Czechs are the most “rubbed” nation in Europe, OECD and World Bank data show – Echo24.cz

Czechs allow themselves to be “rubbed” like no other nation in Europe. After all, they see the smallest part of the value they actually create on their paycheck. Specifically, it is about 67 percent. But the Belgians, for example, can boast earnings that correspond almost one hundred percent to the value they actually create. The French, Slovenians, Austrians, Spaniards and Germans also have a relatively high proportion (93 percent or more) of what they actually work on their payrolls (see table below).

In this statistic, workers in the Czech Republic are even worse off than their colleagues in other Visegrad Four countries. Hungarians earn 68 percent of the value they create through their work, Slovaks 70 percent, and Poles 85 percent.

The given percentages represent the share of the average annual wage in a given country on its gross domestic product calculated per person. So they roughly capture exactly how much of the value created by the worker remains in his pocket. The amounts indicated are in dollars at current prices in purchasing power parity; as captured by OECD and World Bank statistics related to 2022. The list of countries includes all EU member countries that are also OECD members.

Of course, the given data, on the basis of which the resulting percentage figure is calculated, are rather rough and do not capture all the “nuances” and specifics of this or that economy. Nevertheless, they undoubtedly have informative value.

One of the key reasons why Czech workers see in their pay a relatively small part of what they actually work is the enormous outflow of created wealth from the Czech Republic to abroad. This occurs mainly through the outflow of hundreds of billions of crowns per year in the form of dividends of domestic subsidiary companies paid to their mothers, most often located in western EU countries. Hundreds of billions of crowns of value worked out and created on the territory of the Czech Republic thus disappear “in heaps” – the place on the payrolls of people in the Czech Republic ends up in the accounts of foreign shareholders of the mothers of domestic subsidiaries.

But other factors play a role. The Czech Republic, for example, represents the country with the lowest ratio of public debt to GDP within the Visegrad Four. Within the EU, its public debt in relation to GDP is noticeably below average. This may indicate that in the Czech Republic wages and salaries are paid “on credit” less than in some other EU countries.

However, Czechs are also relatively shy in salary negotiations. At the turn of the year, only a quarter of Czech employees were going to talk about being added this year. This was the least of the 46 countries in which the consulting firm PwC conducted its survey. This attitude of the Czech employees is particularly striking after taking into account the fact that the Czech Republic then had – and actually still has – one of the highest rates of inflation among the monitored countries. Rapid inflation should prompt the Czechs to talk about adding at a much higher rate. They should lead the PwC ranking rather than be on its tail.

The position of the Czechs is even more surprising after taking into account the fact that the Czech Republic has the most overheated labor market among the countries monitored by PwC. The Czech Republic has for a long time the lowest unemployment rate not only among EU countries, but also among OECD countries. Such a situation should record to the employees so that they can say about the addition successfully. Simply because the employer has no one to replace them in the arid labor market. But that doesn’t happen at all.

The fact that the Czechs do not talk about additions like other nations, despite the high inflation and the low unemployment rate, understandably suits companies and enterprises operating in the Czech Republic very well. Which is the fundamental reason why the Czech Republic has the lowest unemployment rate in the EU and indeed the OECD for a long time. Czechs allow themselves to be “rubbed” and at the same time “keep their mouth shut”. For foreign companies, the Czech Republic still represents an “oasis” of relatively cheap, obedient, uncomplaining and at the same time qualified workforce.