Average monthly salary up by 8.5 percent compared to last year
The Czech Statistical Office reports that the average monthly salary in the Czech Republic is now at CZK 31,516, an 8.5 percent year-on-year increase. Indeed, growth in salaries will experience a 15-year high in 2018 overall. However, experts say that wage growth in the private sector should decrease next year.
The median wage is growing even faster. Year-on-year change is as high as 9.8 percent. BH Securities economist Štěpán Křeček told Czech Television this is helping lower the gap between rich and poor, as salaries of those who are earning less is growing faster than for the wealthier half of Czech society.
The country currently boasts the lowest unemployment levels in Europe according to business intelligence portal Statista and economists are saying it is mainly the tight labour market that is driving companies to increase wages.
However, regional differences in salaries remain substantial in the country, with the average employee in Prague earning CZK 11,304 more than his or her counterpart in Karlovy Vary.
Economists warn this trend can lead to considerable depopulation of regions where earnings are lower.
Women’s salaries are also continuing to grow much faster than those of men, but still lag behind by around 4,600 crowns.
Analysts from Komerční banka told Czech Television that growth in salaries will continue. However, the pace of growth is expected to slow down, as decreasing profits will force business owners to lower bonuses.
Private sector salaries are expected to experience a decrease in growth, but public sector employees can look forward to an increase of more than 11 percent in 2019. The minimum wage is also expected to go up by 1,150 crowns.
This, according to the same Komerční banka analysts, will lead to salaries growing by 6.5 percent next year, although real growth is expected to lie at 3.9 percent due to increasing inflation.
Salaries have been increasing across the wider central European region, even reaching double-digit growth in the case of Hungary.