Prime Minister Petr Fiala’s ambitious plan to close the wage gap between Czech workers and their German and Austrian counterparts has hit a significant roadblock. Recent data reveals that the disparity in earnings has increased over the past few years instead of narrowing.
According to Eurostat figures, the gulf between average annual gross earnings in the Czech Republic and Germany widened by 692 euros (approximately 16,600 CZK) between 2021 and 2023. The gap with Austria grew even more, expanding by 1,763 euros (42,300 CZK). This trend paints a stark picture: while Czech workers earned an average of 23,454 euros (about 562,900 CZK) in gross annual income last year, their German counterparts enjoyed 50,998 euros (1.22 million CZK), and Austrians took home 54,508 euros (1.31 million CZK).
Economic experts are sceptical about the feasibility of catching up to German wage levels shortly. Vít Hradil, chief economist at Cyrrus, estimates that at current growth rates, the Czech Republic might not reach German wage levels until around 2070 – and that’s an optimistic scenario. Other analysts project even longer timelines, with some suggesting it could take until 2120 or beyond.
The wage gap issue has sparked intense political debate. Opposition politicians have seized on Fiala’s promise of “German wages,” with some dismissing it as unrealistic, like ANO deputy chairman Karel Havlíček. Former Finance Minister Miroslav Kalousek described it as “a strong statement and a strong promise that has the potential to evoke various emotions. Except trust”.
Economists warn that rapidly increasing wages to German levels could have severe consequences for public finances. Lukáš Kovanda of Trinity Bank calculates that to match German wages within five years, as promised by Fiala, the average salary in the Czech Republic would need to increase by 140 per cent – about 25 per cent annually. This would balloon the state budget deficit to at least 600 billion crowns annually, potentially leading to a breakdown of public finances.
As the debate continues, it’s clear that closing the wage gap between the Czech Republic and its wealthier neighbours is a complex, long-term challenge that goes beyond simple political promises. It will require sus