Over 2 million Poles need a job Shutterstock

In recent years Poland has received glowing press for its economic performance. The country made waves internationally when it became the only EU member to register positive GDP growth in the crisis year of 2009.

Since then much has been made of Poland’s consistent, dynamic economic growth, which it achieved in the face of less-than-favorable external conditions.

But despite its recent economic performance, the country continues to have a stubbornly high unemployment rate that many economists say casts a shadow on the “successful market transformation” narrative.

Worse than two decades ago

In January this year, the unemployment rate in Poland was 13.3 percent, according to government statistics, meaning over two million people were out of work. This means the jobless rate today is higher than it was in 1991 (when it was 12.2 percent), two years after the initial mass layoffs that followed the collapse of the communist government.

Unemployment in other post-communist EU countries is significantly lower. For example, unemployment stood at 8 percent in the Czech Republic as of last November and at 7.2 percent in Romania in mid-2011.

Even Hungary, whose economy has taken a battering in recent years, had unemployment of 10.7 percent at the end of 2011.

Eurostat, the EU’s statistics agency, which uses a different methodology (it doesn’t count as unemployed those who have given up looking for work altogether) has Polish unemployment at 9.9 percent, but that figure is still high, compared with its regional EU peers.

The figures paint an especially stark picture when considering that roughly two million people have left Poland’s labor market in search of greener pastures since the country joined the EU in 2004.

Causes regional, generational

One major factor behind Poland’s stubbornly high unemployment figures, ex-perts say, is geography. Various parts of Poland show vastly different joblessness rates.

For instance, the Warmińsko-Mazurskie voivodship in the northeast has an unemployment rate of greater than 20 percent, while in the western Wielkopolskie voivodship it’s just 9.2 percent.

Jobs are hardest to find in the eastern regions, which are less developed than western areas of Poland and were once heavily reliant on agriculture.

Another important factor is that unemployment is increasingly becoming a generational problem. At the end of last year, 29.4 percent of the country’s unemployed were between the ages of 25 and 34.

Labor laws and high expectations

“Jobs are not being created on the scale that they should be. The crisis, high taxes on work and the existence of the gray economy all contribute to that,” said Dominika Staniewicz, labor market expert at the Business Center Club (BCC).

Regarding high youth unemployment, Ms Staniewicz said, “Many young people want to receive a lot of money, which they don’t deserve, at the start of their careers.”

She also pointed to labor laws, such as the fact that employees over the age of 56 receive “special government protection” that means it is practically impossible to fire them.

As a result, many firms tend to fire people before they reach that age. Needless to say, out-of-work citizens over the age of 56 have trouble finding new jobs for exactly the same reasons that caused them to lose their previous employment positions.

The solution, Ms Staniewicz says, is “the opposite of what the government is doing … so reduce social contributions for employers and do something about the laws regarding high-risk workers for employees.”

Poland’s economic achievements over the past two decades have been considerable. But those achievements won’t be sustainable if the country’s labor system remains so inflexible. Indeed, if no reforms are made, economists say, long-term growth prospects could be jeopardized and entrepreneurship discouraged, all of which could result in high levels of structural unemployment in Poland for years to come.