Stimulating the unemployed

Financial assistance for unemployed people seeking to start a business may be doubled from its current level of zł.13,000 thanks to a zł.2-billion surplus in the Labor Fund, Rzeczpospolita reported. The idea is connected to the Ministry of Labor and Social Policy's reform of the law on the promotion of employment.

"Labor offices claim that the zł.13,000 people are entitled to when opening up their own businesses is too little," Labor Minister Jolanta Fedak told the press, adding that by using the surplus in the Labor Fund, "this subsidy could grow twofold."

The Labor Fund is a social fund financed by employers, who contribute 2.5 percent of each employee's gross salary. Following the high level of salary growth in 2007, the fund received over zł.8 billion, resulting in a zł.2-billion surplus. In paying for the boost in financial assistance, however, the Labor Ministry would likely also turn to the European Social Fund.

The initiative to double the subsidy may be helpful for some people, since the zł.13,000 currently offered is generally regarded as inadequate to start up a business. However, the plan is not enough to activate a large number of the unemployed, said Maciej Grabowski from the Gdańsk Institute for Market Economics (IBnGR).

"Broader activity coordinated with social care institutions would have a bigger effect," Grabowski suggested. He added that the overall decline in unemployment means that a large number of those who remain unemployed are likely to have serious social problems, making the success of the initiative less certain.