Sunday, September 01, 2019

Poland's "Lack" of Workers

Polish employers are feeling the labour pinch, as unemployment in Poland dips to its lowest levels since 1991, reaching 5.2 percent in July.

In a recent survey by Polish human-resources firm Work Services SA, 49 percent of companies said they had trouble finding employees during the past few months. The shortage of workers is also impacting wage growth, which accelerated to 7.4 percent year-on-year in July.

PwC estimates the shortfall to reach 1.5 million workers by 2025. Other Central European economies are also feeling the dearth of workers, as populations shrink due to tumbling birth rates and high emigration.
Unemployment is below four percent in Poland, the Czech Republic and Hungary, and at 5.4 percent in Slovakia, according to Eurostat.
In past years, the Polish economy has been propped up by migrants. About 1.5 million Ukrainians have stood in for the 1.7 million Poles who went westward since Warsaw joined the EU in 2004. According to recruitment company Personnel Service, more than one-fifth of Polish companies now employ Ukrainian workers. Ukrainians make up 75 percent of the 600,000 foreigners paying contributions to Poland's social security office - 25 times more than a decade ago.
Kazimierz Czesny, director at furniture company Wersal Meble, said that 400 of his 1,000 employees came from Ukraine. He told Al Jazeera that they opt for Ukrainians due to the similarities between the Polish and Ukrainian languages and because "the culture is the same".
But the Ukrainian migrant worker population is set to change as Germany plans on opening its market to non-EU workers in 2020. Poland's central bank warns that the number of Ukrainian workers in Poland could fall by 20 to 25 percent by 2024. To make up for the labour shortfall, Polish businesses have started to cast their nets wider and hire South Asian workers. Last year, almost 20,000 Nepalese, 8,000 Bangladeshis and 8,000 Indians received Polish work permits. There is a simplified procedure for seasonal workers coming for a maximum of six months from Russia, Belarus, Ukraine, Georgia, Armenia and Moldova. But people from other nations face a more stringent process, making hiring time-consuming and less predictable.
Michal Solecki at WORKSOL, another recruitment firm, said employers are turning to new destinations.
"Vietnam, Philippines, Oceania, Indonesia - these are where we are looking now," said Solecki. "Workers are also coming from South America, from Colombia, from Venezuela."
Some Polish companies are trying to access untapped local reserves. As early as 2010, furniture company Gabi Meble opened a factory next to Czarne prison in northwest Poland, employing some 100 inmates. Amica, a household appliance manufacturer, struck a deal last year with the local prison to employ up to 200 inmates at its new factory.
Industry figures in low-margin sectors such as construction and retail are increasingly vocal about being pushed underwater. Labour market tightening would generally be expected to slow, as the country approaches its so-called natural rate of unemployment, in which there is sustainable equilibrium.

The ruling Law and Justice party is struggling to square its notoriously anti-migrant rhetoric with the booming economy's reliance on foreign labour. Last September, Pawel Chorazy - then the deputy minister for development - was fired after a public admission that migrants are key to Poland's prosperity.

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