Company profits show healthy growth but pay rises lagging for now
While Czech companies have seen healthy growth in their profits in the last year and a half, their employees have seen little change in their pay packets, Hospodářské noviny reported on Monday. Firms are instead opting to reinvest their gains or use them to cover losses sustained during the crisis, the business daily said.
The prime minister, Bohuslav Sobotka, is in favour of workers benefitting sooner. If companies’ profits are rising thanks to current prosperity they ought to share them with their employees, he said.
The growth of the Eurozone economy, and especially the German economy, will help export firms in particular to grow, Česká spořitelna bank analyst Jan Šedina told Hospodářské noviny.
Mr. Šedina said the Czech National Bank’s intervention to weaken the Czech crown against the euro in November 2013 was one reason that Czech industrial producers had seen a boost in profits.
The chief economist at ČSOB bank, Petr Dufek, said companies were opting to cover losses sustained in the preceding years rather than pass profits on to staff. They have also begun investing more, as evinced by data from the Czech Statistics Office.
Firms in the Czech Republic mainly invest using their own money and do not make great use of bank loans, ČSOB’s Petr Dufek told Hospodářské noviny.
Jan Šedina of Česká spořitelna said the problems experienced by the Czech economy in recent years, including a rise in joblessness, had led employees to become nervous of making strong wage demands.
The unions are also unimpressed with the situation, Hospodářské noviny reported. The chief economist of the Federation of Trade Unions, Martin Fassmann, said his organisation had recommended that members push for “fully justifiable” 5 percent pay rises, but so far this year increases had not even reached 2 percent.
State employees will drive overall pay growth next year. They have already been promised rises of at least 3 percent.