Czech Economist Proposes Massive Layoffs of Government Employees Amid Labor Shortage

The government can start laying off state employees in large numbers, not just those from post offices or financial offices. Economist Lukáš Kovanda from Trinity Bank stated this in his commentary in response to the unemployment data released on Wednesday.

The unemployment rate in March dropped to 3.7 percent, with over 280,000 vacancies available. This is even though about 100,000 refugees from Ukraine are working in the Czech Republic.

“The job market is overheated; companies have nowhere to get employees. This is a signal for the government that it could be bolder in reducing the number of state employees. In international comparison, we have more police officers per capita. For example, that’s where we could cut. We have a large fragmentation of the state administration, and there are also significant savings to be made on officials,” Kovanda said.

A half-million-strong swelling army of state employees The number of state employees increased significantly above average last year by over 10,000. Nearly half a million state employees are paid from the budget, including teachers, customs officers, police officers, firefighters, officials, and postmen. Municipalities and regions also pay for additional employees. Last year, the state mainly recruited teachers, justified by demographic development and a more significant number of school children. However, in other areas, cuts could be made.

“I don’t see much political will for this yet. For example, when they close post offices, they want to relocate employees to the prison service. I understand that it is socially and politically demanding, but economically, now is the ideal opportunity, with 280,000 available jobs. Whoever wants to work will find a job. It may not always be a job where they can realize themselves, but that is a necessary price if we want to improve public finances,” Kovanda concluded.

From this year’s budget, including EU funds, CZK 265.1 billion should go to the salaries of state employees, which is CZK 18.7 billion more than last year. The average salary of state employees is CZK 42,403.