A richer Poland is no country for liberalsOctober 11, 2019
In Sunday’s national election, Poland’s ruling Law & Justice party will without a doubt come first by a large margin. If it can secure a majority, as it did in 2015, Poland’s shift toward nationalism and conservatism and away from liberal democracy is likely to become as lasting and profound as Hungary’s. But the party of Prime Minister Mateusz Morawiecki is not winning on populist rhetoric. Its strength comes from a strong economic record and a history of keeping important social promises.
In 2015, Law & Justice, known as PiS in Polish, won almost 38% of the vote, well ahead of the then discredited ruling party, the Civic Platform, by promising generous social spending. After building a majority in parliament, it delivered by introducing what it called the 500+ program: Families started receiving 500 zlotys ($128) a month for the second child and each consecutive one. For low-income families the benefit kicked in after the first born. The payment, equivalent to about 12% of the average gross wage in 2016, changed the lives of many poorer Polish families.
Law & Justice’s opponents argued the government would only be able to fund the generous giveaway with big deficit spending. But the nationalists proved to be sound economic managers. By improving tax collection and slapping additional taxes on the financial sector and the highest incomes, the government actually cut the budget deficit to 0.4% in 2018 from 2.7% in 2015. In large part thanks to increased consumer spending, Poland’s economic growth sped up to 5.1% last year from 3.8% in 2015.
The biggest constraint on growth today is a labor shortage. Unemployment is down to 3.3% from 8.2% at the beginning of 2015. But this shortage has driven up wages, which has contributed to Poles’ increased feeling of prosperity. To keep the wage growth from getting out of hand, the government has relaxed visa rules for workers from neighboring Ukraine, whose economic mismanagement has provided Poland with a near-unlimited pool of relatively cheap labor.
In July, the government expanded the 500+ program, making the monthly payment available to all families with children from the first born. Again, it faced criticism. Detractors say the program has failed to increase birth rates (the government disputes that), pushed some 100,000 women out of the workforce and squandered money on helping families that didn’t need the support while burdening others with tax increases. But none of these arguments make much sense to voters, and they don’t seem to have any major objections to Law & Justice’s plans for more taxes and social…