ABSTRACT
Most of the Central and Eastern European transition countries including Poland have been faced with high rates of unemployment, falling wages, increasing inequality and job insecurity. A commonly held view is that these problems in the labour market are the unfortunate but necessary steps in the transition to a market economy (Timar, 1995; Godfrey, 1995). Others argue that the adjustments could be eased by a better choice of economic policies (Murrell, 1995). In both cases, however, the underlying assumption is that these problems are transitional or temporary, and that ultimately the labour market will operate smoothly and become self-adjusting. This is a familiar notion to labour economists in the United States and Western Europe as well. The existence and desirability of a free labour is taken for granted. The only dispute is over 'how to achieve it'. In other words, all roads lead to Rome, the question is which road to take.
