Public Sector unions threaten to strike as inflation cuts into real wages across the board
Wages in the Czech Republic are growing, but not enough to cover for the rapid rise in inflation. Data released by the Czech Statistics Agency on Tuesday show that real wages fell by 3.6 percent on average during the first quarter of 2022. The hardest hit are public sector employees, whose trade unions have threatened to go on strike if their demands are not met by the government.
Statistics show that while the average salary grew faster, by 7.2 percent, in the first quarter than it did last year, real wages have actually been falling across most sectors due to inflation. The hardest hit is the public sector, where the real wage has fallen in a space of four months by 8.4 percent.
Following a meeting with the government, the head of the Czech Confederation of Trade Unions, Josef StÅ™edula, said that the executive’s proposals to cover the inflation surge are wholly insufficient.
“We are not requesting a rise in salaries, we just want to retain their purchasing power. Unfortunately, none of the government proposals came anywhere near to that.
“The ‘best’ proposal we heard would mean a 7.5 percent fall in real wages for those public sector employees who have not received any raise so far this year. For those who did, it would still mean a decrease in their real wage. And that was the best proposal we got.”
The next day public sector trade unions announced that they are ready to go on a strike. For now, Labour Minister Marian JureÄka remains cool headed, saying that the government is ready to raise salaries but not so high as to cover for inflation.
Doing the latter would mean an extra CZK 20 billion from the budget, the labour minister said, something that the government wishes to avoid given that its planned budget deficit already lies at CZK 220 billion for this year.
It’s not just the government that isn’t happy about the trade union demands. Several economists and business representatives have warned that raising wages at such high rates would only create more risk of an inflation spiral. Read More...
