Beata Szydło: Minimum wage at 2,000 PLN

Polish Prime Minister Beata Szydło surprised everyone at a press conference when she announce the government’s plans for increasing the minimum wage in Poland. Although a raise was expected, the new minimum wage amount came as a surprise. The government wants to set it at 2,000 PLN gross.

Currently, the official minimum remuneration for a full-time job in Poland is 1,850 PLN gross. In other words, the ruling party wants to increase it by 150 PLN. The minimum wage level has been increasing for many years. Ten years ago it was 899.10 PLN gross.

The government proposal be discussed at the Social Dialogue Council, where the representatives of labour unions and employers will express their opinions. However, the government has made a firm decision about this and will stick to it no matter what.

The new minimum wage will also have effect on the minimum hourly wage that the government is working on. The hourly wage is to be connected to the minimum wage. Media speculate that the new minimum hourly wage will be set at 13 PLN gross.

Media experts highlight the fact that the increase will entail higher revenue for the state, as a large chunk of the salaries is transferred to the state budget in the form of social insurance contributions. The contributions, which are in fact taxation, finance health service, pension system, etc. All in all, not only the Poles, but also the government will benefit from the change.

Opponents argue that increasing labour costs will contribute to higher unemployment. Some note that those who will hit by the new law are the self-employed. They pay monthly social insurance contributions at a level calculated based on the statutory minimum wage. The amendment means their costs will increase significantly.

The government hopes that more money in the pockets of Poles will boost consumption, which in turn will translate to bigger VAT tax revenue.

The government needs money to finance the “500+” child benefit programme. The scheme is already on the way. Each Polish family with two or more children will get financial support. The ruling party claims the state has the funds to carry out the programme, while the critics argue it is a threat to budget stability.

According to the data collected by Central Statistical Office, an average Pole spends almost half of their income on groceries and housing. In 2015, 15.5% of the population earned less than the relative poverty threshold.