Miller to meet with employers on labor reform package
Last Thursday, protests led by the OPZZ and the Solidarity union included picketing outside the Labor Ministry in Warsaw while an effigy of Hausner was set on fire during a protest in Katowice. But protestors turned out in smaller numbers than planned after an announcement by OPZZ, the Polish Confederation of Private Employers (PKPP) and the Union of Polish Craftsmen agreed to a stance on the government's labor law amendments on Wednesday. Although the draft labor law was referred to a specially appointed Sejm commission two weeks ago - along with a draft by the Civic Platform (PO) - Hausner vowed that the findings of the Tripartite Commission would be incorporated in the new law. "The government will support those solutions that result from an agreement between employers and unions and will not proceed further under any circumstances," Hausner told protestors in Warsaw. But before the Tripartite Commission can present the government with its position, the agreement must be ratified by the OPZZ council, which will meet on April 24.
"It's the first positive sign that political consensus is possible around the topic of labor market liberalization," said Krzysztof Rybiński, head economist at Bank Zachodni WBK. "International experience shows very clearly that in every country in which trade unions were very strong such as Spain, Ireland and the Netherlands, consensus between trade unions, employers and government was a necessary condition for improvement in the labor market." Rybiński added that the next step toward halting the rise of unemployment would be for trade unions to reduce their wage demands. "It's the beginning of a long and possibly painful process but it's a good start." The "Entrepreneurship First" program aims to stem Poland's declining economic growth, improve economic performance in the short term and bring about rapid expansion within two to three years while significantly reducing unemployment within three to four years. It also aims to accelerate the restructuring of the economy and increase the competitiveness of Polish companies and to utilize European Union (EU) structural funds effectively, Hausner told the Sejm this month.
The potential for the reforms to achieve their aims has divided analysts. According to Rybiński, the freeing of the labor market is essential as it lowers the level of growth necessary for the economy to generate new jobs, but that economic recovery will require additional measures to stimulate small and medium companies. "If (the government) does just the labor code part and forgets about all the other issues then it will get them nowhere," Rybiński said. "There are equally important parts related to reducing bureaucracy, such as the cost of tax collection, promoting growth in the small and medium firm sector, which at about 50% of Polish GDP is a very important part."
"I don't see a chance that the package will enable the Polish economy to grow at a rate that is right for it, which is at least 5% (annually)," said Krzysztof Dzierżewski, economist at the Adam Smith Research Center. "All economies like ours, which are hungry for success and want to escape the state they are in have a natural tendency for economic activity, entrepreneurship and work. Growth is not linear by nature ... and longer periods of growth are interweaved with short periods of lower activity. The (right growth) tempo is attainable without any specific efforts by the government."
