Poland’s govt to propose hiking minimum wage by 5.7% to PLN 2,220

Many respondents in CEE countries believe that the introduction of the euro will raise prices (Sofia Ladies' Market, Kevin Walsh/CC BY)

Poland’s Law and Justice (PiS) government has proposed to raise the minimum wage by 5.7% to PLN 2,220, Deputy Labour and Social Policy Minister Stanislaw Szwed was cited telling the state news agency PAP on Thurs. The minimum hourly wage will be raised by 5.8% to PLN 14.50. The government’s proposal go to the Social Dialogue Council (RDS), where employers, unions and the government negotiate a final level. If no deal is reached, the government’s proposal wins out.

The government was reported to have clashed over the level to set, according to the daily Gazeta Wyborcza, which tends to criticise the government. The Labour and Social Policy Ministry wanted to increase the minimum wage to PLN 2,250 and to PLN 14.70 an hour, which would have given growth rates of 7.1% and 7.3%, respectively. But PM Mateusz Morawiecki was said to have said “nie.” Legal measures say that the minimum increase considering economic growth and inflation would be to PLN 2,216.17.

The Solidarity union is unlikely to agree to the government’s proposal. It reportedly wants a minimum wage of PLN 2,278, which would mark an 8.5% rise from 2018. The OPZZ and FZZ unions want an even higher minimum wage that totals at least PLN 2,383 (which would mark a 13.5% increase), so that the minimum wage hits 50% of the average wage (it’s now at 47.3%). Employers want the minimum increase.

Overall, the minimum wage has increased quickly in recent years, the move coming in part due to the ruling Law and Justice’s (PiS) social spending views and in response to labour market tightening. The minimum wage proposed for 2019 would be some 27% higher than the 2015 level. Unions complain that the minimum wage is low in Poland, but this is not the case. In terms of OECD data for 2016, the minimum wage in relation to the average (mean) was 43%, which is much higher than in Hungary (39%), the Czech Republic (34%), and Slovakia (39%). In Germany, the level is 42%. Moreover, to the median average wage, the minimum was already at 54% in 2016. The minimum wage has been upped by 14% since then and so will be even higher. In PPP terms, the minimum wage remains low in Poland, but it is march higher.

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