The Basic Trends of the Labour Market and Wages in Poland in the Years of Inflation (1918-1923)

Abstract

The labour market and wages in the period of inflation in interwar Poland have been studied mainly in the context of macroeconomic stabilization, but the mechanisms by which inflation affected the real purchasing value of workers' wages and the social consequences of unemployment have not been comprehensively analyzed for the full period from independence to the monetary crisis of 1923.
This article examines the basic trends of the labour market and wages in Poland during the years of inflation (1918-1923), analyzing the dynamics of unemployment, the relationship between nominal wages and real wages, and the role of collective bargaining agreements in shaping workers' living conditions.
The study draws on official statistical sources – reports of the Ministry of Labour and Social Welfare, data of the State Labour Exchange, records of the Council of Ministers preserved in Archiwum Akt Nowych – as well as published wage indices and investigations of the costs of living in various regions of Poland, including research by Drecki, Derengowski, and Rychliński.
The analysis shows that in 1918-1921 unemployment, though severe immediately after independence, declined rapidly due to the Polish-Soviet War and reconstruction of industry, while real wages rose significantly. From 1921 onwards, however, accelerating inflation caused nominal wages to rise more slowly than the costs of living, producing a sharp fall in real purchasing value. Collective bargaining agreements incorporating the moving wages scale offered only partial protection against this erosion. By late 1923, individual real wages had fallen close to their 1918 starting level, contributing to the economic crisis and the intensification of class conflict. The article argues that moderate inflation (1918-1921) had a stimulating effect on the Polish economy, while the hyperinflation of 1922-1923 was the primary cause of workers' pauperization.