Unemployment Falls

Bright Future?

Bright Future?

The number of unemployed Poles aged under 25 decreased from 395,000 to 301,000 in the space of one year according to Eurostat. This is a record for the EU and a surprise for economists. Youth unemployment is considered key in assessing a country’s overall economic situation as it is the first indicator to soar in a crisis and the last one to fall when the economy recovers. That was the case in Poland. In 2010, when the ripple effect of the global crisis was felt in the Polish economy, 24% young people were jobless. At the end of 2013 this figure reached almost 27.5%, but after four lean years the unemployment rate in this age group began to drop and did so astonishingly quickly. Total unemployment in Poland also fell last year, from 10% to 8%, marking another EU record. Economists find this unusual, since unemployment only falls so rapidly when GDP growth is around 6% and in 2014 it was only 3.3%. The sharp rise in the number of jobs is a result of the investments of medium-sized and large companies, whose spending on development in 2014 was 16% higher than in the previous year. Governmental programmes designed to reduce youth unemployment also contributed to this improvement. By the summer, the unemployment rate in Poland is expected to drop to 9.7% according to the Central Statistical Office of Poland (GUS) or even to 7% according to Eurostat. The differences result from the diverse methodologies used by the two institutions. While GUS measures the ratio of registered unemployed people to the total number of people with employment contracts, Eurostat takes into account the business activity of the population in general, including work under civil law contracts and in the grey economy. The BAEL methodology used by Eurostat does not focus on the quality of jobs, however, it gives a fuller picture of the market and allows comparisons within the EU.

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