[Czech Republic] No room to meet unions’ call for minimum wage rise

In the Czech Republic, the government can see no room to increase the minimum wage further this year, Reuters reports.

Marian Jurecka - Czech Labour Minister - announced the news on May 17 as unions continued to seek a 5.8 per cent rise, effective from July.

The minimum monthly wage reportedly rose by 1,100 crowns to 17,300 crowns in January. Unions are pushing for an extraordinary 1,000 crown rise in the middle of this year to compensate for soaring prices and another 1,200 crown rise from next January.

According to CTK news agency, after meetings with unions, the minister said, "I do not see any room for the minimum to rise once again this year." 

Mr Jurecka did add that if unions and the country's main employers' association agreed on it, the government would comply. The main employers' lobby has reportedly already rejected any rise.

Last week the government unveiled a broad deficit-cutting plan worth 94 billion crowns as part of moves to cut the fiscal gap to below 2 per cent of gross domestic product in 2024 after several years of record-high shortfalls.

Wage growth dynamics have reportedly been on the central bank's radar as private sector pay in industry grows by about 10 per cent in 2023. Some policymakers believe this will raise the risk of a wage-price spiral.

Central bankers have left their base policy rate at a more than two-decade high of 7 per cent since mid-2022 but have kept the option of another increase on the table as they battle inflation that has been in double digits since the beginning of 2022.

Source: Reuters

(Quote via original reporting)

In the Czech Republic, the government can see no room to increase the minimum wage further this year, Reuters reports.

Marian Jurecka - Czech Labour Minister - announced the news on May 17 as unions continued to seek a 5.8 per cent rise, effective from July.

The minimum monthly wage reportedly rose by 1,100 crowns to 17,300 crowns in January. Unions are pushing for an extraordinary 1,000 crown rise in the middle of this year to compensate for soaring prices and another 1,200 crown rise from next January.

According to CTK news agency, after meetings with unions, the minister said, "I do not see any room for the minimum to rise once again this year." 

Mr Jurecka did add that if unions and the country's main employers' association agreed on it, the government would comply. The main employers' lobby has reportedly already rejected any rise.

Last week the government unveiled a broad deficit-cutting plan worth 94 billion crowns as part of moves to cut the fiscal gap to below 2 per cent of gross domestic product in 2024 after several years of record-high shortfalls.

Wage growth dynamics have reportedly been on the central bank's radar as private sector pay in industry grows by about 10 per cent in 2023. Some policymakers believe this will raise the risk of a wage-price spiral.

Central bankers have left their base policy rate at a more than two-decade high of 7 per cent since mid-2022 but have kept the option of another increase on the table as they battle inflation that has been in double digits since the beginning of 2022.

Source: Reuters

(Quote via original reporting)