Tripartite fails to reach consensus on minimum monthly wage

Photo: Khalil Baalbaki

A meeting of the tripartite – government, union and employer representatives – failed on Monday to reach a consensus on increasing the country’s minimum monthly salary. While all sides agree a rise is needed, the question is how high.

Photo: Khalil Baalbaki
Statistics earlier this year revealed that the average gross salary in the Czech Republic comes to more than 26,000 crowns per month. The country’s minimum monthly wage, despite a boost at the beginning of the year is only 9,900 crowns. The government wants to improve the situation: Labour and Social Affairs Minister Michaela Marksová has pushed for a rise of 1,100 crowns to make the minimum wage of 11,000 per month; Prime Minister Bohuslav Sobotka on Monday backed her proposal, stating reasons why.

“We need people who are employed, who commute to work, to have higher wages than those who have a tendency to try and ‘avoid’ work if they can.”

The government, in its coalition agreement, has committed to raising the minimum wage in line with broader wage growth: it has already boosted the wage twice, the last time at the beginning of this year by 700 crowns. But many still consider it not enough and even now there is no consensus on how high the next boost should go. Unions are asking for the wage to be increased to 11,500 – five hundred crowns more than the minister’s proposal. Union representative Josef Středula:

Josef Středula, photo: Filip Jandourek
“In the Czech Republic, the minimum wage is well below the poverty line; I think that it is possible for wage growth to still be sped up.”

Others in the government and in the tripartite disagree and reject hikes as high as that being considered. Employer representatives say firms cannot afford more than a boost of seven hundred to a total 10,600 crowns per month, and – on Monday – Finance Minister Andrej Babiš made clear he shared their view.

“If there is any rise, okay, fine, but it should be a reasonable one.”

Employer representatives themselves argued that anything beyond 10,600 would stretch firms too much and at least one party – the opposition Civic Democrats – argued a steeper increase would paradoxically hurt those the boost is intended to help, suggesting the higher minimal wage could lead to job losses.

Michaela Marksová, photo: Filip Jandourek
According to Czech TV, 115,000 people in the Czech Republic now work for the monthly minimum wage currently of 9,900 crowns. Labour and Social Affairs Minister Michaela Marksová:

“I think that 11,000 is an absolute minimum. It is a compromise which takes into account the requests of both sides.”

The government will return to the matter in September when it should also reach a final decision.