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Ukrainian Mobilization Law and the Polish Issue: Experts Reassure Stability of Our Labor Market

ECONOMYUkrainian Mobilization Law and the Polish Issue: Experts Reassure Stability of Our Labor Market

According to economists, the recently introduced mobilization law in Ukraine will not significantly impact the labor market in our country. Although some Ukrainians may leave Poland, it won’t be a substantial outflow. If mass departures were to occur, the solution would be to seek workers from other countries. However, this process should be conducted in cooperation between the state and employers to minimize potential abuses. Furthermore, experts address the projected increase in labor costs following the departure of Ukrainians, reassuring employers that even if Ukrainians were to leave en masse— which seems unlikely— we would still manage.

Labor Market Mobilization

Ukrainian citizens have until July 17 to update their data, including those registered for military service, such as men aged 18-60. If those abroad do not complete the formalities, they will have limited access to consular services. This is according to the Ukrainian mobilization law, which has been in effect since May 18, 2024. There are public opinions that these effects will be felt by employers in Poland. According to Prof. Stanisław Gomułka, chief economist of BCC and former Deputy Minister of Finance, these regulations will not significantly worsen the labor market situation. Currently, there are many women from Ukraine in our country, who practically do not serve in the army. Some men may leave, but a significant outflow is not expected.

“This is reminiscent of the discussions right after Russia’s invasion of Ukraine and the large wave of Ukrainian war refugees seeking shelter in our country. Back then, the media were full of alarmist opinions that the influx of Ukrainians into the Polish labor market would lead to a lack of jobs for Poles and would also drive wages down. This scenario did not come true; in fact, the opposite happened. Employment increased, and job offers grew. Nominal wages also increased. Although high inflation temporarily had a negative impact on their real level, the high wage dynamics still persist, currently affecting both nominal and real wages,” comments Prof. Elżbieta Mączyńska, honorary president of the Polish Economic Society.

Prof. Witold Modzelewski, former Deputy Minister of Finance, emphasizes that Ukrainians fled to Poland not only from the war but also from poverty and their oppressive state. They decide where they want to stay. These are their choices, and we—as a country—should not judge this at all. It would be best to maintain neutrality in this regard. Moreover, any statements about Poland deporting them are very poorly received. The expert advises maintaining the right to hospitality.

“I do not think our authorities will conduct any so-called ‘hunt for Ukrainians.’ We are more aware that more of them might leave Poland. But entrepreneurs do not have much reason to fear. Of course, I am not discussing whether such a law is necessary from the point of view of the war or not. We are focusing only on issues related to our economy,” analyzes Prof. Witold Orłowski, chief economic advisor at PwC.

Seeking Replacements

There is also the question of whether Ukrainians leaving Poland en masse could be quickly and efficiently replaced by other nationalities. According to Prof. Modzelewski, there is no chance of such a replacement. Once, there was consideration of Belarusians because they also had the desire. However, the situation has changed, and we have created new barriers. According to the former Deputy Minister of Finance, the interest of Poland should guide us in this matter. This is now the most important thing for us.

“If for some reason there was a significant outflow of Ukrainians from Poland, our companies would probably feel it, for example, in construction. Although I do not rule out that we often deal with work in the grey zone, so changing the official employment status would not be that noticeable. If we had to replace them with workers from other countries, it is technically possible. We could attract more immigrants from more distant countries, although it would not lead to such a massive influx of legal workers as in the case of Ukrainians. However, Poland is already an attractive place where we would find people willing to work in various countries,” adds Prof. Orłowski.

Prof. Gomułka points out that even in smaller towns, citizens of Central Asian countries, such as India or Afghanistan, work. According to the BCC expert, the number of such people may increase because they receive salaries here that are multiple times higher than in their homelands. The labor supply is very large. As the former Deputy Minister of Finance argues, the current government’s immigration policy will be essential. And if there are no radical restrictions, there will be an influx of immigrants, although not on the scale seen in southern European Union countries from Africa.

“If we talk about the possibility of replacing Ukrainians in our labor market with immigrants from other countries, it is essential to emphasize that this process requires well-thought-out regulations and cooperation between the state and employers’ organizations. It is especially important to avoid situations where people receiving a visa allowing them to come and work in our country do not report to work after arrival. They move to other countries, primarily the Schengen area. Therefore, systemic solutions and regulations regarding immigrants and their employment are necessary to prevent such potential abuses,” says Prof. Mączyńska.

Impact on Labor Costs

There are also opinions that the possible mass departure of Ukrainians will contribute to increased labor costs. Prof. Mączyńska emphasizes that immigrants are often cheaper workers than Poles. Research shows that newcomers often and out of necessity accept jobs below their qualifications. They also frequently take positions that our citizens are not interested in. If they leave Poland, employers will be forced to increase wages to attract new workers. This translates into wage growth, which has been particularly dynamic recently.

“There should not be significant problems in the labor market, among other things, due to the situation in agriculture. In the coming years, the main producers of agricultural products will still be farms with an area above 50-60, or even 70 hectares. There are few of these, and we have many small ones, up to 10 hectares. In the latter, labor productivity remains low, so especially young people will seek jobs outside agriculture. They will start moving to cities,” analyzes the chief economist of BCC.

Prof. Modzelewski argues that expensive energy, high labor costs, and lack of workers are killing Polish entrepreneurship. We are already experiencing mass suspensions or closures of businesses, and we still have July 1, when energy and gas prices will rise. Later, there will be a cost catastrophe related to the Green Deal, although recently part of the political class, under criticism, has suddenly become its opponents. We will see how much of this is a campaign narrative and whether there will be another change in position after the European Parliament elections. The expert emphasizes that Polish entrepreneurs have been treated most restrictively since 1989.

“We are constantly dealing with rising labor costs, influenced by various factors. Undoubtedly, a sudden outflow of Ukrainians from our labor market would result in raising the prices of many services. However, I repeat— I cannot imagine that mass departures to Ukraine or other countries would occur overnight,” concludes Prof. Witold Orłowski.

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