William Malcolm

Government Approves Minimum Wage Hike

The minimum wage will increase by CZK 1,000 to CZK 16,200 from January. The regulation was approved by the Cabinet. This was stated by Prime Minister Andrej Babiš (YES) at a press conference after the government meeting. With the minimum wage, the guaranteed wage will increase, depending on the professionalism, complexity and responsibility of the work, up to 32,400 crowns. According to the documents for the regulation, the lowest earnings are received by about 139,000 people. According to the head of the Czech-Moravian Confederation of Trade Unions (CMKOS) Josef Středula, the decision to add a thousand crowns from the government is “contempt and the peak of arrogance”.

“The government has approved an increase of CZK 1,000 to CZK 16,200. We have taken into account the situation in the business sector,” Babiš said.

The Ministry of Labor originally proposed adding 2,800 crowns to 18,000 crowns. The unions supported it. Employers were against, they would add 500 crowns. The tripartite negotiated the amount several times, but did not agree. “People who work and try to make a living from their wages. I am disappointed, we will be 400 crowns below the minimum wage in Poland,” Labor Minister Jana Maláčová (ČSSD) wrote to ČTK. “The minimum wage is an eternal story about the fact that only in the Czech Republic is there a link between the minimum wage and the guaranteed wage. The comparison arguments in Poland and Slovakia are always odd. “the prime minister responded.

The minimum wage will increase by almost seven percent from January. According to the latest estimates of the Ministry of Finance from August, inflation should reach about 3.5 percent next year. The guaranteed wage, which is paid in eight degrees according to the professionalism, intensity and responsibility of the work, ranges from the lowest wage to its double. Now it amounts to 15,200 to 30,400 crowns, from January it will reach 16,200 to 32,400 crowns. People with the lowest earnings will thus improve by 1,000 to 2,000 crowns. For the public sector, the cabinet expects a 1400 crowns in salary growth in the proposed state budget. The Coalition of Together and Pirates and Mayors and Independents (PirSTAN), which are negotiating a new government, want to adjust the shape of the budget and reduce its deficit by tens of billions. It is not so clear how salaries in state and public services will eventually be adjusted.

The annual wage costs per worker with the lowest earnings to employers in 2022 will increase by approximately 16,000 crowns. The press department of the Ministry of Labor stated that the expenses of companies could increase by about 5.7 billion crowns next year and in the public sector by about 370 million crowns. After raising the minimum and guaranteed wage, the state could choose 970 million more for social insurance and 360 million more for health.

The unions pointed out that the lowest earnings in the Czech Republic are below the income poverty line. “Prudent. Andrei Babiš’s government could prove that it thinks of the people. That it is aware of the value of work. Instead, the cabinet has increased the minimum wage by a thousand crowns. We are worse off than Slovaks and Poles. This is the height of arrogance. said Středula.

According to employers, companies are recovering from the covid crisis and a more significant addition would get into trouble, especially smaller companies. Entrepreneurs demand the introduction of regular valorisation according to economic indicators. In the last election period, the Ministry of Labor did not negotiate or enforce this. The PirSTAN coalition promises valorization in the election program, it does not mention it together. However, the measure could appear in the program of their eventual joint government.