Foreign labour

The other morning I had an early start and took the 05:35 bus to town. After a few stops, the small bus was quite full, and I realised I was probably the only non-Ukrainian on board (other than the driver). I felt surrounded - by cheerful banter, lots of laughter, lots of energy. Soon, the bus stopped outside Centrum Onkologii in Ursynów. Half the passengers got ofp; I counted them - 16 in all, 13 women, three men. It was 05:50. People going to work for six am. Cleaners, cooks, porters - ancillary staff without whom Poland's premier cancer hospital would cease to function.

A pause for reflection. Over the following days I'd come across Ukrainians in large numbers - at W-wa Zachodnia (the interchange between the long-distance bus station and local railway services), on the Metro, by the coach station outside the Palace of Culture. Coming to Warsaw to find work, coming to a booming city that's short of labour and capable of absorbing any amount of immigrant labour actively seeking work. The cranes on the horizon, the asphalt being laid on newly built roads, the new co-working offices offering homes to start-ups, the busy lunchtime restaurants - this is the face of a confident economy firing on all cylinders.

More workers! We need more workers! And they come. And they move into unfurnished flats and need to buy furniture and TVs, and with their SIM cards in their smartphones, they buy on OLX and Allegro the old stuff that Poles, rapidly getting wealthier, no longer want or need, are selling online.

They look like Poles; given a few generations they will have integrated fully, the surname Polonised. They come because they know the work is here, and because the country is not at war - unlike their homeland. Poland is attracting exactly the right kind of immigrant it needs for its economy. Hard-working and culturally similar. Yesterday on the train I found myself seated next to a Ukrainian woman, who was chatting and joking away in Ukrainian on her phone; she finished the call and took another - this time from her Polish employer. She code-switched to flawless Polish "tak proszę Pani, będę proszę Pani."

As I have written here, Poland's demographics are dipping; the youth dependency ratio in coming decades will rise with ever-fewer people of working age paying for an ever-growing number of elderly pensioners. Without an steady inflow of migrant labour, the prospects for Polish society in the 2030s look grim.

The difference between registered unemployment in Poland and the number of people who really are economically inactive is significant. For the end of the second quarter of this year, Poland's statistical office GUS gave the number of registered unemployed as 961,000. And at the same time GUS gave the number of economically inactive as 617,000. This gives us the staggering insight that 343,000 Poles are simultaneously claiming benefits while being economically active. That's 35% of those registered as unemployed what are actually working cash-in-hand. If we conservatively use that 35%  as a measure and apply it against the current unemployment rate of Warsaw (1.7%) or Poznań (1.3%), we get a real figure nearer to 1.1% or 0.8% respectively. That's so low that taking economists' concept of frictional unemployment (time spent between jobs) into account, essentially no one who wants to work is without work in these cities. Desperate employers post job ads on the doors of their shops and bars. Recruitment and retention is their main concern. With an estimated 2 million Ukrainians working in Poland (up from 1.2m in April last year), the question is how long can Ukraine be counted on as a source of fresh labour for the Polish economy?

Poland is booming - but as I wrote here, we are at the top of the cycle and the only way is down - the only question is how sharp and how swift will the downturn be. I'm an optimist - we're three years from the next nadir here in Poland, and it won't be that deep. The forward momentum of several quarters of annualised growth around 5% will propel the Polish economy through the worst of what 2021-22 can throw at it. But then will come the next upturn - and Poland will only be able make the most of that upturn if its enterprises have the labour force needed to satisfy returning demand.

Right now, Poland's economy is in a sweet spot. The economy is booming, unemployment is at a record low and falling - this is the right time to accept and absorb migrants and integrate them into an increasingly wealthy society.

This time last year:
Searching.

This time two years ago:
Interstices: between Kłobucka and the tracks

This time four years ago:
In which I ride my Brompton to work

This time seven years ago:
Bike ride to Powsin as summer fades gloriously

This time eight years ago: 
Compositions in yellow, blue and white 

This time nine years ago: 
When the Z-9 used to run, temporarily, to Jeziorki