Chamber of Commerce: Real wages have increased by 141 percent since the creation of the Czech Republic

Chamber of Commerce: Real wages have increased by 141 percent since the creation of the Czech Republic

Chamber of Economy: Real wages have increased since the creation of the Czech Republic

Customers in face masks with a shopping cart – illustrative photo.

Prague – Real wages in the Czech Republic have increased by 141 percent since the division of Czechoslovakia until 2021. This follows from the analysis of the Chamber of Commerce of the Czech Republic, which is available to ČTK. Wages grew most rapidly in 1995 and 1996 due to the recovery in growth after the economic transition. According to the estimates of the Chamber of Commerce, last year brought the deepest drop in real wages, but the final data have not yet been published and are therefore not part of the analysis.

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While in 1994 the average wage was 7,004 crowns, by the end of 2021 it was 40,135 crowns. At the same time, nominal wages increased faster than the price level, so that employees' incomes also increased in real terms.

“The standard of living of the employees has increased. After deducting the increase in consumer prices, the employees have improved in real terms. Currently, their wages are almost 2.5 times higher than thirty years ago,” said the Chamber of Commerce.

Real wages, which are adjusted for the effect of inflation, grew the fastest in 1995 and 1996, when they increased by 8.7 percent year-on-year. The Czech Republic recorded a decrease in real wages in 1998, 2000, 2012 and 2013. In 2013, the year-on-year decrease was the deepest, amounting to 1.5 percent. “An even bigger drop in the real earnings of employees probably occurred due to the energy crisis and related inflation in 2022,” the Chamber of Commerce said. However, exact data on the development of wages are not yet available. The chamber estimates that wages fell by 7.8 percent in real terms last year.

“Although Czech wages still do not reach the average of OECD (Organization for Economic Cooperation and Development) countries, they are approaching this average of the 38 most economically developed countries in the world. While in 1995 Czech average wages were at the level of 37 percent of the OECD average, in 2021 they already reached 61 percent,” said the Chamber of Commerce. According to her, in order to more quickly approach the wages of the most developed countries, it is necessary to switch to economic activity with higher added value.

Overall, the Chamber of Commerce assesses the development of living standards in the Czech Republic in the past 30 years positively. “The post-revolutionary transformation established the good economic development of the Czech Republic, and its position and people's standard of living are very solid today,” said Vladimír Dlouhý, president of the Chamber of Commerce. “Today, at least in a number of our cities, the quality of life is higher than in some Western European capitals or regional centers,” he added.