Pay across a number of sectors fails to reflect the increase in overall productivity. In addition, Poland has one of the lowest labour costs in Europe (in euro). As many as 66% of people in work earn below the level of median pay. To increase their take-home pay, Poles have to undertake additional employment and as a result we are at the forefront of countries with the longest working week.
The policy of restraining pay growth leads not only to a lack of highly qualified human capital but also to a low level of investment and innovation. The rules for calculating minimum pay still lack transparency. Service premiums and other bonuses should be excluded from minimum pay as this should be a one-component category and constitute basic pay.
OPZZ believes that it is necessary to undertake the following activities to promote employee pay growth:
- Establish a negotiation mechanism for pay growth within the business sector
- “Defreeze” pay within the public sector and establish a mechanism for pay growth that would be correlated to median pay
- Implement the actions detailed in the Anti-Crisis Package of 13 May 2009 where the government made a commitment to gradually increase minimum pay to 50% of median pay
- Ratify the International Labour Organisation convention no.131 related to minimum pay
- Ratify and appropriately implement article 4 act no. 1 of the European Social Charter where there is a commitment to guarantee that employees should receive pay rates that allow them a decent standard of living
- Revisit and readjust the level of lowest minimum pay which has remained unchanged since 2003 (760 PLN)
- Ensure that the pay gap between men and women is closed.
More analysis of wage developments in Poland can be found in the ETUI paper