Analysis of the development of average wages of employees - 2nd quarter of 2011

The registered number of employees FTE overall increased by 0.2%, i.e. by almost eight thousand persons, in Q2 2011, compared to the corresponding period of the previous year. The trend in the number of employees was, however, very differentiated in various activities. The deepest drop was recorded in ‘construction’ (-5.6%, i.e. by 14.2 thousand) again. Employment also decreased more significantly in ‘accommodation and food service activities’ (-4.1%, i.e. by 4.6 thousand) and in ‘mining and quarrying’ (-3.2% i.e. by 1.2 thousand). The reduction of staff also rapidly proceeded in ‘public administration and defence; compulsory social security’ where the number of employees declined by 5.3%, which represent 15.6 thousand. On the other hand, labour force grew in the largest activity that is in ‘manufacturing’ by 3.6%, which means by 37.2 thousand. A higher increase in employment can also be seen in ‘administrative and support service activities’ (+4.7%) and in ‘real estate activities’ (+3.4%).

The diversity in development was also demonstrated in the classification to the business and non-business spheres. While in the business sphere there was already an increase in employment by 0.8%, which represent 25.3 thousand, in the non-business sphere employment dropped again (even more substantially then before) by 2.5%, which is by 17.5 thousand. Yet till Q3 2010 the number of employees in the non-business sphere was slightly increasing while employees in the business sphere suffered from consequences of depression at that time.
The second sign of recovery in the business sphere is the year-on-year growth in the overtime work share, which was notable, first of all, in ‘wholesale and retail trade; repair of motor vehicles and motorcycles’ where the increase in the overtime work compensates the low growth in the number of employees.

Concerning the average wage itself (as the arithmetic average calculated as the ratio of wage volume and the number of employees FTE) the nominal increase recorded was 2.5% yet it is driven exclusively by the business sphere (+3.2%). In the non-business sphere the drop in the average wage or salary (-0.9%), which begun in the middle of the last year, has continued.

Following the results of the first quarter (+2.1%), when the wage index is usually affected, in certain activities, by payments of extraordinary bonuses and premiums for economic results of the previous year in a strong manner, the nominal growth in the total average wage (+2.5%) increased by four tens, to which both the spheres contributed although the non-business one solely by a smaller decline.

The overall average real wage in Q2 2011 rose by 0.7%, y-o-y. The factor affecting the real wage trend is still the increasing price level (inflation) expressed as the consumer price index, which climbed to 101.8% in Q2 2011. Differences in between the spheres appeared in the real wage index as well. While in the non-business sphere the average real wage fell by 2.7%, and this means it has dropped in fifth quarter in a row, in the business sphere it grew by 1.4%. In the non-business sphere, although its employees have more frequently higher educational attainment, the arithmetic average of wages was by CZK 332 lower compared to wages in the business sphere. Yet in the business sphere the wage differentiation is much larger.

The development was also differentiated concerning activities of the economy. Two activities experienced a nominal drop in the average wage – the significant one was in ‘public administration and defence; compulsory social security’ (-3.2%) and a smaller decrease occurred in ‘professional, scientific and technical activities’ (-0.3%). In other activities wages grew on average, however, at different paces. The relatively highest increase was in ‘administrative and support service activities’ (+5.5%), which involve employment agencies as well, and then in ‘real estate activities’ and ‘mining and quarrying’ (both identically +5.3%). In ‘manufacturing’ the average wage grew by 4.6% and, if the fact the number of employees in this activity also increased, then it is surprising that in activities of the closely interconnected ‘transportation and storage‘ wages rose by mere 0.5% and employment, by contrast, fell by 1.9%.

Concerning the absolute level of the average wage itself the first trio has not changed and also their ranking is still the same as follows: the gold medal is still in possession of the ‘financial and insurance activities’ (CZK 46 817), ‘information and communication’ has the silver one (CZK 43 012), and the ‘electricity, gas, steam and air conditioning supply’ follows with the bronze medal (CZK 38 762).
Activities of the lowest wages are also traditional as follows: ‘accommodation and food service activities’ (CZK 12 870, yet in these activities tips also make a part of income), ‘administrative and support service activities’ (CZK 16 556), and ‘agriculture, forestry and fishing’ (CZK 17 672).

The minimum wage has showed no change since January 2007 and accounts for CZK 8 000.

Graph No. 1

Graph No. 2

Published: 05.09.2011
The data are valid as of the release date of the publication.