No work today
By : Jeffrey Sparshott
Stanislaw Kozarzewski started his first and only job at an auto plant 26 years ago. His career at the company, now Daewoo-FSO Motor, ended last week after the company told him his division would be liquidated.
"I was quite prepared because my unit had been downsized before," the 44-year-old logistics manager said of the February layoff notice. "I have an economic education, so I realized that it could happen and I understood why. But I have seen tears in the eyes of people who received notices. Of course it's not pleasant, especially when you have worked here for so many years, when you know so many people and you know the walls and every place here."
Out in the cold: After working 26 years in the auto industry Stanislaw Kozarzewski's job was axed.
Kozarzewski is not alone. More than 2.8 million Poles were registered as unemployed in February a rate of 15.8%, which is the highest level since February 1995, according to the Central Statistical Office (GUS (http://www.stat.gov.pl/english/index.htm)). Analysts expect the figure to climb before the year is through. And the unemployed will face competition from a boom of about 1 million new entrants to the job market during the next five years, according to government officials.
"If we want to reduce unemployment to 10%, we must create 4 million new jobs over the next five years," said Bartlomiej Piotrowski, a government adviser on labor and social policy. So now, Prime Minister Jerzy Buzek's government (http://www.kprm.gov.pl/), which came to power when unemployment stood at 10.3%, has put together an anti-unemployment package that involves economic incentives and changes to Polish labor law. Last week the Sejm (http://www.sejm.gov.pl) began looking at the proposals.
Any government action will have to address the manifold underlying causes of high unemployment. The problem at Daewoo is tied to that company's woes a world away in South Korea, as well as on international markets and on the Polish auto market. But some businesspeople, economists and politicians, looking beyond unique instances of layoffs, see deeper causes for high unemployment. This is particularly true of Poland's ongoing economic transformation and changing demographics, but other issues include restrictive labor regulations, relatively high labor costs and barriers to moving to vacant jobs in big cities. Slowing economic growth and high interest rates are also hampering businesses.
"It is a serious challenge," said Dariusz Filar, chief economist for Bank Pekao and an economics professor at the University of Gdansk, of this year's high unemployment rate. "I would stress that this unemployment is mainly of a structural and demographic character, with companies restructuring and a large number of people now entering the job market.
"From a social point of view, this does not reduce the challenge but from a purely economic point of view the picture is slightly less negative."
While the economy is growing, it is also becoming more efficient, Filar said. This means that fewer people are needed today than 10 years ago to produce an increasing amount of goods. The private sector is less generous, blaming Polish law and government regulations for stifling the job market.
"Either we move toward more flexibility in the labor market or we agree to growth in unemployment," said Jacek Mecina, deputy director of the Polish Confederation of Private Employers (PKPP) (http://www.prywatni.pl) labor relations department. "And growing unemployment is like pulling a brake that will stop the economy."
The challenge is especially true for the young at the end of 2000 those under 34 made up more than half the unemployed. The challenge will become more acute as those born during the years of martial law, the biggest post-war population segment, enter the workforce.
"So far the percentage of unemployed among our graduates has been around 10%, but with the demographic peak the supply of graduates will be very high," said Monika Domanska, head of the career office at Krakow University of Technology. "It will cause a problem. I hope the situation in the economy will do something to prepare other opportunities."
Domanska said the situation at her school is unique because a large number of students graduate in high-demand fields, such as information technology and mechanical engineering, and with important qualifications, such as foreign-language training. Still, nothing is guaranteed for graduates with strong credentials.
Roger Adamowicz graduated from the Warsaw University of Technology Business School last October. But even an MBA degree and fluency in English and German hasn't guaranteed him a job.
"The middle-management level is almost saturated everywhere," the 28-year-old job seeker said. "I am very hopeful that something will happen in April. Some companies have said that as soon as they have the money, they will consider my candidacy. But it's really hard at the moment."
And it's still harder for those without a university education. According to a European Bank for Reconstruction and Development (EBRD) survey, two-thirds of those with higher education have found permanent employment. Meanwhile, Poles with secondary vocational training or less make up 97% of the unemployed, according to GUS.
Capitalism vs. communism
A major reason for high unemployment and the challenges facing job seekers is Poland's adoption of the free market and the hangover of inefficient operations under communism, especially in agriculture and manufacturing. Even in regions where unemployment is below the national average, concern is heightened over sectors that were dominated by the state.
"Malopolska is doing relatively well, especially when compared to the rest of Poland," said Andrzej Martynuska, director of the Malopolska labor office in Krakow. "But there are some challenges and threats, especially in agriculture and the heavy sectors."
As the government sells off state-owned assets, companies are shedding workers as they gear up to compete on international markets. Manufacturing operations, for example, have consistently contributed the greatest numbers to the ranks of unemployed. In the fourth quarter of 2000, 554,600 people left their manufacturing jobs and joined the unemployment rolls, according to GUS.
