Catherwood LibraryILR School

Eastern Europe faces eroding profits as the traditional business model of cheap labor which worked well during the transition from communism is less dependable now due to a growing skilled labor shortage that impedes production progress. Poland, the region’s largest economy, has an unemployment rate that is at its lowest since 1991, with more than 2 million Polish employees working abroad due to lower wages at home. The average annual salary in Poland is $25,921, compared to $46,389 in neighboring Germany. 51 percent of Polish employers reported having difficulty finding employees this year, an increase of almost 16 percent from last year, with an accompanying rise in work backlogs for Polish manufacturers for the first time since February 2015. The unemployment rate of 4.8 percent in July increased wage pressure, boosting wage increases by 5 percent per month, the fastest increase in six years - one company raised salaries for the third time in one year. Robotic technologies can boost production for a home-building company by an additional 200 houses per year, along with cutting manpower hours from 1000 to 350, but the problem lies in having enough skilled labor to manage the new technology. Employers are implementing job training programs as well as actively seeking employees from the Ukraine and Belarus; more than 1 million Ukrainians work in Poland, many seeking escape from civil war.