Sunday, 8 December 2013

On being rich in Poland

An interesting article in the weekend edition of Gazeta Wyborcza, which appears in its entirety here on An article about Poland's wealthy - a small but rapidly growing segment of the population which offers good opportunities for manufacturers and exporters.

Based on a study by KPMG, the article begins by asserting - somewhat controversially - that to be considered 'well-off' or 'rich' in Poland, it is enough to be earning 85,000 złotys (£17,000) a year. The number of Poles who fall into this category is 786,000. Of a working population of 16 million. This is less than five percent*. However, the numbers of well-off or rich Poles are rising rapidly, and are expected to come up to the million mark by 2016, the report says. Growth of over 20% in three years. At the same time, the rich are expected to get richer, pulling up with them markets for exclusive luxury and premium products, which are also expected to grow by 20% from current levels by 2016, according to KPMG.

All good news for the economy; all that's needed now is some luxury Polish brands. At present, Polish brands are becoming established, though at upper middle-market levels. Krakowski Kredens in food or Vistula in menswear are two examples.

Warsaw has had its own luxury department store, the Likus brothers' Vitkac building on Al. Jerozolimskie for well over a year now; though I must say whenever I look in, the number of security staff and shop assistants outnumber actual shoppers by three to one. And there are not many window-shoppers either, gazing at the discrete arrangements of luxury goods on display. How unlike London's Harrods or Fortnum & Mason's, where shoppers are outnumbered ten to one by sightseers eager to pop in and buy the cheapest trinket so that they can parade around with a bag bearing the shop's logo. Maybe Poles still feel intimidated by such places, where no price tags are on display, where one has to ask how much something costs, fearing the answer will belittle you.

Still, despite the falling inequality in Poland (in part due to EU support for agriculture), the gap between the very rich and the average appears to be growing, partly due to the former's desire to flaunt it. The outcrop of luxury car dealerships in Warsaw is testimony to man's (and indeed woman's) innate need to distinguish oneself from the mass by the trappings of wealth. I have no great problem with the self-made entrepreneur or hard-working manager discretely showing off their wealth (except for Yanukovych-style black SUVs - sign of a lack of imagination and self-confidence) but I am irritated by displays of flauntism from the politicians - from Sławomir Nowak, recently ousted infrastructure minister or 'Agent Tomek' the PiS deputy or indeed Ryszard Kalisz - man of the Left with a love of fine voitures.

* This reminds me of a joke doing the rounds ten or so years ago. President George W. Bush is talking to President Kwaśniewski. Bush: "The average American family has monthly income of $3,000. Of that, $1,000 goes on accommodation and energy, $1,000 goes on food and clothing, and because this is a free country, we never ask how they spend the rest. Kwaśniewski replies: "The average Polish family has a monthly income of 3,000 złotys. Of that, 2,000 złotys goes on accommodation and energy, 2,000 złotys goes on food and clothing, and because this is a free country, we never ask how they earn the rest." Things have changed since then, not least that the tax system is far more watertight than it used to be. 

This time last year:
The link between health and happiness explored

This time two years ago:
The black SUV, the black SUV... (with the darkened rear windows)

This time three years ago:

This time six years ago:
Where I'm from, and why


student SGH said...

Read this article.

Have you taken the trouble to dig through the comment thread? Lots of valuable insights can be found there.

Calling somebody who earns 85,000 PLN a year (after bonuses, 13th salaries etc.) = on average 7,000 PLN per month = 5,000 PLN after tax is rich, or well-off, is a pure misnomer... I know it's 2 times national average and I realise such earnings allow for comfort of not thinking every month how to make ends meet, but but people who earn 5,000 after tax won't to to luxury department stores...

Michael Dembinski said...

Yes, I read comments - not all 152 - but enough to get a flavour.

My take on all this is as follows: KPMG have taken the population of Poles who fall into the top tax bracket as an arbitrary threshold, without noting that many Poles are self-employed entrepreneurs and pay a flat 19% tax. Indeed, as many of the commentators pointed out, the threshold of 85,000 złotys is laughably low, the number of people with such income laughably small.

Marcin said...

I earned more than that and couldn't afford the 2600PLN/month rent, food and generally low expense life in Warsaw.

If I wanted to drive the car I owner outright we were falling more and more in red....

Very funny, how "rich" I was :)

Neighbour said...

"...KPMG have taken the population of Poles who fall into the top tax bracket as an arbitrary threshold..."
My dog and I have three legs on average :-)
I work in RE consultancy business and after a few years know throughly the "behind-the-scenes" of such report.
The consultant writes a report, which is in part published openly, free of charge and sent to media.
Media workers (not journalists, this is a different category) take it and write their own stuff, based on uncritical absorption of the consultant's report. The more gleaming photos or brand names, the better, these catch the reader's eyes.
If you squeeze this like a sponge, not much is left as facts.

Best regards,