The Polish labour market in the age of a pandemic. Interview with dr E. Ignaciuk from the Faculty of Economics, UG

Dr E. Ignaciuk

Photo: Arek Smykowski

- 'Although data on the unemployment rate during COVID-19 may suggest a positive correlation between successive waves of the pandemic and the accompanying partial "shutdown of the economy" and the size of registered unemployment, we should be aware that this may be one of the lower prices we pay for saving human lives and ensuring social stability,' - we talk about the effects of the pandemic, including the positive ones, and their impact on the labour market with dr Ewa Ignaciuk from the Department of Microeconomics at the Faculty of Economics, University of Gdańsk.

The labour market is changing significantly under the impact of the SARS-CoV-2 pandemic. How would you describe the direction of these changes?

The past year has undoubtedly been a very difficult period for the labour market. We are all aware that the situation on the labour market has always reflected the socio-economic situation of the country, and this situation - in recent times - has been influenced both by the shock of the pandemic and by the solutions adopted by the government to counteract the effects of the spread of the coronavirus. And although each of these elements has affected individual sectors of the economy to a different extent, one can still speak of many quantitative and qualitative changes taking place both on the supply and demand sides of the labour market.

These processes of change seem to be completely subordinated to pandemic rhythms. Are the effects of the pandemic, as observed in its first, second and third waves, equally severe on the labour market? What do the available reports and statistics say about this?

The first visible effect of the SARS-CoV-2 pandemic was the decline in jobs observed in the first quarter of 2020. As we learn from the survey results published by the Central Statistical Office, average employment decreased both in the national economy in general (from 9 231 thousand people in Q4 2019 to 9 225 thousand people in Q1 2020) and in the business sector (from 6 422 thousand in Q4 2019 to 6 412 thousand in Q1 2020). These changes were not all due to a decline in domestic demand, but were also the result of reduced foreign demand for domestic goods and services and were a consequence of disrupted supply chains from imported primary commodities and materials.

March and April 2020 proved to be the most difficult period for most enterprises. The consequences of the "epidemic shock" were very painfully experienced by the industry, in which - as a result of the reduced portfolio of orders for industrial production and the worsening economic situation - it was decided to further reduce employment and lower the level of salaries (the average monthly salary decreased from PLN 5,389.58 in February to PLN 5,336.14 thousand in March and PLN 5,175.58 in April). However, the following months brought an improvement in moods, an increase in employment and an increase in average wages in the enterprise sector.

An improvement in the labour market situation was also observed in the Q3 and Q4 of 2020. From the perspective of assessments of available data, it seems that the second wave of the pandemic, although much stronger than the first, did not bring as many adverse changes as the first 'epidemic shock'. However, we still have to wait for a full assessment of the impact of the second wave on labour demand until the CSO publishes complete employment data for Q4 2020.

The image of labour demand during the SARS-CoV-2 pandemic would not be complete if it did not show changes in the number of employed persons who did not do any work during the week under review due to an interruption in the activities of the workplace. We must be aware that while in the first quarter of 2020 there were 207,000 such cases, in the second quarter there were more than three times as many (684,000 people). On the other hand, in Q3, which was largely a period of partial relaxation of restrictions resulting from the need to counteract the coronavirus pandemic, lack of work during the week in question due to a break in the activities of the workplace was recorded in only 65 000 cases.

How did the unemployment rate evolve in the era of the pandemic?

Despite several measures introduced by the government to protect jobs and support entrepreneurs, the number of people out of work increased during the pandemic period. The CSO data shows that adverse changes in registered unemployment were already recorded in April 2020. At that time, the number of people who were unemployed and actively seeking work increased by 6.27% compared to March 2020. (an increase from 909 thousand to 966 thousand people). The upward trend in the number of registered unemployed continued until July. As a result, at the end of July 2020, there were 1030 thousand unemployed registered in Polish labour offices, 13.31% more than at the end of March 2020. After a period of slight improvement of the situation in the months of August-October, with the second wave of the pandemic, the number of registered unemployed increased again, reaching 1046 thousand people at the end of December. At this point, the question arises: how did these figures translate into unemployment rates? We also know from the CSO publication that after an increase in the registered unemployment rate in the first phase of the pandemic (from 5.5% in February to 6.1% in June 2020) in the following months (from July to November), the percentage of those who were unemployed and actively seeking work remained at 6.1%. A renewed increase in the registered unemployment rate (to 6.5%) was brought about by the second wave of the pandemic.

Although in the data I have presented, one can see a positive correlation between the partial 'shutdown of the economy' accompanying the successive waves of the pandemic and the level of registered unemployment, one must be aware that this is perhaps one of the lower prices we pay for saving human lives and ensuring social stability. I am not belittling the dramas that people out of work go through, but I believe that as a society we are making a choice where the immediate threat to human life is at stake.

Which branches have been hardest hit by the pandemic and have had to reduce staff numbers?

