Czech wage rises continue apace, low earners seeing larger increases

New figures show Czech wages rising across the board. And it appears that many in traditionally low earning jobs are seeing proportionately bigger wage increases.

Illustrative photo: Ondřej Šponiar / Pixabay, CC0

Preliminary figures from the Czech Statistical Office have confirmed the ongoing surge in wages for most Czechs. The numbers for the third quarter released on Monday show average gross wages rose by 6.8 percent from June to September compared with the same quarter a year earlier. When the impact of inflation – still above the central bank’s target figure of 2.0 percent is factored in - that represented a real wage increase of 4.2 percent.

The latest figures represent a bit of a slowdown compared with the second quarter when wages climbed by 7.6 percent and are slightly lower than most analysts and the Czech National Bank had forecast. After subtracting the effects of inflation that meant a real gain of 5.3 percent. The average wage rise for the first nine months of the year has come to 6.6 percent with the real wage rise adding up to 4.1 percent.

Monday’s statistics give the nationwide average monthly wage for the latest period at 29,050 crowns, just over 1,800 crowns higher than a year earlier. Some analysts expect the 30,000 crowns average to be surpassed in the final quarter of the year thanks to some pay increases of up to 10 percent in the public sector and wage hikes in the private sector.

The median wage, that midway between the highest and lowest levels, comes in at a lower 25,181 crowns but the average annual rise is a higher 7.1 percent. This suggests that many of the lowest earners in the economy are seeing bigger wage rises.

Dalibor Holý at the statistical office said some of the lowest earners were seeing rises:

"Basically, lower wages are climbing more than higher ones. We are seeing rises across the board with the lowest rate of wage rises though in the insurance and financial services sector. Some of the highest are in the accommodation and catering sector."

Photo: Filip Jandourek, Czech Radio

The rate of wage rises in traditional low paid hotels and catering sector stands at 10.3 percent and for health and social services at 9.7 percent. Meanwhile, manufacturing industry is still above average at 7.2 percent, transport and warehouse work have seen wage rises averaging 8.0 percent, and wholesale and retail sales at 7.4 percent. In the financial sector wage rises average less than 2.5 percent.

But there are differences between jobs, between men and women, and between regions. The median wage for men in the latest quarter is 27,486 crowns and for woman 22,584 crowns, reflecting both gender differences in pay for the same job and the fact that women are often employed in low paid service jobs and fail to occupy top management positions.

With Czech economic growth at 5.0 percent in the third quarter, it’s clear that many employers are having to dig into their profit margins or put up prices to customers to afford the pay increases many are offering.