Adding to the problem in heavy industry, many private companies promised the government not to lay off workers immediately, but those agreements are now expiring. And the International Monetary Fund (IMF) (http://www.imf.org) notes that fundamental structural challenges still lie ahead in the agricultural, steel and defense sectors, while the EBRD adds mining to the list. In agriculture, the EBRD (http://www.ebrd.com) estimates that hidden unemployment people not registered as unemployed but really not holding a job is 1 million-1.5 million people.
Just the ticket: a job seeker looks for work at an automatic employment machine.
Giving labor a helping hand
To create jobs, many officials agree that Poland has to make changes.
"If the job losses that are inherent in past and prospective structural adjustments are not to translate into permanent increases in unemployment, it is essential that labor market conditions that encourage job creation are established," the IMF wrote in a report on Poland's economy.
"Basically it means more flexibility in the labor markets," said Cyrus Sassanpour, the IMF's senior resident representative in Poland. "To be specific, that would be changes in the labor code changes in the employer-employee relationship, flexibility to hire and fire."
The fixed minimum wage is also high for Central Europe, he said. A 2000 EBRD study showed hourly labor costs to run ?3.40 in the Czech Republic, ?3.43 in Hungary and ?4.84 in Poland. Respective unemployment rates stood at 9.0%, 6% and 15.8%, though those rates are not only related to wages.
Within Polish society, the extent of the changes to the labor code is open to debate, though the main parties appear to be nearing consensus on some initiatives.
The Solidarity Election Action (AWS)-led government has put together a package to fight unemployment and last week the Sejm began deliberations on the proposals. The government project calls for lower taxes, a more flexible labor regime, support for small and medium-sized enterprises, and investment and export incentives.
Government adviser Piotrowski said the full slate of proposals will be sent to the legislature until the end of this month. The opposition Democratic Left Alliance (SLD) appears ready to agree to at least part of the package.
"If there is a consensus between political parties then it will be possible," said Marek Dyduch, an SLD deputy who serves on the Sejm's Social Policy Committee. "The unemployment issue should not be exploited for political purposes so if these reforms bring positive results then we will support a part of those reforms.
"We have a crisis situation with the employment issue, which makes unemployment the key problem for the coming years," he added.
Stanislaw Szwed, vice chairman of the Sejm's Social Policy Committee with AWS, said the changes are a long-term endeavor that may not immediately bear fruit. Nevertheless, the effort should transcend political boundaries, even with this fall's pending elections, he said.
"It will be passed," Szwed predicted for the government initiative. "All political groups are interested in passing this legislation because the new government will have to face those problems too. We do not just want to combat unemployment, but we want to create new jobs."
For some, the changes cannot happen soon enough.
"Polish labor is overregulated," the PKPP's Mecina said. The private-sector group said the labor code is designed to protect existing jobs rather than create new ones. PKPP has been pushing for amendments to labor laws that would allow, for example, more hiring on a term-contract basis, which AWS included in its package. Mecina said that only flexible forms of employment will allow companies to hire new entrants to the job market and gain experience. But unions are skeptical of changes to the labor code.
"Both parties should try to find a compromise rather than seek to change the legislation," said Jerzy Wozniak, head of Daewoo-FSO Motor's General Committee of Solidarity Unions. "The lobbying that PKPP is doing does not lead to a mutual understanding but to a conflict."
Interest rate policy, taxation policy toward employers and overall economic policy are keys to creating jobs, he said, adding that blaming unions is counterproductive.
"Solidarity has changed since 1989 and the union has also carried the burden of the transformation," Wozniak said. "The union has a strong understanding and acceptance for changes and for the capitalist economy which doesn't mean enthusiasm," he added.
Upward mobility
Also crucial to employment efforts is the ability to move to jobs. But either because of cost, housing shortages or lack of appropriate skills, relocating is sometimes an insurmountable barrier. The unemployment rate in Warsaw, for example, hovers around 3.5% while in the same administrative region there are powiats with unemployment rates well above 20%.
"There is the wide disparity in unemployment by region," the IMF's Sassanpour said. "If there was perfect labor mobility there would be uniform unemployment." But a lack of housing and infrastructure limits where people can move. Another problem is probably the mismatch in skill levels, he said, noting that a financial services or high-tech job vacancy in Warsaw may not concur with the skills of people in high-unemployment regions.
"What it requires is a careful look at what are the sources of growth over the next few years and whether the labor market is flexible enough to meet that challenge," Sassanpour said. On the positive side, 2000 employment in service sectors was higher than the previous year, providing the one area for employment growth in the economy, according to GUS.
Szwed said that the educational component of the government's program is central to lowering joblessness. "We must make changes in the education system so that we stop teaching the potentially unemployed," he said.
Meanwhile, would-be workers are hoping for more opportunities.
"Our life depends on the economy and on the government's plans and actions," former Daewoo employee Kozarzewski said. "The question is whether the politicians think about the country's and economy's development rather than just the next election."
Robert Wylot contributed to this article
