With COVID-19 bringing an economic crisis and mounting unemployment to Poland, experts forecast a dramatic drop in remittances from Ukrainian migrants working in the European Union country.
According to Lukasz Kozlowski, chief economist at the Federation of Polish Entrepreneurs, it could lead to a loss of $4 billion in remittances to Ukraine in 2020.
If the unemployment rate in Poland exceeds 10%, he says, Ukrainian workers will have a much harder time finding permanent work there, rather than seasonal jobs. That, in turn, would lead to a 20-30% decrease in remittances to Ukraine.
In 2019, foreign remittances reached $12.9 billion, providing nearly 10% of Ukraine’s gross domestic product.
Kozlowski made these estimates during the online meeting “Migration and remittances – impact of COVID-19 pandemic” on May 14, which was organized by the Center for Social and Economic Research (CASE) think tank.
That wasn’t the only bad news for remittances. Nearly 12% of Ukrainian workers have left Poland since the beginning of the global COVID-19 pandemic. And that number could be higher if seasonal workers are included. They too will contribute to the remittance shortage.
Most Ukrainian workers in Poland work in the industrial, construction and transport sectors, but many of them have already lost their jobs. It is “not that easy for them to find another job,” Agnieszka Kulesa, an economist at CASE, said.
She says Ukrainian workers in Poland have been metaphorically “abandoned on a crowded island.”
Rising unemployment means more people will be looking for a limited number of jobs in the country. Although the Polish government allowed Ukrainian workers to extend their stay and their work permits, they are de facto “abandoned.” They enjoy fewer rights and opportunities in the country.
“What we are observing now is just the beginning. We have no clue how the situation will look in a couple of months,” Kulesa said.
According to Kozlowski, Polish industrial companies intend to decrease the number of their employees. Ukrainian workers might be the first ones to have their contracts terminated since it is much more difficult to dismiss domestic workers.
“If you want to react in a very flexible manner, you lay off those workers most easy to fire,” he said. “And these are Ukrainians.”
At the same time, the Polish agrarian sector will still need 150,000 seasonal workers, mainly from Ukraine, even if domestic unemployment increases.
Otherwise, the industry will face a “very severe crisis” trying to attract and use domestic workers in this sector, Kulesa believes.
“You need experienced people who know how to do their job,” she said.
A recent situation in the United Kingdom demonstrated this clearly. Lacking foreign workers, British farmers asked locals for help. But there was a problem: British workers were much less efficient than seasonal workers from abroad.
“This is the key problem,” Kulesa said. “You need hands, not just a number of people.”
Despite the challenging economic situation in Poland at the moment, the Polish experts are more optimistic about next year. But there are still fears that COVID-19 could reappear in autumn and the quarantine measures will return.
“But everyone hopes for the better in the nearest future,” said Dmytro Boyarchuk, executive director of CASE Ukraine.
