Despite real wages decreasing for two years and prices being more than a third higher than pre-COVID, the government is cutting the volume of public sector wages by two percent as part of the public finance recovery plan.
However, police officers, firefighters, and teachers are expected to be protected from the wage cuts due to other operational expenditure limitations. Together with doctors, these professionals are the only ones who should receive an increase—the state budget plans for the average teacher’s salary to rise to CZK 52,400 monthly.
Politicians, on the other hand, will retain their current earnings. Due to the cuts, the remaining state employees are uncertain, and the reduction of positions and agendas will also matter.
The average wage in the third quarter of last year increased by 7.1% year-on-year to CZK 42,658. However, after considering inflation, which reached eight percent, the wage decreased by 0.8 percent in real terms.
In 2024, the central bank predicts average inflation will be 2.6 percent, while the Ministry of Finance expects 3.3 percent. In the previous two years, nominal wage growth did not cover inflation, but economists believe that real wages will start to grow again in the new year thanks to the decline in inflation.
According to a survey by Randstad, almost half of companies plan to increase wages by six to ten percent, while another 46 percent want to raise them by one to five percent. Sectors expected to give the most substantial raises include banking, insurance, financial services, energy, and gas. The minimum wage from January increased by CZK 1,600 to CZK 18,900. Unemployment is expected to grow only slightly.