Friday, 24 February 2017

Our postman and the Polish labour market - today and tomorrow

Here in Jeziorki, part of the district of Ursynów, on the southern edge of Warsaw, the postman has not delivered any post since Friday 10 February. There's no strike; there's simply not the staff. I'm now three Economists behind with my reading, and there are bills in that mail sack that need paying, except I can't pay them because I don't know how much they'll be for.

It turns out that Pan Krzysztof's on holiday - it's good to know that a postman in Warsaw earns enough for a skiing vacation - a sign that Poland's becoming a normal economy. But can Poczta Polska not provide cover for him?

The simple answer is of course - staff. There are too many jobs chasing too few people in Poland's big cities. According to official data released yesterday, unemployment in Warsaw at the end of January was 2.8%. That's the claimant rate. Now, there is a disparity between claimant rate and economic inactivity rate (which is how Eurostat measures unemployment); nationally, the claimant rate is 8.6%, but the economically inactive rate is only 6.0%. This suggests that around one-third of Poles registered as 'unemployed' are actually working, typically cash-in-hand, in the grey economy. Now, if this were the case in Warsaw as it is nationally, the capital's registered unemployed who are economically inactive would fall to 1.9%.

By any measure, this is what's called 'frictional unemployment' - people signing on between jobs. And while some groups have difficulty in finding work, the young and inexperienced and those in pre-retirement age, paid employment has never been easier to find in Warsaw. And for employers, the corollary is true - recruiting and retaining staff has never been more difficult.

Talking to employers and HR managers, I hear that this is a huge problem in Poland's larger cities. Wrocław and Katowice have the same rate of registered unemployed as Warsaw, while Poznań's is even lower at 2.0%. Many firms are recruiting Ukrainian citizens. I heard last week that over 1.2 million Ukrainians have registered with Polish authorities for work; an order of magnitude similar to that of Poles working in the UK.

Sectors such as logistics, retailing, hospitality, agriculture and IT are increasingly reliant on workers from Ukraine. I was amazed to see at W-wa Zachodnia station posters in Ukrainian offering jobs at McDonald's; less surprising were the posters in Ukrainian on bus stops in the Grójec-Tarczyn region offering seasonal fruit-picking work.

While McDonald's, fruit farmers, warehouses and IT companies can take on Ukrainian citizens, it's a lot more difficult for the Polish state to hire them, not least from the political and PR point of view.

I'm sure that if the Economist's distributor here in Poland were to change their delivery provider from Poczta Polska to any one of a number of reputable private-sector companies, I'd be getting my weekly read within three days of publication - and not, as in this case, after nearly three weeks.

Having said that, 1) as a paper-and-digital subscriber to the Economist, I can read it all online anyway (I prefer paper, however), and 2) the fact that unemployment is low and wages are growing faster than inflation is a good thing, as it helps to even out inequality in Poland.

Poland's weak demographics (female fertility rate at 1.3 children is second-lowest in the EU) may be helped slightly by the 500+ programme, but the biggest change to the labour market in coming years and decades will be robots, algorithms and artificial taking away many routine and repetitive jobs.

The onus will then be on the state to ensure that the working-age population is equipped with the skills needed in such a labour market. Which in turn means Poland needs to revolutionise its education - including vocational education and its universities.

The writing is on the wall.

UPDATE 28 FEBRUARY - Still no post. 17 days since the last mail was delivered (11 working days)

UPDATE 2 MARCH - After 18 days with no delivery, the postman finally came. In his sack were no fewer than five PIT-11B tax forms, essential for our annual tax returns, which have to be filed by the end of next month. NO Economists. I'm now three, soon to be four, back copies late.

UPDATE 9 MARCH -25 days since my last Economist arrived, I find four in my mailbox (below), along with sundry correspondence from financial institutions, more PIT-11B tax forms, invoices etc.

I feel like Marwood in Withnail and I when Danny reveals he's intercepted all their post including cheques and an eviction notice.

This time last year:
What purpose does the Universe serve?

This two years ago:
Will your Soul last for eternity?

This time six years ago:
On the road to Węgrów

This time seven years ago
A week into Lent

This time eight years ago:
In the stillness of a winter forest

This time nine years ago:
Over the fence


Anonymous said...

"Poland's weak demographics (female fertility rate at 1.3 children is second-lowest in the EU) may be helped slightly by the 500+ programme,"

This has really hurt the labour market. Why work, if you can sit at home and get a government handout? As a business owner, not only do I have to pay higher wages due to the work shortage, I'm all supporting capable workers to sit at home and do nothing. I'd rather see that money go into daycare, and get these people into jobs.

Michael Dembinski said...

@ Anonymous,

Very much so - I've heard this from employers up and down Poland. I'd argue that bringing up baby is not exactly doing nothing, and if there is an uptick in Poland's falling birthrate, then good. However, were I in power, I'd have increased - massively - the lowest threshold for income tax, so that low earners can take home far more of their hard-earned pay than they do at present.

student SGH said...

Definitely, it is easy to find a job, any job, while for a professional finding a satisfying job might still be a challenge. Actually the trends you are pointing up are visible is a low-paid sector of the labour markets, while highly skilled professionals seem unaffected by recent developments. In the long term this tendecy might help reduce inequality which is generally good, despite the inevitable inflationary pressure we are bound to witness by the end of 2017.