Credit: CG/BD

Czech “Minimum Decent Wage” In 2023 Was CZK 45,573, Says Expert Group

The minimum decent wage for full-time work in the Czech Republic last year, to cover the needs of an adult with a child, leisure time and small savings, was CZK 45,573 pre-tax, as calculated by a team of experts who carried out the research, speaking to reporters today.

However, 67% of employees in the Czech Republic were paid below this sum in 2023, they added.

In Prague, the minimum decent wage was CZK 47,718 last year, due to higher costs.

The expert platform took into account the cost of food, housing, clothing, transport, health, education, mobile phones, the Internet and a small financial reserve, as well as price increases.

The minimum wage was CZK 17,300 last year, while the national average wage was CZK 43,341 and the median was CZK 37,227, according to the statisticians.

“The minimum decent wage is a tool that can be used very well to grasp the crisis of purchasing power that we are still facing after a dramatic inflation wave, although inflation has fallen to normal levels,” said political scientist Katerina Smejkalova. “The average wage or median wage says nothing about how to live on these sums. They say nothing about the spending side. We are not only counting bare survival, but also something extra.” 

More than 20 experts on social issues, economists, sociologists and political scientists have been collaborating on the calculation of the minimum decent wage since 2016, using data from the Czech Statistical Office (CSU), ministries and other institutions. They calculated the remuneration for a full-time job for a person who is supporting another person – a child or an adult. They published the figure for the first time in 2019.

Last year, the minimum wage in the Czech Republic rose by 11% year-on-year. Experts calculated the monthly expenditure on housing (CZK 14,713), on food (CZK 8,194), on clothing and footwear (CZK 1,460), on transport (CZK 1,946), on health and hygiene (CZK 1,348), on telecommunications (CZK 1,446), on leisure (CZK 3,774), and on savings (CZK 4,597).

In Prague the amount for housing was CZK 16,133 and for food CZK 8,442. The minimum decent wage in the metropolis rose by 12% last year compared to the previous year.

According to economist Jan Bittner, the minimum decent wage rose roughly in line with inflation last year. Earnings, however, increased significantly less.

“A total of 184,000 people fell below the threshold year-on-year, because their costs rose faster than their wages,” Bittner said. Overall, about 2.7 million employed people (67%) are below the decent earnings threshold. Last year, the figure was 63%, and before the cost-of-living crisis it was 41%, he said.

57% of employed men and 71% of women earn below the calculated minimum decent income. The reason for this difference is the gender pay gap. In social services, 92% of workers were underpaid, while 70% were underpaid in labour offices.

According to social anthropologist Lucie Trlifajova, the Czech Republic has experienced the biggest decline in real wages in the EU. Its earnings convergence with Western wages stopped in 2019, and the “wage iron curtain” has become even stronger in the past two years. Even with low unemployment, the standard of living is not rising, the number of food bank clients is increasing, some households are not saving and are running into debt, and stress is reflected in the health and school performance of children, she warned.

“This has a very strong impact on election preferences and trust in democracy. It’s not just about how people are doing and whether they have a chance to make a living, but also how people talk about it,” Trlifajova said.

The authors argue that it is necessary to keep raising wages. They recommend strengthening collective bargaining, and they also advise that decent remuneration should be a condition for awarding public contracts and subsidies. Besides, the range of available public services should be expanded, and the state could gain money for spending by re-setting taxes, they say.

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