Shortage in the midst of plenty: Labour strategies in four Central and Eastern European cities

Labour shortage was an integral feature of the communist system of economic management and one that seemed most unlikely to persist in the face of systemic transformation. A casual examination of the unemployment rates that have emerged throughout most of Central and Eastern Europe (CEE) during the course of the past decade might suggest that this early assumption was correct. However, within the region the aggregate rate of joblessness, as well as the behaviour of national output, mask the fact that certain, major urban centres appear to have weathered well the storms caused by exposure to western markets and stringent fiscal and monetary policies. In these centres transformation has meant, to a greater or lesser degree, industrial modernisation and this begs the question of whether the human capital portfolios of the inherited labour force match up to the requirements of the new environment. This paper examines the meaning of the concept of labour shortage and presents the findings from a survey of employers in four leading cities of three major CEE economies designed to elicit if, and how, manpower requirements are being met in the present climate. The results indicate that, somewhat paradoxically, labour shortage persists in the more flexible markets of the post-communist era and that firms do not expect the situation to change radically in the near future. This revised version was published online in July 2006 with corrections to the Cover Date.