Poles’ wallets are shrinking. Real wage cuts

According to the Central Statistical Office, the average salary in the first quarter was PLN 7,124.26, which means an increase of 14.3% per year. In the last quarter of 2022, it amounted to PLN 6,733.49, and in the first quarter of 2022 - PLN 6,235.22.

Real wage cuts

Although growth of more than 14% may seem high on an annualized basis, if you compare it with inflation, it turns out that wages in real terms are falling.

According to the operational assessment of the Central Statistical Bureau, inflation in April amounted to 14.7 percent. In March, it exceeded 16 percent, and in February it reached a record level of more than 18 percent. We will have to wait until the Central Statistical Office releases its latest quarterly inflation data to estimate the magnitude of the decline in real wages in the first quarter. In March alone, the dynamics of wage growth amounted to -3.5 percent.

6.5 million employees outside of brackets

The data of the Central Statistical Office only represent wages in the sector of enterprises with more than 10 employees, which means that they do not cover a sufficiently large group of working Poles. Many companies in Poland are micro and small enterprises that do not fit into this assessment. In the first quarter of 2023, this type of company employed 6.5 million people. So all of them somehow went beyond the scope of these data. This group also includes persons employed in the public sector, i.e. doctors, nurses, teachers, police officers and government employees. So the real average wage is definitely different. Much lower.

- Real wages are falling, inflation is higher. High inflation destroys the economy. Companies are afraid of this, which is manifested not only in below-real growth, but also in low investment costs. Kazimierz Sedlak from Sedlak & Sedlak told Rzeczpospolita about this.