“Rising National Minimum Wage by 20% in 2022: Implications for the Budget Sector and Possible Solutions”

Assuming an increase in the national minimum wage by 20% next year, the problems of the budget sector will increase – not only in terms of raising the wages of the lowest earners. According to estimates by Łukasz Kozłowski from the Federation of Polish Entrepreneurs, the new minimum wage will be PLN 4,254 gross.

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– An employee earning the minimum wage would receive an average annual increase of PLN 709.40 gross monthly salary. Such a significant increase results to a large extent from the mechanism of the so-called verification indicator, which compares inflation forecasted in the past with its actual values. Currently, forecasts for 2022 are being verified, explained Kozłowski in an interview with money.pl.

Let us remind you that in 2023 the government raised the minimum wage by 19.6 percent, while the law provided for an average of 7.8 percent. increase for the budget sphere. In 2024, economists predict that the national minimum will increase by 20.5 percent. – for now, however, there is no information on how much wages in the state sector will increase.

Such a drastic increase in the minimum wage often affects the state budget.

I believe that this is unfair, because it leads to flat salaries, almost equal remuneration for a novice employee performing simple work and an experienced specialist with responsibility for deadlines or budget – says Kamil Sobolewski, chief economist of Employers of Poland in an interview with money.pl.

He adds that if 40% of of the salary budget was spent last year on employees earning the minimum wage, other employees cannot, in principle, be given a raise, otherwise the growth rate of total wages will exceed the statutory 7.8 percent.

We talk about salaries with Monika Ditmar, secretary of the board of the main Trade Union of Employees of the Social Insurance Institution about the situation in one of the state institutions.

– The phenomenon of flattening salaries of employees of the budget sector has been observed for years in the Social Insurance Institution. This is a worrying phenomenon for us – he points out in an interview with money.pl.

He also adds that, on the one hand, unions, representing employees, fight for fair wages and are satisfied with the information about the increase in the minimum wage, and on the other hand, observe in experienced employees with many years of experience – resignation, discouragement, a sense of underestimation of the hitherto professional achievements in relation to new employees.

Today, the difference in the basic salary of a newly hired employee with many years of work experience is only a few hundred zlotys, says a trade union member.

As Ditmar adds in an interview with money.pl, despite the current secrecy of salaries, employees exchange information about it – which for many is demotivating and affects everyday work.

To the extent that they do not want to train new employees to perform their duties, they do not want to share their knowledge, experience and skills. I am terrified of the future regarding the disclosure of salaries in the budgetary sphere. This will only lead to frustration and dissatisfaction of the crew. This will certainly be a huge problem for the employer – adds Ditmar.

A representative of the main trade union in ZUS tells us that the generally low level of salaries of the state budget has been causing dissatisfaction for years. Added to this is the lack of prospects for real wage growth – at least by the inflation rate. It is for these reasons that ZUS employees with many years of experience leave.

– For young people, ZUS, offering a start from about PLN 3,700 gross, is also not an attractive employer. That is why there is so much fluctuation and vacancies. Even when young people come to work, when they see what conditions are imposed on them, what is required of them, what tasks they must perform and what knowledge they must have – they quickly resign from employment from ZUS and go to other companies for more money – points out Ditmar.

Such a high increase in the national minimum wage also affects teachers. As Magdalena Kaszulanis, the spokesperson of the Polish Teachers’ Union, tells us, after such an increase, the salaries of beginner and appointed teachers will be below the minimum salary, because today their basic salary is PLN 3,690 and PLN 3,890 gross, respectively. Let us remind you that last year, teachers at the beginning of their professional career had to receive compensation to the national minimum.

The basic salary of a certified teacher, i.e. the most experienced teacher at the peak of his career, is PLN 4,550 today and will be only PLN 300 higher than the national minimum. It’s a scandal! Will a college graduate consider working at a school? No, because for two years we have been observing a lack of people willing to work with children. The personnel crisis will deepen even more. And this means a decrease in the quality of teaching in Poland, he points out in an interview with money.pl.

According to experts, changes are needed. – As Employers of Poland in 2022, we proposed equalizing the rate of wage growth in the public sector with the rate of increase in the minimum wage and the rate of valorization of pensions and pensions, because differentiating these ratios pays off financially for the government, but is socially unjust and quietly multiplies the ranks of the victims of inflation, for example, people whose wages used to be clearly above the minimum wage, and now, despite their efforts and professional development, they have become equal to this minimum wage – Sobolewski tells us.

He adds that this problem affects 1.5 million Poles, and its motivational effects reduce the comfort and quality of work.

– Finally, it is worth talking seriously about it in 2023, instead of blindly applying the laws from 20 years ago. A solution worth considering would also be the regionalization of the minimum wage or the transfer of negotiations on the minimum wage to the industry level, because PLN 4,000 in the IT industry in Warsaw may be much easier than in the Kalisz district, where a year ago the average wage was PLN 4,000 – comments the chief economist Employers of Poland.

What do teachers think? A representative of the Polish Teachers’ Union proposes to link teachers’ salaries to the average salary in the economy. – We have prepared a ready draft in the form of a civic act. The bill is in the Sejm and awaits processing. We are also proposing a 20% increase in teachers’ salaries this year. Kaszulanis points out.

Weronika Szkwarek, money.pl journalist