Skills shortages and real wages under pressure – the OECD Employment Outlook in Central and Eastern Europe

As real wages are under pressure due to rising inflation, many employers struggle even more than before the pandemic to fill open positions, in particular in low-paying service jobs. An important factor is reduced migration compared to pre-pandemic levels. Meanwhile, new OECD analysis shows that a considerable part of wage inequality comes from firms’ ability to set different wages for similarly qualified workers. Promoting firms’ productivity and worker mobility while reforming wage setting institutions can reduce wage inequality and strengthen economic growth. The recently released OECD Employment Outlook also shows that well-designed reductions in working hours with full wage compensation can be good for welfare and employment.

On 30 September 2022, we discussed how current labour market trends play out in Central and Eastern European countries and which policies can help address labour and skills shortages, while providing workers with good working conditions in a difficult context.

In a webinar organized in cooperation with the Institute for Structural Research IBS Warsaw, OECD analyst Oliver Denk presented the recent OECD Employment Outlook, complemented by an analysis by Iga Magda (IBS). In the following panel discussion, Sławomir Adamczyk (Solidarność, Poland), Vladimíra Drbalová (Confederation of Industry of the Czech Republic) and Ágota Scharle (Budapest Institute, Hungary) put the report’s findings into perspective and assessed the situation in Central and Eastern Europe. The panel discussion was moderated by Nicola Brandt (OECD Berlin Centre).

Video recording:

Presentation by Oliver Denk:

Presentation by Iga Magda:

Further readings:

OECD Employment Outlook 2022. OECD report (9 September 2022).

OECD Economic Outlook, Interim report 2022, Paying the Price of War. OECD report (26 September 2022).