When earnings rise faster than prices...

 ...consistently – over many years – the nation is happy.

Yesterday, Statistics Poland (GUS) announced that the gross average monthly wage in the corporate sector in December was 9,583 złotys (£1,980), a year-on-year increase of 8.6%. Average monthly earnings in the UK are currently £3,211, having risen by 4.7% over 2024. However, inflation in Poland currently stands at 2.4%, whilst in the UK it is 3.6%. So – taking price rises into account, over the course of 2025, Polish real wages have increased by 6.2%, in the UK by a mere 1.1%.

But 2025 was not an outlier – this same story has been repeating (with a few exceptional years) ever since 2005. Polish wage growth has, over the past two decades, massively outstripped price increases. Prices have nearly doubled... but wages have nearly quadrupled. Yet over those same 20 years, average earnings in the UK have barely managed to stay ahead of inflation. 

A similar story can be told in the US. Whereas cumulative inflation over the past two decades has been lower than in either Poland or the UK, wage growth has been muted.

Below: graph comparing average earnings vs. CPI inflation from 2005 to 2025, Poland, UK and US. The base year, 2005 = 100%. Solid lines: average earnings, broken lines: consumer price index; red = Poland, green = UK, blue = US. Polish wages are for corporate sector, so don't include public-sector employees or businesses employing fewer than ten people.

Yes, Poland's much-praised economic miracle has many left-behinds, but there's an indefinable something in Polish social cohesion that foreign commentators overlook. Whilst the US and UK have seen relatively stable but high inequality, Poland has undergone a significant transformation, moving from one of the most unequal EU members in 2005 to one of the most equal by 2025. The Gini coefficient of income inequality measures the distribution of money coming into households (wages, pensions, and benefits) after taxes. The Gini scale runs from 100, where all income goes to one person, to 0, where all income is divided equally. Poland in 2005 was 35.6 and is currently 26.2 – a significant decrease in income inequality. Over the same time, the UK has seen a much smaller decrease, from 34.7 to 33.1, whilst the US has seen an increase, from 41.0 to 41.5. [Source: Our World in Data]

The other side of the coin is labour productivity. If workers get paid more and more while producing the same amount of goods or services, inflation rises. But here, Poland has been doing well. Since joining the EU, its growth in productivity has been one of the fastest in the bloc. Averaging around 4.5% a year, it has been keeping pace with growth in real earnings. And money earnt gets spent; cafés, bars, restaurants are doing good business as disposable income is funneled back into the economy boosting growth. In 2025, Poland's labour productivity grew faster than any other EU member state.

And now my controversial assertion: Polish employers are less stingy than British or American ones because they are cut from the same cloth as the employees. There's far less of a class barrier between bosses and workers. Yes, Polish bosses are doing well, but many are also the children or grandchildren of peasant farmers or factory workers. Wealth accumulated across multiple generations brings with it a sense of entitlement and 'us-and-themism'. And the idea of "screwing the workers to earn me another million or ten is something" that Poland's boss class feels less comfortable with than in countries where the rich are historically detached from the travails of the masses by many generations. 

As long as wages grow faster than prices, then all will be well. Important caveat, however – labour productivity must grow faster than both! And faster than in competing economies! Poland's productivity growth in recent years has been among the fastest in the EU (albeit from low levels). May it stay that way...

Before the moaners and carpers start to chip in: Polish pay data is average for the private sector (the public sector pays less) and there are big regional differences (10,500 zł in Warsaw vs. 6,500 zł in eastern Poland). The UK also has those regional differences, but the British public sector has seen much higher salary increases over the past year and half than has Poland's.

Sources

Poland: Główny Urząd Statystyczny (GUS) index uses the annual average price indices of consumer goods and services. GUS Price Indices. Average Earnings (GUS) data is based on the Average Monthly Gross Wage and Salary in the national economy GUS Wages and Salaries Data.

UK: Office for National Statistics (ONS) Consumer Prices Index series, the UK's headline inflation measure. 

ONS Inflation and Price Indices. 

Average Earnings (ONS) uses the series for total pay including bonuses. ONS Average Weekly Earnings in Great Britain.

US: Consumer Price Index is from the Bureau of Labor Statistics (BLS); the CPI-U (All Urban Consumers) series, the most widely used measure of inflation. BLS Consumer Price Index Data. Average earnings data from the Social Security Administration and BLS. The index uses the National Average Wage Index and BLS Current Employment Statistics. Social Security National Average Wage Index.

National data cross-checked with the OECD database which gives harmonised CPI and hourly earnings data across all three nations, used to ensure the indexing methodology (re-basing to 2005 = 100) remained consistent across different currency and reporting standards: OECD Data Portal.

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