An urgent case for cost-cutting

High employment costs have always been a complaint of Polish entrepreneurs. Last week, the Polish Confederation of Private Employers (PKPP) Lewiatan, presented the main areas where the burden should be reduced. "We do appreciate the measures that the Ministry of Finance has been taking, but they are not enough," said Henryka Bochniarz, PKPP Lewiatan's president.

Among PKPP Lewiatan's suggestions are the reduction of pension fees from 13 to six percent, restrictions on early retirement, lowering health-insurance fees, and financing the labor fund from the state budget rather than employees' salaries. "We are aware that lowering labor costs is a huge expense for the budget," said Janusz Jankowiak, the chief economist of Polish Business Council. "That is why our postulates are balanced."

Experts estimate that a reduction of labor costs will lead to an annual net salary increase of as much as 10 percent. Entrepreneurs stress the increase is critical to prevent the workforce from migrating west. "Obviously, Polish salaries will not reach the level of those in the UK or France soon," said Jeremi Mordasewicz from PKPP Lewiatan. However, Mordasewicz reckons that thanks to reforms and the resulting 10-percent growth, they could double within the next seven years. The problem is all the more important in view of the impending demographic crisis. "We have five years to solve the issue and raise salaries," said Maciej Grelowski from the Business Centre Club.

Roman Rewald, Chairman of the American Chamber of Commerce, points out that high non-salary labor costs influence Poland's attractiveness to foreign investors. "Moreover, high costs of labor may push more entrepreneurs to resort to the grey zone," he says.

Despite the perceived urgency of the matter, the experts feel their calls for change are ignored.

"There is no dialogue between the authorities and organizations such as ours," complained Henryka Bochniarz. "We have an enormous knowledge of this area and we want to share it."