State Employees Face Layoffs

Despite the ongoing high inflation, except for teachers, state employees in the Czech Republic will not see an improvement in their wages next year. According to the approved budget, the government will allocate two percent less, equivalent to 9.2 billion Czech koruna, for their salaries compared to this year. As stated in the budget appendix, the state and public administration are expected to reduce more than 23,000 job positions.

Minister of Finance Zbyněk Stanjura clarified after the budget approval that this decision affects state employees, not just bureaucrats. He emphasized that there are not as many state employees as people may think. Each minister or office director has two options: either maintain the same positions with lower salaries, reduce the number of posts, and offer higher wages to the remaining employees. Stanjura believes it is better to have fewer positions but better-compensated ones, leaving the decision to individual ministers and directors.

The reduction of staff has been discussed by some ministers previously. Vice Prime Minister and Minister of Labor and Social Affairs Marian Jurečka stated in an interview that he plans to decrease the number of employees in his department by ten percent over a year and a half.

“Consolidation at the Expense of People”

“If we can streamline internal processes, we can reduce the overall number of people in the public administration within a reasonable value. As a government, we have set an ambitious goal of around ten percent. At the same time, we can better compensate the remaining employees,” said Jurečka.

In response to these plans, labor unions have expressed their concerns and demands. They have requested a meeting with Minister Jurečka to discuss his statement, as it affects various aspects, including social services and employment offices. However, the meeting request has been declined. The unions are also unhappy with the government’s intention to reduce wage funds by two percent. Instead, they are advocating for a ten percent increase in salary tariffs, considering the estimated inflation rate of five to six percent next year.

“We have discussed this matter with Minister Jurečka and proposed that the government reconsider its position and increase salaries. According to the estimate of the Czech-Moravian Confederation, the inflation rate could reach five to six percent next year, resulting in an average real wage decrease of 19.7 percent,” said Pavel Bednář, chairman of the Union of State Bodies and Organizations.

Jurečka, however, stated after the meeting that the government does not plan a blanket increase, and the unions should negotiate with individual ministers for additional compensation. He did promise to arrange another meeting in October. It is possible that adjustments to the budget could be made in the Chamber of Deputies.

Regarding layoffs, the unions have not disclosed the details of those affected yet

The government passed the approved state budget for the next year, with a deficit of 252 billion Czech koruna, during its Wednesday session. The projected deficit remains unchanged compared to the August proposal by the Ministry of Finance. However, the budget now accounts for higher total revenues of 1.940 trillion koruna and higher expenses of 2.192 trillion koruna. Initially, revenues and costs were expected to be 19 billion koruna lower.

The defense sector will see the most significant increase, with nearly 39.4 billion koruna more than the current year. On the other hand, the Ministry for Regional Development will face a decrease of 7.4 billion koruna, or one-third of its budget. Initially, this ministry was supposed to receive three billion koruna less. The Ministry of Transport will experience a decrease of over nine billion koruna, and the Ministry of Industry and Trade will have a reduction of more than 14 billion koruna.

“We have prepared the first budget of this government, which does not face extraordinary expenses caused by external crises, such as the sharp increase in energy prices or aid to Ukraine and refugees seeking safety from the aggression of the Russian Federation. We can consider the approved budget as responsible,” Stanjura commented on the approved proposal.

However, Deputy Chair of ANO, Alena Schillerová, holds a different opinion. She criticized the proposal, stating that the Czech Republic is at a cross