Wage growth was the highest in the whole of 2020
Real wage growth of 3.8 percent in the fourth quarter was the highest in a full year last year. In the first quarter, after adjusting for inflation, wages rose by 1.5 percent, in the third by 1.8 percent, and in the second quarter they even fell by 2.3 percent year on year. This happened for the first time since the end of 2013, when the year-on-year index was distorted by the then tax regulation.
Analysts attributed the decline in the second quarter of last year to the effects of coronavirus proliferation and relatively high consumer price inflation.
The highest increase was in health and social services
The highest wages were last year in the field of information and communication activities, where people averaged 62,148 crowns a month. Employees in finance and banking received less than three thousand crowns less.
However, wages in health and social care grew the most last year, which was affected by the coronavirus epidemic. People in these fields took an average of 41,290 crowns, 13.8 percent more than a year earlier. On the other hand, wages fell in real estate or hospitality. The restaurants had to be closed for most of last year, only the service windows worked.
–
Analysts: Redundancies are also behind the growth
According to analysts, the growth of the average wage showed a very different development of remuneration between branches. The growth was mainly due to the payment of rewards in health care and the growth of salaries in education. However, the dismissal of mainly low-income employees also contributed to this.
According to ČSOB analyst Petr Dufek, wage data may look surprising. “However, on closer inspection, we find that not so much is happening in the labor market. Above all, this significant increase in wages is due to the public sector, where in the last quarter salaries increased again and extraordinary bonuses were distributed, “he said. He added that it is still true that the average wage is rather an imaginary number that most domestic employees cannot reach.
Raiffeisenbank analyst Vít Hradil stated that the indirect relationship between wage developments and the number of employees suggests that the current result, although visually sympathetic, is more of a statistical phenomenon. “The pandemic is obviously more often depriving the employee of a job in lower paid positions, and after their departure, the average earnings increase. At the same time, the administrative increase in salaries in education and healthcare is significantly added to the data, “he said.
–
Surprising wage growth
“Overall, wage growth at the end of last year clearly surprised upwards. Bonuses paid to health workers and faster growth in salaries in education helped to increase wages faster. If the companies laid off, it was more in the group of low-income employees, which also drew the average wage upwards, “said Miroslav Novák, an analyst at Akcenta.
Deloitte chief economist David Marek pointed out that given the difficulties caused by the coronavirus pandemic, this is a very favorable result of last year’s development of average wages. “We expect similar wage growth this year as well. However, given falling inflation, real wage growth could be slightly more favorable. With the economy returning to normal next year, wages could grow faster again, “he said.
Larger financial reserves of households
UniCredit Bank’s chief economist Pavel Sobíšek pointed out that households as a whole came up with decent money at the end of last year, but often had no way to spend it.
“A considerable part of the income thus turned into financial reserves. These will help overcome this year’s financially more difficult year for many households, but perhaps they will also help catch up with at least part of the deferred consumption. The contrast between the weak economic performance and the stronger wage situation of households will be illustrated by a huge hole in the state budget, “said Sobíšek.
–
“It is almost surprising that employees earned an average of some crowns on the payroll even in the year when we recorded the biggest economic downturn in the history of the Czech Republic,” said LOGeco investment group economist Jana Mücková. According to her, salaries will rise even after the pandemic has subsided.
According to Radomír Jáč, chief economist at Generali Investments CEE, nominal wage growth of between four and five percent can be expected for this year, so in real terms the average earnings in the economy for the whole of 2021 could increase by about two percent.
– .
