Real wages in Czechia have slumped in the last five years

Czech salary growth is in a dire state, with real wages worth much less today than they were five years ago – despite sizable growth in nominal terms. Based on data from the national Information System on Average Earnings (ISPV), some professions have seen technical pay cuts of up to 30 percent since 2019, mainly owing to Czechia’s high inflation rate.

Using the ISPV figures, Czech media outlet Seznam Zprávy found that inflation, on aggregate, has increased in Czechia by around 38 percent since 2019. Consequently, a large chunk of employees have lost money in real terms. As a result, protests and demands for significant pay increases have erupted across various professions, including police officers, court workers, doctors, teachers, and academics.

One of the hardest-hit groups is firefighters, who have seen a drop in their salaries by almost one-quarter in real terms. The police is also another public-sector group that has seen a pay cut of over 10 percent in recent years, despite salary increases of over CZK 10,000 on average.

In the last five years, real wages in Czechia have dived by a substantial 7.5 percent, a recent report from the Huge inflation since 2019 has caused real salaries to fall, despite the fact that their nominal value has increased substantially in the last five years, the OECD says. In 2019, the average wage was CZK 34,125 – today, it stands at over CZK 45,000. 

The good news, however, is that in the last two years Czechia’s real-wage growth has seen a much more positive development. For example, in the first quarter of this year real wages rose by 3.8 percent – this is the 11th-highest growth in the OECD. 

Although real wages fell by about 3 percent in 2023, this year should see solid growth of between 3 and 4 percent this year.

Petr Bouchal, a researcher from the Institute for Democracy and Economic analysis, explains that the decline in salaries has been going on for several years and may be one of the reasons for the increasing number of protests and strike alerts, such as one recently made by university staff due to real-terms pay cuts of over 10 percent.