Average wage in the Czech Republic reaches new record

The Czech Republic has reached a new record high in gross monthly nominal wages, according to a recent report from the Czech Statistical Office (CZSO). In the second quarter of 2018, the average gross monthly nominal wage reached CZK 31,851, up CZK 2,515 from the same month last year. In Q2 2018, the median wage reached CZK 27,236. Photo credit: Christina Morillo, Pexels.

Prepared by Berk Büyükbalcı

Recent reports released by the CZSO show an increase of 8.6% in average wages compared to the same period of 2017. The increase brought wages in the Czech Republic to a new record high. In the second quarter of 2018, the average gross monthly nominal wage reached CZK 31,851, CZK 2,515 more than the same period last year. In Q2 2018, the median wage reached CZK 27,236. The median wage has increased by 9.4% compared to the same period of the previous year.

The average gross monthly nominal wage is the share of wage expenditure per employee per month and does not indicate what wage one specific employee earns. According to CZSO, the earnings structure statistics show that two thirds of employees have an average wage below the national average. The data of CZSO shows that 80% of employees monthly earned wages were within the interval of CZK 12,725 to CZK 51,576 in the first half of this year.

Consumer prices have also experienced an increase in the second quarter of 2018. With the 2.3% increase in consumer prices in the same period, the growth in average wages was 6.2% in real terms.

Strong economic performance, a low level of unemployment, and high demand for workers are among the main reasons behind the increase in wages.

The number of vacant jobs reported to labour offices reached 310,000 at the end of July 2018, which is a new highest number since the registry has existed, while the number of registered job applicants available aged 15–64 years was 210,000 people,” wrote Dalibor Holý from the Labour Market and Equal Opportunities Statistics Department of CZSO.

Chart: Average wages. Total, US dollars, 2017 or latest available. Source: OECD.

Chart: Wage levels EU 28. Low pay, Percentage, 2017 or latest available. Source: OECD*.

* OECD definition: Wage levels are divided into low pay and high pay. The incidence of low pay refers to the proportion of workers earning less than two-thirds of median earnings. The incidence of high pay refers to the proportion of workers earning more than one-and-a-half times median earnings.

The fastest growth in wages was seen in state administration, education and culture. On the other hand, the financial and insurance sectors have experienced the slowest growth.

According to the Classification of Occupations system (CZ-ISCO), “managers” were the group with the highest earnings, with a median wage of CZK 50,046; the second highest wages can be found in the category of “professionals”, with a median wage of CZK 37,713. “Technicians and associate professionals” earned the third highest median wage of CZK 32,789. “Clerical support workers” had a median wage of CZK 25,116. “The fastest growth of the median wage (+13.4%) was found in service and sales workers, though a large number of these workers are categorised as low-income employees, with the decile range from CZK 12,897 to CZK 34,156, and a median wage of CZK 19,967,” explained Holý.

The employees with primary and/or incomplete education unsurprisingly received the lowest wages (a median wage of CZK 20,821). Respectively, the employees with higher education (after completion of secondary education; education at universities, academies,…Editor’s notice.) received the highest earnings. Their median wage in Q2 2018 was CZK 39,735, yet with the lowest growth of 9.1%, year-on-year.

Holý also describes the differences in the earning among various age groups. The lowest median wage of CZK 20,376 was earned by employees up to 20 years of age. In the age group of 20–29 years it was CZK 26,209. The age group 30–39 years was reported to have earned the highest median wage: CZK 29,472.

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