Double digit pay rises make waves in state and private sectors

Wage increases of 10 percent, way ahead of inflation, are now being pledged by some political parties for Czech health workers as well as teachers. And such sizable increases have also been seen in some of the most dynamic parts of the private sector as well.

Photo: Filip Jandourek

Cynics might say it’s the looming Senate and regional elections, others might point to an effort to share out fruits of recent Czech economic success. Either way, workers, at least some workers, stand to benefit.

The latest group being lined up for a sizeable pay increases are health workers. Prime Minister Bohuslav Sobotka stressed during his party’s traditional celebrations of May Day that he wants doctors, nurses, and other health workers to benefit from 10 percent pay rises from the start of 2017.

Most political parties appear to be reading from the same pay increase sheet for health workers. The big question though has been whether ANO leader and Minister of Finance Andrej Babiš would join the chorus. And in recent comments on Czech Television after visits to several hospitals and talks with staff and management, a not very healthy sounding Babiš, suggested that such increases appeared possible.

“Doctors certainly deserve an increase in pay – 10 percent why not? The question is where can we find the money.”

Andrej Babiš, photo: Filip Jandourek

The finance minister is often keen to highlight black holes in the health service and complains that too much money is being spent on fancy equipment rather than staff and that the whole health sector needs radical reform.

The push to boost pay in the health sector comes against a backdrop of a shortage of doctors and nursing sisters. The Czech Chamber of Doctors says there is a shortfall of around 400 doctors at hospital emergency services. Qualified staff are often seeking jobs abroad and services are being patched up with overtime and many older doctors working long after retirement.

Promises of 10 percent pay increases next year have already been made to teachers, traditionally amongst some of the worst paid graduates in the state sector who traditionally lack much negotiating muscle.

And in the private sector too there have been some breakthroughs in wage bargaining. The country’s biggest car maker and leading exporter, Škoda Auto, at the end of April agreed a new deal which unions say will increase average wages by around 11.2 percent. Bosses at the German owned manufacturer said they wanted to thank the workforce for past efforts and lay the foundations for future stability.

Photo: archive of Škoda Auto

But in large swatches of the Czech economy wages are far from rising at double digit rates. The Czech National Bank has repeatedly complained recently that wages are not rising strongly enough to help push inflation up towards its target of 2.0 percent annual growth.

Throughout much of last year average wage rises in the private sector were between 3 and 4 percent with the average wage ending the year at just over 28,000 crowns. This year and next the central bank hopes predicts wages should rise by around 4.7 percent as unemployment continues to shrink.