Czech wage growth drops to .5%, average earnings down 2.5% year-on-year after inflation

Real earnings after inflation were down in the second quarter of 2020 for the first time after seven years of continued growth

Jason Pirodsky

Written by Jason Pirodsky Published on 03.09.2020 12:34:53 (updated on 03.09.2020) Reading time: 2 minutes

Czech wages grew 5% in the first quarter of 2020 up to an average salary of 34,077 crowns monthly, but that growth has come to a sudden halt according to data released today by the Czech Statistical Office.

Czech wages rose just .5% year-on-year in Q2 2020, largely due to effects of the COVID-19 pandemic that are expected to linger in the Czech employment sector throughout at least the end of the year. The average salary in the Czech Republic now stands at 34,271 crowns per month.

Taking inflation into account, Czech salaries have dropped 2.5% in real terms in Q2 2020, the first dip after seven years of continued growth.

Given the worldwide COVID-19 pandemic, however, experts point out that the decline in Czech salaries is only a moderate one.

“Taking into account the unprecedented economic downturn that the Czechia and the rest of Europe are going through, the decline in real wages can be considered quite moderate,” Raiffeisenbank analyst Vít Hradil stated in a report.

Czech employees were protected from a more dramatic downturn in wages by the previously competitive situation on the labor market, which had long-term shortages, this year’s increase in the minimum wage and salaries in the public sector, as well as costly government support programs.”

Some sectors were hit much worse than others. In the gastronomy and hospitality fields, which already feature some of the lowest average salaries in the Czech Republic, mean wages were down by more than 10%, to an average of under 18,000 CZK monthly.

Salaries in the Czech real estate sector dropped 5.7% in the second quarter of 2020, while the manufacturing industry saw a 4.9% fall in average earnings.

Not all salaries in the Czech Republic saw a decline, however; the rich got richer as average wages in some of the highest-paid Czech professions saw a moderate increase.

Average monthly salaries rose by 3.5% in the IT sector, to 60,084 crowns; by 5.1% in public administration, to 40,789 crowns; and by 5.3% in the energy sphere, to 49,479 crowns monthly.

Across the Czech Republic, the highest salaries remain to be paid in Prague; average wages in the Czech capital rose .6% year-on-year to 42,435 crowns per month. The lowest salaries are in the Karlovy Vary region, which saw no percentage year-on-year change at 29,521 crowns monthly.

  Q2 2020 Q2 2019 % Change
Prague 42 435 42 191 0.6
Central Bohemia 36 134 36 260 -0.3
CZECH AVERAGE 34 271 34 105 0.5
South-Moravia 33 049 32 582 1.7
Pilsen Region 32 681 32 945 -0.8
Hradec Králové 32 521 32 665 -0.4
Ústí nad Labem Region 31 922 31 187 2.4
South Bohemian Region 31 194 30 706 1.6
Olomouc Region 30 802 30 512 0.9
Vysočina Region 30 971 31 124 -0.5
Moravian-Silesian Region 30 793 30 915 -0.4
Liberec Region 30 819 31 706 -2.8
Pardubice Region 30 575 30 206 1.2
Zlín Region 30 105 30 228 -0.6
Karlovy Vary Region 29 514 29 521

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