Dual labour markets, minimum wage and inequalities - international conference - IBS

The international conference “Dual labour markets, minimum wage and inequalities”, organised by the Institute for Structural Research, was held in Warsaw on 8-9 October. The conference was attended by over 20 experts, representing international organisations and reputable research institutions. The first day of the conference focused on labour market duality, i.e. the negative consequences of abusing non-standard forms of employment, while the second day was devoted to minimum wage and income inequalities.

During the first session, on the causes of labour market duality, the current situation in the Polish labour market was discussed, with an attempt at identifying the causes of the widespread use of temporary contracts and assessing to what extent they represent a labour market dysfunction (Joanna Tyrowicz, University of Warsaw). The topic of instruments of employment protection and potential consequences of reducing the employment protection legislation in Poland was also addressed (Jörg Peschner, European Commission). Another presentation analysed economic arguments in favour of linking severance payments to the tenure and the impact of such solutions on remunerations and dismissals (Pietro Garibaldi, University of Torino, Collegio Carlo Alberto). Attention was also drawn to labour market reforms relevant for labour market duality, which have been implemented in European countries in recent years. Other factors related to the quality of jobs were also discussed, including economic uncertainty, business environment and skills composition of the labour force (Clemente Pignatti, ILO).

The second session of the first conference day was devoted to potential threats related to labour market duality. The example of Spain was used to show how facilitating the conclusion of fixed-term contracts in 1983 resulted in a long-term deterioration of employment opportunities and lower remunerations for people affected by this change (Jose Ignacio García Pérez, Pablo de Olavide University). Another presentation used an example from Germany to show that uncertainty related to employment under a temporary contract may influence fertility (Wolfgang Auer). The third session focused on solutions aimed at preventing labour market duality and mitigating its effects. One of the presentations pointed to threats related to a gap in the employment protection of people working under temporary contracts and permanent employment contracts, and argued for introducing a so-called single contract in countries struggling with the abuse of temporary contracts (Marcel Jansen, Autonomous University of Madrid). The potential impact of introducing a single contract in Spain on the economy was also analysed (Victoria Osuna Padilla, Pablo de Olavide University). Another presentation discussed the changes introduced in Slovakia in 2013 in order to limit the use of non-standard forms of employment, similar to the Polish contracts to perform a specified task (Peter Goliaš, INEKO). The last presentation discussed proposed solutions aimed at limiting the abuse of civil law contracts in Poland by introducing a single contract, changes in income tax and in the Labour Code (Piotr Lewandowski, IBS). The discussion held during this session generated a number of interesting ideas for overcoming the abuse of civil law contracts in Poland.

The first part of the second day of the conference was devoted to minimum wage. It was emphasised that the influence of minimum wage on the total employment rate in developed countries is limited, although it may be significant for selected groups of workers, while from the point of view of redistribution the minimum wage should be analysed in the broader context of fiscal and social transfer policies of the given country (Herwig Immervol, OECD). Attention was also drawn to the ongoing debate on a common EU minimum wage and the potential effects of such a solution; it was stressed that higher minimum wages are often accompanied by lower labour force coverage and use (Andrea Garnero, Paris School of Economics, SBS-EM). Subsequent presentations discussed the consequences of rapid minimum wage raises for the employment rate and structure in Poland (Piotr Lewandowski, IBS), the results of introducing a minimum wage in South Africa (Haroon Bhorat, Development Policy Research Unit Cape Town) and recommendations for fixing minimum wages in developing countries (Michael Weber, World Bank).

The last session was devoted to income inequalities. It was pointed out that income inequalities and the risk of poverty are heavily influenced by the distribution of professional activity over households (Wiemer Salverda, AMCIS University of Amsterdam). The potential influence of introducing a minimum wage of EUR 8.5 per hour in Germany in 2015 on income disparities was also discussed (Kai-Uwe Müller, DIW). Finally, there was a presentation of fiscal and social security solutions for Poland, which may function as work incentives for couples with children (Michał Myck, CenEA) and it was shown to what extent the social security system in Lithuania protects households against poverty in the aftermath of macro and micro economic shocks (Jekaterina Navicke, Vilnius University).

All presentations are available here.

The conference was attended by ca. 100 participants.

Session 1. Causes of labour market duality