The bargaining power of employees in the labor market up

In December, the value of the Labor Market Index (WRP) approached the minimum recorded at the beginning of 2020, the Investment and Economic Cycles Office (BIEC) reported on Tuesday. The scale of the WRP decline is three times greater than a month ago, which means an improvement in the bargaining power of employees in the labor market.

The information provided by the BIEC shows that the WRP informing in advance about future changes in the level of unemployment decreased in December compared to November by 1.5 points. 

"This means a shift of the labor market towards the employee market and thus an improvement in the bargaining power of employees on the labor market," stated BIEC. 

For employers – apart from the increase in uncertainty, higher costs of economic activity, and the introduced institutional changes – this is an additional factor deteriorating the operating conditions.

According to experts, it is impossible to reverse the tendency in the market in the short term, i.e. the lack of labor, especially the skilled ones. 

"For many companies, the only solution will be to invest in modern technologies that replace human labor. For this, however, a favorable investment climate is needed, and this is one of the weaknesses of our economy," BIEC stated.

(PAP)