Quarterly reports prepared by the Central Statistical Office (GUS) on the socio-economic situation in Poland in 2020 clearly indicate that the year 2020 brought declines in employment in most areas of the national economy. However, they were most pronounced in entities providing services in the field of administration and support activities. It is worth mentioning that this section of the Polish Classification of Activities (PKD) groups entities dealing with, i. a., renting and leasing, maintenance of order in buildings and land development, activities related to employment, detective and security services, organization of tourism or activities of travel agents and brokers. Therefore, it is not surprising that under the conditions of further restrictions being introduced for, among others, the tourism and hospitality industry, as well as due to the increase in the share of remote working and the consequently reduced demand for office space, the number of employees in this section of the PKD in the whole of 2020 was lower by 5.4% compared to the level of employment recorded in this section of the PKD in 2019.

The CSO data clearly shows that 2020 brought declines in employment also in other PKD sections. Further - after administration and support activities - areas of the economy that decreased employment included mining and quarrying (by 3.6% compared to 2019), industrial processing (by 2.1% compared to 2019), manufacturing and supply of electricity, gas, steam and hot water, trade and repair of motor vehicles and real estate services.

However, some companies have experienced a marked surge in revenue and greater interest in the services they provide, which has forced them to significantly increase their workforce.

The fact that during the coronavirus pandemic we spend more time at home, often also making it our place of work, means that there is an increased demand not only for IT and telecommunication services but also for courier services and - which seems obvious - an increased demand for water and sewage and waste management services. This has not been without effect on employment in such sections of the PKD as information and communication; professional and scientific activities; transport and warehouse management; and finally - water supply, sewage and waste management, remediation. In all these areas of the economy, in 2020, employment growth was recorded, which - depending on the analysed sector - amounted from 1.8% (in transport and storage management) to 3.5% (in professional, scientific and technical activities).

 

Na zdjęciu dr Ewa Ignaciuk

Photo: Arek Smykowski/UG

Remote work, which we previously shunned so much, has become somewhat of a standard. This is just one of the solutions that have been adopted, forced on us somewhat by the pandemic reality. How do you assess it?

In my opinion, a positive effect of the pandemic will be that we will open up more widely to remote work. I am not just referring here to the solution that has already been present in our Labour Code for several years, which is telework, but rather I am referring to remote working, which - in contrast to telework - may be of a more irregular (non-systematic) nature and would not involve the necessity to communicate the results of work through electronic communication. This, however, requires a permanent (as the current solutions are temporary and were introduced only for the time of an epidemic threat or state of emergency) introduction of remote working as a form of telework into the legal order. However, in contrast to the crisis solutions currently in place, the right to request periodic remote work should apply not only to the employer but also to the employee. Undoubtedly, such a solution, which could be used not only for work requiring the use of electronic means of communication, would make it easier to reconcile family obligations with professional life. It would also be beneficial for people who have temporary difficulties in getting to their place of work or who simply wish to carry out their professional duties at home from time to time. The pandemic has shown us that this is possible and, under the right conditions, can be beneficial to both parties.

Remote work is definitely a convenience, often a comfort, but it also entails certain risks and difficulties - it requires specific conditions of premises, equipment, a different organisation of work. Not without significance is also the issue of communication - maintaining its fluidity and dynamics. Sometimes even the best tools are not able to replace "live" contact with another person - I wonder if this has any impact on the functioning of companies, their effectiveness, turnover, etc.?

Although, as I mentioned earlier, remote work could in some way make the Polish labour market more flexible in the future, in my opinion, in the post-pandemic period it should be an exception to traditional work. The difficulties that remote work may entail, especially if it is carried out over a long period, can be seen in the results of a study on remote work during the SARS-CoV-2 pandemic. I will first refer to the report prepared by dr Anna Dolot, who, while the first phase of the pandemic was still in progress (i.e. after only a few weeks of remote work), surveyed a group of 327 respondents to assess the advantages and disadvantages of remote work during SARS-CoV-2.

The data presented in the report clearly shows that most respondents perceive the problem of lack of direct contact with colleagues (almost 70%), blurring of the boundary between work and family life (about 50%) and the feeling of being constantly at work (40% of respondents). Similar problems associated with remote work were also indicated by the results of a survey conducted by Ipsos on adult workers employed in 28 countries (a total of 12,823 people surveyed). The survey, conducted between 20.11.2020 and 4.11.2020, found that 49% of respondents working remotely during the pandemic felt lonely and isolated, while 50% found it difficult to balance family life with work.

It is also worth noting another fact indicated by the respondents in both of the studies cited above, namely the lack of appropriate conditions for remote work at home (46% of respondents in the Ipsos study, 45% in the study by dr Anna Dolot). When talking about the conditions for remote work, one should take into account not only technical issues, related to having a properly equipped room but also the ability to focus on work, isolation from so-called home duties, etc. Recent months have shown us that this is no easy task. Creating fully hygienic and safe working conditions at home, as required for professional work, requires a great deal of knowledge and resources that are certainly not available to the majority of remote workers. Recent months have also shown how much of a burden it can be on household budgets to purchase additional office furniture, laptops, a more efficient Internet connection or to pay higher electricity bills for remote work. It is good if the employer feels obliged to provide employees with "company-owned" remote communication devices, or at least partially compensate them for the expenses incurred. But is this the case for most employers? This question remains open for the time being.

Dr Ewa Ignaciuk was interviewed by Elżbieta Michalak-Witkowska

Press Office of University of Gdańsk