The Persistence of Low Wages in the Czech Republic

The average cost per hour for Czech firms to employ workers was 18 euros or approximately 432 korunas in the past year. This was an increase of 38 korunas from the previous year. Despite this growth, the Czech Republic remains the twelfth cheapest country in the European Union in this regard, according to the latest comparison by Eurostat, which considers wages and levies, including social and health insurance.

Hourly labor costs in the Czech Republic are only slightly higher than in countries like Slovakia or Greece, as per European statistics. The lowest among EU countries is in Bulgaria, where the costs are half compared to the Czech Republic. In contrast, the highest is in Luxembourg, where it reaches 53.9 euros, three times more than in the Czech Republic.

“The Czech Republic is still an economy of cheap labor compared to other EU countries. Although our labor costs are gradually increasing, we still do not reach even half of the European average,” commented Petr Dufek, an economist at Creditas Bank.

Furthermore, analyst Vít Hradil from Cyrrus pointed out that the Czech tax burden on work, including levies, is not high by European standards. “On the contrary, since the abolition of the super gross wage in 2021, we have been slightly below the European average in this respect,” he noted.

Hradil emphasized the significant role of overall economic performance, from which labor productivity is derived. “The Czech economy simply is not impressively productive within the European Union, and each hour of work of our average employee thus generates less added value, which results in a relatively lower wage,” he stated.