‘We are currently in a similar place as was Ireland 30 years ago, but whether we will be able to benefit from globalisation to a similar extent as they did is uncertain’, says Maciej Bukowski, President of the Warsaw Institute for Economic Studies and a co-author of the Hausner plan.
Forbes: According to OECD statistics, the share of wages in Polish GDP dropped by 10 percentage points, i.e. to 46 pct over the last decade (from 2004 to 2014). It is lower than in most Member States. Are we not paid enough?
Maciej Bukowski: One of the factors that affects this state of affairs is an increase in self-employment and other non-standard forms of employment that occurred at that time. The self-employed, farmers and people employed under work contracts are not included in wage statistics. The second issue, which concerns not only Poland, but also other countries of Central and Eastern Europe, is that workplaces are poorly endowed in capital. As this good is relatively rare, it could be rewarded higher than in countries where there is a surplus of it. Moreover, Polish economy is in a constant transformation. Some industries, such as the machine industry, are developing significantly, while others – for instance mining and agriculture – are withering. Each of them is differently saturated with capital and has different wages. The miners are paid very well, yet they are far fewer than at the turn of the century. All this affects statistics on the level of wages. Therefore I would not draw the conclusion that the share of wages in our GDP is too low just on the basis of pure statistics.
Forbes: So we are adequately paid then?
Maciej Bukowski: Reaching even deeper into the past – at the start of the political changes, workers in Poland received wages that were too high in the light of the amount of goods produced. At the turn of the ’80s and ’90s it was called a ‘monetary overhang’. People had money, but the stores were empty. This overhang brought about a 2-digit or even a 3-digit hyperinflation, which remained that way throughout the whole of ’90s. We have enjoyed a single-digit growth rate in prices only for the last thirteen years. It was at this time that the strength of the Polish economy was revealed – industrial production doubled, productivity increased significantly and the level of employment rose. Since then, the wages are growing more or less in line with productivity, i.e. at the right pace from the economic point of view. Undoubtedly, nowadays we are paid suitably in relation to what we produce. We can make a comparison with the United States – the American workers are more efficient than the Polish ones and they are paid accordingly. The relative ratio between pay and performance, however, is the same in both countries. This ratio is not identical everywhere – some countries have low wages, which still exceed the average productivity. These countries are not competitive – we are.
Forbes: Nonetheless, perhaps the employers could pay us more?
Maciej Bukowski: Let’s take a look at what happened with the economy in the late ’90s and the first decade of the 21st century. The Russian financial crisis occurred, which resulted in Polish companies losing outlets and access to capital. A wave of restructuring swept across the economy, bringing about a sudden growth in unemployment – from less than 10 pct to almost 21 pct in March, 2003. It transpired primarily because the wages were too difficult to cut. The rapid restructuring of employment was for many companies the only way to stay in the market. For several consecutive years the productivity increased, yet the wages remained the same. This way we obtained the correct relation between performance and the level of wages on the eve of accession to the European Union.
