Polish wages still playing catch-up with EU: report

It will take Polish earnings 50 years to catch up with the EU average, according to consultants Grant Thornton, but the tempo of wages growth suggests the gap will be closed faster.

While the prospect of waiting until 2069 for parity may make gloomy reading for the Polish workforce, domestic wage growth over the past three years has averaged 4.66 percent, compared to 2.58 percent in the EU as a whole.

However, since last year’s report, the pace of growth has picked up significantly. Back then, based on earnings from 2015-2017, Grant Thornton had suggested that it would take Poland 59 years to catch up with the EU.

According to Eurostat data, the average monthly salary in the EU in 2018 was around EUR 3,080, while at the end of 2018 the average Polish salary was EUR 1,234.

Had wage growth kept up with GDP growth this century, Polish salaries would have grown by 93 percent since 2000, when in fact they have only grown by 68 percent, according to the report. Back at the turn of the millennium local salaries were under a quarter of the EU average.

As we pointed out last year, the Grant Thornton methodology gives slightly pessimistic outcomes at the moment. Last year, they took into account a period of two years when wage growth was almost stagnant - 2015 and 2016, when Poland was still experiencing a spate of deflation.

We correctly predicted that the figures calculated for 2016-2018 would be rosier and we suggest that next year, when 2019 is taken into account, where wage growth has been around 6-7 percent, Grant Thornton’s figures will show an event greater catch-up.

It is anyone’s guess how things will pan out, but with the minimum wage being increased by 15 percent from 2020, the Polish figures next year may be rosier still. After that, much will depend on the state of the economy and whether it will be feasible to continue to increase the statutory minimum wage by 15 percent per annum for the next four years, as was promised back in August.