In an impressive demonstration of economic resilience, Poland has recorded its fastest real wage growth in the last 16 years. According to Statistics Poland (GUS), the average wage in January surged by 12.8% year-on-year, reaching 7,768 zloty (approximately €1,797) before taxes. This increase exceeded the expectations of analysts who had anticipated a rise of around 11%. The significant wage growth has been primarily supported by an unprecedented increase in the minimum wage, which was partially implemented at the beginning of the year.
In a more detailed analysis, real wages—earnings adjusted for inflation—rose by 8.9% last month, marking the most substantial growth since April 2008. It’s important to note that GUS’s data on average wages only accounts for the earnings of workers at companies with more than nine employees, excluding self-employed individuals and those working in the public sector.
Jakub Rybacki, head of the macroeconomics department at the Polish Economic Institute (PIE), attributed the wage increases mainly to the rise in the minimum wage. Poland is set to experience a record increase in its minimum wage throughout 2024, with the adjustments occurring in two stages. The initial increase elevated the minimum wage from 3,600 zloty (€832.71) to 4,242 zloty (€981.21) in January. A further increase to 4,300 zloty (€994.87) is scheduled for July, culminating in a total rise of 19.4% compared to December 2023.
The backdrop to this wage growth has been a period of economic challenges, including high inflation rates triggered by the post-pandemic economic rebound and the outbreak of war in Ukraine. Real wage growth in Poland experienced a downturn for 12 of the 14 months between June 2022 and July 2023. However, with inflation beginning to subside from August 2023, real wages have seen a return to growth. Inflation continued its downward trajectory, falling below 4% in January for the first time in nearly three years.
Analysts remain optimistic about the future, expecting wages to continue their upward trend in the coming months. ING Bank Śląski economists have noted a willingness among companies, especially larger ones, to offer increases close to record highs. Nonetheless, some sectors, such as furniture production, still face challenges impacting employment levels.
Despite a slight year-on-year decrease in private sector employment in January, month-on-month figures show an increase, suggesting a potential rebound in labour demand after a challenging 2023. This trend underscores the dynamic nature of Poland’s economy as it navigates through recovery and growth.
