Wages rising after a decade

The low level of unemployment is forcing employers to pay more

Wages are rising in all sectors after 10 years of stagnation. The trend is expected to continue due to record low unemployment. The economic downturn had caused wages to stall or in some cases drop.

Companies are having to raise wages to attract enough employees. Wages in supermarkets have increased dramatically, in some cases by 25 percent. Auto sector employees also saw higher wages.

According to Eurostat, the Czech Republic has the highest number of unfilled jobs in the European Union, and the unemployment rate was 3.2 percent according to figures released at the end of June. In May, domestic employers had 174,000 vacancies listed at the Labor Office, the highest number in the Czech history.

Experts say they do not recall ever seeing wages rise so rapidly. The gap between the best- and worst-paid jobs has also been closing. The OECD ranks the Czech Republic as one of the countries with the lowest level of income inequality,

In 2015, some 28 percent of employees earned a gross wage below Kč 18,000. Last year the number dropped to 24.5 percent. At the same time, the number of people who receive less than Kč 13,000 gross has dropped.

While one out of eight people earned less than Kč 13,000 two years ago, last year it fell to one out of 10.

In the last year, however, the salary of people earning Kč 100,000 a month grew slowly, up just 2.3 percent.

Companies should count on continuing pressure for further wage growth for at least the next two years, experts say. The minimum wage increased this year by Kč 1,100 to Kč 11,000. Next year it will rise again under a Ministry of Labor proposal by another Kč 1,200.

Owners of some industries, though, are critical of the wage increases as they say it cuts into profits and prevents them from spending in other areas such as acquiring new technology. 

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