Key corporate salaries indicator up 16 pct to PLN 4,100: stats office

Median corporate wages rose 16 percent to just under PLN 4,100 (EUR 950), measured in a new biannual survey by Statistics Poland.

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While average wages in October 2019 were reported on Thursday to have risen to by 5.9 percent to PLN 5,213 (EUR 1,214), it is median wages which give a better picture of who earns what.

If the average earnings at a company are EUR 10,000 per month that sounds like a high and healthy number. If we look closer at that figure we might find out that the factory manager earns EUR 40,000 a month and the cleaner earns EUR 500, and everyone in between earns EUR 1,000. And so the average wages do not give a clear picture of the wages either in a company or in the economy as a whole.

This is why economists put more emphasis on median wages, which is the midpoint on the graph of all the salaries in the country.

The median gross wage rose to 4,094 PLN (EUR 950) compared to average wages that month which were at the level of PLN 5,003 (EUR 1,214). The report concentrates on larger employers and so does not focus on either the self-employed or those working in smaller companies which employ fewer than nine people. Nor does it include share income.

Nevertheless, the picture of earnings we receive is quite elucidating. The lowest paid 10 percent of workers earn PLN 2,224 ( EUR 520) or less, which means fewer than 10 percent of employees receive the minimum wage of 2,150 (EUR 500). Meanwhile the top ten percent of employees earn PLN 8,239 (EUR 1,920) or more.

Only 6.1 percent of employees received more than PLN 10,000 (EUR 2,330), or twice the national average in October 2018.

While 66 percent of all workers earned less than the national average at that point in October 2018.

Comment:

Minimum wages are due to rise by 15 percent in 2020 and the government’s manifesto plan is to continue raising that bar by 15 percent per annum until 2024 up to the level of PLN 4,000 (EUR 930). That would suggest that the next reading of median wages in 2020 that we will receive in 2021 will also be higher. Wage inflation is only sustainable in the long term without causing inflation if growth is high and productivity gains are higher, which will need greater investment.

It remains to be seen what happens to the structure of wages over that time. Will it be flatter, with more people receiving the minimum? Or will people a little bit higher up in the pecking order also demand a raise? Another issue is whether wages at the top of the scale will continue to grow faster than the average, as has been the global tendency.

At the same time, Poland’s wages in 2018 were only at the level of 68 percent of the EU average, and so the country will still be able to compete on wages for a while to come.


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