Already slowing wage growth likely to be held back further by crisis

Siemens in Tschechien (Foto: Michal Polášek, Archiv des Tschechischen Rundfunks)

The average monthly salary in the Czech Republic reached CZK 34,077 in the first quarter of 2020. That was an increase of 5 percent year-on-year on the figure in the same period last year, the weakest such growth since 2016. And the advent of the coronavirus crisis means wages are unlikely to increase significantly any time soon, iDnes.cz reported.

The inflation rate in the first quarter means that real wage growth in the Czech Republic was only 1.4 percent, the lowest level recorded since the close of 2013, the news website said.

Prague residents, continuing a tradition of many years, received the highest salaries, with an average of CZK 42,760 in the January to April period.

The lowest pay – CZK 29,687 – was received in the Karlovy Vary Region. Men and university graduates were the biggest earners, iDnes.cz said.

Photo: Miloslav Hamřík, Pixabay / CC0

Most workers do not reach the average wage and the common wage level is better expressed by the median wage.

In the first quarter, the median wage was CZK 29,333 a month, which was CZK 1,602 (and 5.8%) higher than in the same period of the previous year.

However, no fewer than one in 10 employees received earnings below CZK 15,761, while the tenth at the other end of the scale received wages of above CZK 53,850.

Many Czech employers made cost-saving measures in April and May, iDnes.cz said, citing a survey from the company Randstad. Roughly one in 10 reduced the basic salary of employees, though the rate of wage cuts varied greatly: almost one-third saw reductions of 5 percent or less, but another third lost a full 30 percent or more.

Tomáš Ervín Dombrovský from the company LMC told iDnes.cz that only 42 percent of economically active people had the same earnings at the end of May as before the crisis, though in most cases those affected experienced only temporary reductions in income.

Experts surveyed by iDnes.cz said that drastic changes in salaries had not been seen and were unlikely to be. František Boudný, director of HR company Předvýběr.CZ, said employees would not be bringing up pay rises in the coming months, while bosses would neither raise nor reduce salaries.

Sándor Bodnár of Hays told the news site that a higher number of free candidates on the labour market would spell a natural reduction in pressure on wage growth.

But Tomáš Ervín Dombrovský of LMC said that in the long-run he expected a return to salaries comparable to those before the crisis. In the next year or two wages will rise again somewhat, although by no means as quickly as in recent years, he told iDnes.cz.