Show me the money!

METHODOLOGY: HOW TO UNDERSTAND THE UNKNOWN

Before analyzing the data provided by Statistics Poland (GUS), a few additional pieces of information must be given. When analyzing data on review of the economic situation in industries we have to remember that official data is provided for entities that have nine or more employees. In other words, only 12% of enterprises are statistically surveyed. In this 88% of unaudited are sole proprietorships and micro companies with employment level 2-9 persons. Current data shows that we have about 2.5 million active micro-entrepreneurs, including 1.6 million sole proprietors (companies without employees). The "big picture" of the situation is not entirely clear, because official statistics classify on the basis of the number of employees. However, it should be remembered that due to the inflexible labor law, the specificity of the Polish labor market is a large number of B2B and civil law contracts. Therefore, some sole proprietorships and micro-enterprises conduct activities with relatively high economic potential and at the same time are not subject to in-depth statistical research.

GENERAL INFORMATION

Once a year, GUS publishes a report on the activity of enterprises with up to nine persons employed. The latest available data is from 2019. More than 54% of micro-companies conducted activity in the field of services. Other significant sections were: trade, repair of motor vehicles, and construction. The abovementioned sections of NACE (the Statistical Classification of Economic Activities in the European Community) belonged to a total of 2 million units, which accounted for more than 90% of all microenterprises (88.5% of all people employed).

NACE section with the highest number of persons employed in 2019 was accommodation and catering (average 3.2 persons per company) and the section with the lowest employment rate was information and communication (1.4 persons).

Most of the micro-companies were located in Mazowieckie province — Warsaw (19.7%,), Silesia — Katowice (10.6%) and Wielkopolskie — Poznań (10.1%). A few companies with up to nine persons employed had their headquarters in Opolskie (2.0%), Świętokrzyskie (2.4%), and Lubuskie (2.4%).

According to official data for 2018, 25% of employees work in micro-enterprises. The employment in this segment is growing year by year. In 2018, according to GUS, the average gross salary was an estimated PLN 3,081 gross, with the average salary in the economy exceeding PLN 4,500 gross. In 2019, micro-companies paid an average of PLN 3,300 gross (in larger enterprises earnings amounted to PLN 5,480 gross). Estimations for 2020 in micro-enterprises show that the average wage was about PLN 3,500 gross (PLN 2,600 net). In larger enterprises, it was PLN 5,400 gross (PLN 3,900 net).

At present, the unemployment rate is very low and the value of social assistance is high. In effect, the labor market in most sectors of the economy is very beneficial for employees — wage pressure is constantly growing. 

REGIONS AND INDUSTRIES

Salaries in micro-enterprises in the regional structure reflect the economic and social situation. The lowest salaries are paid in the eastern provinces (Warmińsko-Mazurskie, Podlaskie, Lubelskie) and in the Świętokrzyskie and Opolskie (south of Poland). The highest salaries are paid in the Mazowieckie region. The differences are about 40%.

Employees in the construction industry can count on the highest salaries (erecting buildings, renovations, and finishing works). Here, even unskilled workers receive higher wages than specialists in other industries. The approach of entrepreneurs has also changed. They increasingly employ (based on labor law, not civil contracts), take care of non-wage benefits, and are open to negotiation, which increases wages every few months. A similar situation is in the sectors of car repairs, household appliances, photovoltaic installations.

On the other extreme, there is small trade, care services, and the beauty industry. Here, wages are lower, although there is also wage pressure.

MEDIUM AND BIG COMPANIES

Statistically, the highest wages in 2020 were in the ICT industry (more than PLN 9,200 gross), next were financial and insurance activities, mining and quarrying, production and supply of electricity, gas, steam, and hot water (up to PLN 8,200). Work in the sector of professional, scientific, and technical activities amounted to an average of PLN 7,600.

The latest data shows, the highest salaries in industry and construction are paid to employees in the Mazowieckie province. In the period of January-June 2021, the average salary in the industry in this region was PLN 6,532 and in construction PLN 7,200.

The average salary in the first six months of 2021 for the entire country amounted to PLN 5,755 in the industry and PLN 5,575 in construction. Compared to the last year's result, wages in this industry turned out to be 8.7% higher, and in construction, they increased by 6.1%.

As far as the average wage in the industry is concerned, the best result was achieved by the Mazowieckie region (PLN 6,532). The lowest wages were recorded in Warmińsko-Mazurskie (PLN 4,887), Podlaskie (PLN 5,019) and Podkarpackie (PLN 5,022).

The highest salaries in construction were recorded in the following provinces: Mazowieckie (PLN 7,200), Lower Silesia (PLN 5,992) and Podlaskie (PLN 5,635). The lowest salaries are paid to construction workers in Podkarpackie (PLN 4,388), Lubelskie (PLN 4,420) and Świętokrzyskie (PLN 4,453).

According to "Best Paying Jobs in Poland 2021" in top ten are surgeons/doctors with a salary range from PLN 14,900-42,800, judges (PLN 12,500-35,900), lawyers (PLN 10,100-29,100), managers, CEOs, CFOs, and marketing directors (PLN 10,000-27,400, depending on branch and experience), college professors (PLN 7,200-20,500) and pilots (PLN 6,000-17,100).

Additionally, IT employees have been paid very well for many years. Even before 2021, most of the work was performed remotely, so wages do not differ much depending on the region. IT project architects and security specialists earn around PLN 13,000-20,000.

EMPLOYMENT CHANGES

In 2021, the largest drops in employment compared to the previous year were recorded in the production of leather and leather goods (by 14.0%), the production of clothing (by 13.1%), and accommodation and catering (by 12.0%). Employment in the period January-June 2021 increased in production of rubber and plastic products (by 4.3%), information and communication (by 3.6%), production of coke and refined petroleum products (by 3.5%), waste management, recovery of raw materials (by 3.4%) and furniture production (by 3.1%).

The average salary in the enterprise sector in the period January-June 2021 amounted to PLN 5,725 and was higher than in the corresponding period of the previous year by 7.8%. In July 2021, it amounted to PLN 5,852 (an increase of 8.7%).

Wages in the first six months of 2021 increased in all industries analyzed by GUS. Significant increases were recorded in the production of leather and leather goods (by 14.9%), the production of furniture (by 13.3%), the production of electrical equipment (by 12.7%), as well as wholesale and retail trade and repair of motor vehicles (by 12.2%). Wages in hard coal and lignite mining increased the least (by 1.6%).

The lowest salaries were offered in such industries as production of clothing (PLN 3,579), production of leather and leather goods (PLN 3,823), accommodation, and catering (PLN 3,993). 

CONCLUSION

We are observing a deepening of the economic and social phenomena that started a few years ago. There is a further regional stratification of wages — the differences between the largest and richest region (Mazowieckie) and the small and economically weak ones are growing. Due to the shortage of employees, the wage pressure is increasing. However, there has been a qualitative change — employers are rather trying to limit employee attrition and agreeing to their demands. This, in turn, creates inflationary pressure. Rapid growth in industrial production and good export results are driving wages up in the industry. In this sector, we expect record wage increases also due to the slogans of the re-industrialization of the EU. Typically, the smallest companies pay the lowest. This phenomenon will intensify due to unfavorable changes in the tax law, which will enter into force from 2022 based on Polish “New Deal.” 

Established in 1990, the Polish Chamber of Commerce (KIG) states that it is “the largest independent business organization in Poland.” In KIG, Przemysław Ruchlicki takes part in consultations on draft laws and regulations regarding commercial and tax law.