Will the Rise in Wages Mean Less Foreign Investment?

According to Gazeta Wyborcza foreign capital companies employ some 1.2 mln workers in Poland. Highly trained workers and cheap labor have been the motivating factors enticing foreign capital. Despite record investment numbers, the labor market is becoming less friendly to the employer. This year alone, some 60 of percent employers have had difficulty in finding adequate workers. With thousands of Poles migrating, finding workers has become increasingly difficult. This in turn has raised the wages dramatically. Gazeta Wyborcza reports there has been a 10 percent wage increase in the last year.

Will the increase in wages mean Poland will become less competitive? According to Gazeta Wyborcza, the deputy minister for economy Pawel Poncyliusz, claims that Poland will now have to concentrate on keeping the investors that are already here, content. He claims Poland cannot only be concerned with enticing more investors, but monitor whether the already existing ones are happy in Poland. The government has already created campaigns to entice Poles who have emigrated to return back to Poland.

The Labor Minister Joanna Kluzik-Rostowska also wants to open the Polish labor market to non-EU nationals and lower the costs of work permits from 1,000 zloty to 100 zloty. Gazeta Wyborcza reports that employers however see a problem in the amount of graduates who are leaving universities with humanities degrees instead of technical qualifications. Employers need engineers and technicians. The situation may be improved within the next few years.

The EU is said to spend mlns of euro on supporting the more necessary degrees required in Poland. Currently the foreign investment figures show some 6.2 bln euro reached Poland in the first half of this year. That is 27 percent more than in the same period in 2006. In all of 2006 foreign investment funds amounted to 15.2 bln euro. Multinational companies continue to erect new factories producing electrical equipment and cars. New service centers are also opening up, as are scientific research institutions.