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Czech Wages Go Up: But Is It Enough?

The monthly wage in Czechia will increase to roughly 15,000 crowns if Czech President Miloš Zeman has his way; this, according to Minister of Labour and Social Affairs on Monday before a Tripartite meeting after talks with Zeman on the issue.

The Council for Economic and Social Agreement is made up of government representatives, employers, and trade unions, and is responsible for securing social harmony.

The wage increase would elevate the current wage, standing at 13,350 crowns. It’s a fair settlement, most agree, between the 1,650 crowns that the trade unions demand, and the 700-crown increase usually offered by employers in the region.

The versions of the increase have been drafted by the Labour and Social Affairs Ministry, in increments of 1,150, 1,350 or 1,650 crowns. The ultimate choice as to which of these is implemented will rest with the cabinet should the Tripartite fail to achieve a consensus.

Over 150,000 of the Czech Republic’s 10.5 million people earn the minimum wage, she reported.

If passed, the increase of 1,650 crowns would equal over 41 percent of the country’s average wage, a significant increase by any measure. The lesser increases equate to roughly 40.8 and 40.2 percent, respectively. But money has to come from somewhere, and that’s employers’ pockets, to the tune of roughly 4 billion crowns, depending on which package is selected.

The increase reflects the general trend in Europe.

The minimum wage in France increased in 2019 by €100 a month. But instead of making employers pay the bill, the government of France will be covering the tab. Additionally, overtime pay is not taxed, nor are bonuses.

In the same year, Spain’s minimum wage increased 22 percent, the largest in the country in more than 40 years. If it affects roughly 2.6 million workers, most of them women.

Portugal followed suit, increasing the gross minimum wage to roughly €600 (or $688) monthly.

Even European countries with the highest minimum wages are increasing the standard to meet the needs of their citizens.

In Luxembourg, which has the highest minimum wage in the EU, increased the unqualified minimum wage in 2019 to €2,071 ($2,373), an increase of roughly €27 (or $31) monthly.

The country with the second-highest minimum wage in the EU, Ireland, increased its per-hour rate by 25% to €9.80 ($11.2). That brings in about €1,656 ($1,897) per full-time worker every month.

With the minimum wage of €1,616 ($1,851), Full-time workers in the Netherlands earn €1,616 ($1,851), which makes it the third-highest on the list of EU minimum wages. Belgium is next with German close behind, paying €1,612 ($1,847) and €1,599 ($1832), respectively.

In 2018, the federal minimum wage in the US was a dismal €1,048 ($1,201) per month by comparison, not a living wage in that country.

Central and Eastern Europe lag too, with minimum wages well below €500 ($573) per month. Bulgaria’s monthly wage of €286 ($373) is the lowest in the EU, just barely worse than those of Latvia and Lithuania, at €430 ($493), or even Romania at €445 ($510) and Hungary at €463 ($530).

So while the Czech Republic is raising its minimum wages, it’s helpful to remember that the cost of living is going up everywhere, and financial stability is always relative.

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