Almost two-thirds of Czech employees don’t earn a minimum decent wage

Inflation and lower salary increases mean that more people working in Czechia can no longer maintain a basic standard of living.

Expats.cz Staff

Written by Expats.cz Staff Published on 19.04.2023 07:30:00 (updated on 19.04.2023) Reading time: 2 minutes

The minimum decent gross monthly wage for a full-time job to cover the needs of an adult with a child, free-time activities, and small savings was CZK 40,912 in the Czechia last year. In Prague, the decent wage amounted to CZK 42,776 mainly because of higher housing costs, economic experts from the group Minimum Decent Wage (MDM) announced.

In 2021, the minimum decent wage was CZK 36,717 in Prague and CZK 31,146 elsewhere in the country.

The share of jobs below the minimum decent wage has jumped up by about half compared to 2021 so it now makes up 63 percent of their total number. "In absolute terms, this jump represents an estimated 800,000 full-time jobs," economist Jan Bittner from the Prague University of Economics and Business (VŠE) said in a press release.

Wages growing slower than inflation

The reason for the jump is insufficient wage growth compared to high inflation. The minimum decent wage has reached the level of the national average wage, which was CZK 40,353 in Czechia last year. Most people earn below the average wage.

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"We are seeing political pressure for wages not to continue to grow at such a high rate because of the alleged threat of the wage-inflation spiral," Bittner said.

The minimum decent wage is calculated based on current prices. It shows the decent remuneration for a job in normal working hours to provide workers and their households with enough money to keep a certain basic standard of living as seen by most of society. It should be able to cover the costs of food and housing, clothing, transport, health care, education, and leisure-time activities and pay for other important expenses, including savings for unexpected circumstances.

Women more likely to be affected

Women are more likely to earn less than the minimum decent wage than men. This applies to 68 percent of women's full-time jobs and 53 percent of men's full-time jobs. This is due to the gender pay gap between men and women.

According to MDM experts, wages in Czechia are below the minimum decent wage due to the weaker position of employees.

"One reason that pressure for pay raises is lower in our country than elsewhere in the EU is our relatively low share of employees organized in trade unions. The weak position of workers also depends on bargaining in our country taking place mainly at the company level and not at the sector level, which is common in Germany, for example," said Katerina Smejkalova of the Friedrich-Ebert-Stiftung.

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