Czech wages hit a new record

The average wage rose by almost 9 percent compared to last year

The average gross monthly nominal wage for a full-time equivalent (FTE) employee in the Czech economy increased by 8.6 percent in the second quarter of 2018 compared to the same period of the previous year. In real terms, it grew by 6.2 percent.

The median wage was Kč 27,236, according to preliminary figures from the Czech Statistical Office (ČSÚ).

The average wage set a new record since the establishment of the Czech Republic in 1993, and finally passed the level set in the last quarter of 2017.

Wages rose fastest in state administration, education and culture, which are at the lower end of the wage spectrum. The reason according to analysts is the low level of unemployment and competition to attract workers. The slowest growth was in the financial and insurance sector, which already has high wages.

In Q2 2018 the average gross monthly nominal wage for a full-time employee was Kč 31,851, which was by Kč 2,515, or 8.6 percent, more than in the same period of 2017. In the second quarter of 2018 consumer prices grew by 2.3 percent, meaning that wages increased by 6.2 percent in real terms. The wage volume grew by 10.6 percent and the number of employees increased by 1.9 percent, the ČSÚ reported, adding that the figures were preliminary.

Compared to the previous quarter, the seasonally adjusted average wage in Q2 2018 increased by 2.0 percent.

The median wage in Q2 2018 was Kč 27,236 and increased by 9.4 percent compared to the same period of the previous year. The male median wage reached Kč 29,782 and the female one was Kč 24,514. Some 80 percent of employees earned wages between Kč 12,725 and Kč 51,576.

In the first half of 2018, the average wage reached Kč 31,062 and its increase was Kč 2,450, or 8.6 percent, compared to the first half of 2017. In H1 2018 consumer prices grew by 2.1 percent, so wages increased by 6.4 percent in real terms.

Experts warn, though, that the average gross monthly nominal wage is misleading, and it makes more sense to focus on the median wage, which is a better barometer of what people actually earn.

The average gross monthly nominal wage is a theoretical number showing the share of wage funds, including extra pay for overtime work, bonuses and other money for one employee per month. Statistics show that roughly two-thirds of employees have an average wage below the national average.

The median wage shows the employee wage in the middle of the wage distribution. That means one-half of the wages is lower and the second half of the wages is higher than the median wage.

People should remember that from the gross wages employers pay premiums for health insurance and social security, income tax advances, and other deductions. Employees are paid net wages, which are lower than gross wages.

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