The average wage has risen, but people can’t buy much more

In the second quarter, wages rose by 11.3 percent year on year, so growth slowed in the third quarter. Analysts expected a slowdown, according to them, as wage developments in the third quarter were not affected by last year’s low base effect and the extraordinary remuneration of health professionals.

“Also in Q3, high wage growth in health and social care was maintained, this time by eight percent. However, the highest growth occurred in real estate activities, specifically by 11.8 percent, “commented Jitka Erhartová, head of the labor statistics department.

The year-on-year increase in the average wage by 5.7 percent, when converted into crowns, is CZK 2012 more than last October. However, the CZSO adds that consumer prices rose by 4.1 percent in the same period, so in real terms the average rose by only one and a half percent.

High inflation is consuming growth

“Although people’s wages are rising sharply, they don’t buy much more in stores. The problem is that nominal wage growth is mostly consumed by high inflation. In real terms, wages are only growing at a snail’s pace, “said Štěpán Křeček, BHS’s chief economist, on quarterly average wage figures.

In addition, inflation will continue to have a negative effect on wages. “The rapid rise in consumer prices at the end of this year and throughout next year will have a significant impact on real wage growth, which will be zero at best and negative at worst,” said Miroslav Novák, an analyst at Akcenta.

The highest average wage was in the 3rd quarter in Prague, where it reached CZK 45,523. On the contrary, people in the Karlovy Vary region earned the least, where the average was CZK 33,249.

Most employees do not reach the average wage, so the median wage is a more realistic indicator. This is the value of the salary that the employee receives exactly in the middle of an imaginary set of all employees sorted in ascending order according to the amount of their salaries. The median in the 3rd quarter of this year was CZK 32,979, which is 5.7 percent more than a year ago.

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