The Holiday

The Polish Labour Code grants most employees (subject their having worked the required number of years) annual paid holiday of 26 days. In addition, this year there will be 13 days of public holidays in Poland which is more or less the European average. Poland is well behind Belgium which enjoys 24 days but ahead of England, Germany and the Netherlands which enjoy only 9 days. Of these public holidays, two occur at the beginning of May in Poland: May Day on the 1st and on the 3rd Constitution Day to celebrate the Polish Constitution of 3rd May 1791, one of the first constitutions of its type in Europe. What makes next week so notable is that 2012 is one of those years in which 1st May falls on Tuesday and 3rd May on Thursday. This leads to the inevitable result that in effect the whole week becomes a holiday as those who are able take the additional days off.

Quite by co-incidence, as this piece is being written, the Chinese Premier Wen Jaibo is visiting Poland with a large delegation of ministers and businessmen. China’s stated aim is to double the value of bilateral trade with Poland over the next five years which trade is very much in China’s favour: in 2011 Polish exports to China were worth EUR1.35 billion but Chinese exports to Poland were worth ten times more at EUR13.2. Poland hopes to be able to sell more commodities to China as well hoping for more Chinese investment in Poland with Poland becoming a hub for Chinese investment in the region both of which would help to develop Poland’s economy.

And how are these events connected? Put simply, it seems unlikely that Chinese workers will be contriving a week’s holiday next week. And while I would not for one moment suggest that the conditions for workers generally applying in China be replicated in Poland – or elsewhere in Europe – there clearly is a need to address the growing social costs in Europe and the resulting lack of competitiveness compared with the increasingly dynamic economies of China and elsewhere in Asia. At its simplest I cannot build a factory in Poland, employing Polish workers to supply goods to Poles unless I comply with myriad labour regulations. However, if I locate the same factory in China where labour regulations are less restrictive, I can supply the same goods at a much lower price. I have access to the Polish market but Poland does not have the same access to taxation of my profits nor employment opportunities for Poles (and this applies anywhere in the EU). And if these goods come at the price of higher taxes to support the increasing numbers of unemployed are the goods really cheaper?

Free trade – you and I sell goods to each other without the governments interfering – is good but is globalisation really anything more than producers shifting the costs of production to the taxpayers of the countries they are abandoning in the pursuit of ever cheaper labour? And ultimately how will our unemployed afford these cheap goods anyway? I do not know the answers but I’d welcome yours. That’s something to think about while you enjoy the holiday.

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