Poland is widely regarded as one of the most successful transition economies. On the other hand, Poland is one of two countries in the Europe in which absolute poverty rates have risen in recent years. Poland’s labour market trends may well have something to do with the fact that polish unemployment rates have been among Europe’s highest since the mid-1990s. Improvements in the areas of poverty and social inclusion in Poland are unlikely if the unemployment situation is not addressed. Poland’s overall registered unemployment rate has been in the 18-20 per cent range ever since 2001. This is roughly twice the EU average. Moreover, hidden unemployment is estimated at approximately 1 million people, and informal employment is estimated at slightly less than a million. Labour market trends are particularly unfavourable for women and young people. The long-term unemployed (those without work for at least 12 months) are also quite numerous, accounting for more than 50 per cent of total unemployment. Poland’s employment rate is not surprisingly quite low: at only 51.5 per cent in 2003, it was well below the EU15’s. This caused that on average, one Polish worker must support two non-working Poles.
Why is this so bad?
Firstly it is because of demographic conditions. Polish labour markets are absorbing large numbers of new workers created by the population boom and many of these young workers are not finding jobs or face poor prospects for career advancement.
Secondly it is caused by weaknesses in educational system. Polish schools often do not provide education of the desired quality, particularly in terms of skill development.
At last but not least it is caused by inappropriate social protection policies and structural changes in the labour market.