Poland's ruling party pledges to double minimum wage and end country's 'post-colonial' reputation as a source of 'cheap labour'

Matthew Day
Jaroslaw Kaczynski speaks during a party convention ahead of parliamentary elections in October - VIA REUTERS

Poland’s governing party has pledged to almost double the minimum wage over the next four years in a bid to escape what it has called the “post-colonial concept of cheap labour”.

The Law and Justice party plan to hike the sum from PLN 2,250, about £460, a month to around £817 by 2024 comes as the country gears up for a general election next month that could define the next decade in Polish politics.

Law and Justice portrays itself as a party caring for what it regards as the people left behind by Poland’s economic progress since the end of communism in 1989. Since coming into office in 2015 it has introduced several welfare schemes.

“We reject the post-colonial concept of Poland as a country of cheap labour,” said Jaroslaw Kaczynski, the Law and Justice leader, and a man many regard as the most powerful man in Polish politics, earlier this month.

“We owe it to Poles to increase living standards. We deserve the same standard of living as the West.”

As part of its election campaign his party has called for a “revolutionary improvement in the standard of living of Polish families”, bringing it up to a “European level” within 10-20 years.

But experts point out that Poland is already moving away from the low-labour-cost economy that attracted much of the foreign investment into the country over the past 20 years.

In the past Poland had an abundance of cheap workers owing to high unemployment rates and that made it easy for large manufacturers to investment.

“But this is now changing,” Piotr Arak, director of the Polish Economic Institute, a Warsaw-based think-tank, told The Telegraph. 

“You have demographics. Poland is getting older. This means wages are going to increase. In one or two or years we are going to surpass countries like Spain in terms of the average wage, and the average worker is going to earn more and more. The time of cheap employees in Central and Eastern Europe is ending.”

The government’s plans to force the pace of change, however, have raised concerns amongst employers. 

Lewiatan, a business lobby group, says the increases in the minimum wage could trigger inflation and lead to higher costs as the new wage levels hit the economy. As a result, it claims, company costs could jump by 16 per cent.