Populist Economic Policy Hits Limit in Polish Teacher Strike
Populist Economic Policy Hits Limits in Polish Teacher Strike
(Bloomberg) -- Poland’s government is hitting the limits of a populist economic program that has boosted voter support but left little extra to pay for the rising cost of running a country.
With two elections approaching this year, a strike by 600,000 teachers and education personnel now into its fifth day is underscoring the ruling Law & Justice party’s dilemma. Millions of people have been forced to take their children to work, or set up makeshift daycare centers, as opinion surveys published in past days show that about half of Poles back the biggest school protest in a quarter century.
The government has rejected educators’ wage demands, saying it has "exhausted" its room for maneuver after rolling out programs aimed at its core electorate of families and pensioners and farmers, who it’s now offering subsidies for livestock.
“For many, the message is clear -- government has cash to throw at cattle and pigs but nothing for teachers,” said Anna Materska-Sosnowska, a political scientist at Warsaw University. “This may impact elections.”
Populist governments from Rome to Bucharest are increasingly struggling to meet pledges to raise social spending without breaking European Union rules that cap budget deficits. While Law & Justice has touted its approach as driving an "economic miracle" that has boosted living standards, its refusal to raise educators’ pay may trigger a backlash in European Parliament elections next month and a general poll in the fall.
While Poland’s economy is one of the EU’s fastest-growing -- it expanded 5 percent last year and is on track to grow about 4 percent in 2019 -- the budget deficit is set to jump to around the EU’s 3 percent of gross domestic product ceiling this year and next due to the stimulus. The largess triggered a row which may cost the finance minister her job.
Regional peer Romania is also pushing up against the EU limit after the government repeatedly cut taxes, raised the minimum wage and boosted pay for state workers, while Italy just raised its projected budget deficit, setting the stage for a conflict with Brussels.
“Our budget possibilities have been exhausted for now,” Prime Minister Mateusz Morawiecki told public television this week, when asked about the strike.
The conflict with teachers has been brewing since January. They made initial demands for salary hikes worth 17 billion zloty ($4.5 billion) a year before Law & Justice announced a 40 billion zloty stimulus package for people with children and the elderly, which was followed by the farm proposal.
“The government has found itself in a clinch,” said Jaroslaw Janecki, the chief economist at Societe Generale SA in Warsaw. “It can’t back out of election-year stimulus plans for fear of reputation damage, while it has very limited room to succumb to special interest groups.”
Poland has one of the lowest salaries for primary-school teachers within the Organisation for Economic Co-operation and Development. An educator with 15 years experience earns the equivalent of $25,553 a year in Poland, adjusted for purchasing power, compared with the OECD average of $40,436.
The head of the main teachers’ union, ZNP, said on Friday that the government is only “simulating dialog” with the protesters. He said there hasn’t been a new offer from the government since Sunday, when it struck a deal with the teachers’ arm of the Solidarity union, which is run by a former member of the ruling party.
Election Backlash?
Law & Justice is at the forefront of a political drive bridling against the EU’s multi-cultural and liberal values. As part of that movement, it has polarized Polish society by vilifying as “self-serving” political elites, greedy bankers, corrupt judges, and even gays and Muslim refugees who it says pose risks to Poland’s traditional Catholic values.
Now it’s lumping teachers into the cohort of elites, but with classes curtailed at three quarters of Poland’s schools, the government’s “negative campaign against teachers is risky,” said Marcin Zaborowski, a senior associate at think-tank Visegrad Insight.
The party is not backing down, and has even argued last month that there’s a simple way for educators to take part in government largess: have more kids.
"Teachers aren’t required to live in celibacy," said Krzysztof Szczerski, who runs the office of President Andrzej Duda. "Payments for Polish families are also available for them."
To contact the reporters on this story: Marek Strzelecki in Warsaw at mstrzelecki1@bloomberg.net;Dorota Bartyzel in Warsaw at dbartyzel@bloomberg.net
To contact the editors responsible for this story: Andrea Dudik at adudik@bloomberg.net, Wojciech Moskwa, Andras Gergely
©2019 Bloomberg L.P.