Firms raise prices due to wage increases
20:02
Increasingly higher labor costs and an increase in production costs are the main reasons why entrepreneurs are increasing prices, according to a study by the Polish Economic Instituten (PIE), a public think tank. Entrepreneurs also wanted to recover from the losses from the pandemic.
The data collected by PIE shows that as much as 70 percent of the surveyed companies indicated rising labor costs as an important or very important reason for the increase in prices. Not much less – 68 percent – recognized the manufacturing costs as such. The results do not add up to 100 percent, because entrepreneurs could indicate several reasons for the price increases.
The results obtained by PIE belies the popular belief that supply shortages are the main reason behind the more offensive pricing of companies. Andrzej Kubisiak, deputy director for research and analysis at PIE, says that if we were to rely only on entrepreneurs' declarations, it could be said with full conviction that the Polish economy is already experiencing a price and wage spiral. Since companies claim that they raised the main prices due to the increase in wage costs, and these – according to Eurostat data – are growing the fastest since 2008, the conclusion cannot be different.
