The Prosperity Index reflecting the economic condition of Polish society in August 2021 fell by more than 1 point compared to the previous month’s value.
This was the first significant decline in the index in seven months. Such a scenario was predictable due to the persistent and rising inflation for over a year.
It is true that wages continue to rise at a pace that exceeds the price increase, but the increase in wages does not extend to all employees, contrary to the increase in the prices of consumer goods and services. Moreover, the pace of wage growth starts to slow down slightly. In the period April – June this year. real wages grew at a pace of around 5% per annum, and in July they slowed down to 3.4%.
In July, employers did not significantly increase the scale of employment in the enterprise sector, contrary to the declarations expressed in the survey, in which almost every second representative declared an increase in employment in the near future. The small creation of jobs may be a consequence of the gradual phasing out of the demand for seasonal workers. Perhaps, however, this is the effect of the extremely rapidly growing costs of running a business, where employee costs in the case of small companies can reach up to 80%.
The race between wages and prices is doomed to win for inflation. And it is who currently threatens the welfare of Polish society the most.
Source: BIEC
