Poland Minimum Wage Will Be Increase Twice In 2023

July 8, 2022
Poland Minimum Wage Will Be Increase Twice In 2023

The minimum wage by January 2023 is to be PLN 3,350, and from July 2023 – PLN 3,500 – such a
proposal was recently presented by the government as part of the ongoing negotiations on this
subject in the Social Dialogue Council. This means that from July next year, the wage minimum
will probably increase (if the government’s bill enters into force) by PLN 490, i.e. as much
as 16.5 percent. compared to 2022

The main reason for the record high increase is rampant inflation (12.4% in April) and equally
fast growing wages in enterprises (14.1% in April). And since the PiS government is always
trying to make the minimum wage dynamics exceed these market rates, we have over 16 percent.

It is important, however, that from July 2023 PLN 3,500 will be the starting point for the
determination of the minimum wage for 2024. With the persistently high inflation, it may be
increased by, for example, 10%, i.e. to PLN 3850. And if the trade unions’ proposal passed
and the lowest administratively determined wage in 2023 reached PLN 3,790, it would certainly
exceed PLN 4,000 in 2024. zloty.

Thus, we are rapidly approaching the fulfillment of the promise made by PiS president Jarosław
Kaczyński or Prime Minister Mateusz Morawiecki in 2019: that in 2024 the minimum wage will be
just PLN 4,000. zloty. – Indeed, we are very close, if not in 2024, then certainly in 2025 –
comments Łukasz Kozłowski, chief economist of the Federation of Polish Entrepreneurs.

In 2019, PiS’s announcements seemed to be an economic aberration. At that time, the wage minimum
was PLN 2,250, so reaching PLN 4,000 would almost double it (an increase by almost 80%) in just
five years. And economists assessed that it would be an unbearable burden for employers, it would
have to lead to layoffs and an increase in unemployment. Now, however, what seemed impossible
turns out to be quite real. So one has to ask whether it will be equally dangerous for companies
and the economy?

– Undoubtedly, the market environment has changed dramatically – comments Łukasz Bernatowicz,
vice president of the Business Center Club. – Due to rampant inflation, PLN 4,000 has much less
purchasing power, the real value of such earnings has significantly decreased compared to 2019 –
he explains. In other words, experts admit that the minimum wage at this level in 2024 will not
be such a heavy burden for employers. At the same time, however, they warn that this is not
entirely safe and that the government should not try to do so at all costs.

– There is a risk of recession ahead of us, deterioration of the condition of companies, besides
raising the minimum wage too quickly is adding fuel to the inflationary fire – analyzes Bernatowicz.

– I understand that the government wants to compensate for the inflation of the lowest earners –
says Kozłowski. – However, he should stick to the so-called the statutory minimum, from which it
follows that in 2023 the lowest wage should be 3416. If we continue this path, PLN 4,000 in 2024
would be possible only at 20% inflation, which I hope will not happen – he emphasizes. And he adds
that even if we wanted to maintain the ratio of the minimum to the average wage at 50%, it should
amount to PLN 3,419 next year, PLN 3,688 in 2024, and PLN 3,936 in 2025.

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