Analysis of the development of average wages of employees - 3 quarter

The year-on-year (y-o-y) change in the average wage has been still in a minor way affected by the drop in employment expressed as the registered number of employees FTE. In Q3 2010 this number fell in total by 1.2%, i.e. by 47 thousand, compared to the same period of the previous year. A significant increase in the registered number of employees was found in ‘other service activities’ (+6.8%), ‘financial and insurance activities’ (+4.5%), and furthermore, in ‘real estate activities’ (+2.0%), ‘human health and social work activities’ (+1.4%), and in ‘education’ (+1.2%); this reverse trend could already be noted in some industries (‘manufacturing’ +0.2%). On the contrary, activities in sections of ‘accommodation and food service activities’ (-7.5%), ‘electricity, gas, steam and air conditioning supply’ (-7.1%), and of ‘construction’ and ‘agriculture, forestry and fishing’ (both identically -5.5%) experienced deep drop in the number of employees.

A certain recovery of industry is indicated by a substantial increase in the share of overtime hours, y-o-y.

It was observed, concerning the average wage itself (the arithmetic average calculated as a fraction of the wage bill and the registered number of employees), it recorded overall a very low increase yet significantly differentiated by industry. The growth of average nominal wages (2.0%) was the lowest since 2000 and even by 0.4 percentage point (p.p.) lower than that in Q2 2010. A higher increase, y-o-y, was found in ‘professional, scientific and technical activities’ (+4.9%), ‘water supply; sewerage, waste management and remediation activities’ (+4.0%), ‘electricity, gas, steam and air conditioning supply‘ and ‘information and communication’ (both identically +3.9%). On the other hand, the nominal wage dropped significantly in ‘education’ (-2.5%) and ‘public administration and defence; compulsory social security‘ (-1.5%). A minor average nominal wage decrease was also recorded in ‘financial and insurance activities’ (-0.7%) where it was probably caused by hiring of new employees, see above.

The real wage development was affected, besides the nominal wage growth, also by a growth of the price level (inflation) measured by the consumer price index, which in Q3 2010 reached 101.9%, that is the highest level since Q1 2009. The total real wage in Q3 2010 increased by mere 0.1%, y-o-y. The business sphere saw the real wage increase by 1.0%, y-o-y, while the non-business sphere recorded a drop by 3.6% and was already decreasing for the second consecutive quarter. The non-business sphere, which involves more employees with a higher level of education, has, over the long term, a slightly higher arithmetic average of salaries compared to the business sphere, and even the latest trend did not change the fact.

Differences in between the business sphere and the non-business one were demonstrated in respective industries, for instance, in ‘human health and social work activities’ the business sphere entities recorded the average wage increase by 5.0%, in organisations of the non-business sphere of the same section the average nominal wage fell by 0.9%. The same trend emerged in ‘arts, entertainment and recreation’ and in other less represented industries. Conversely, the average wage in ‘education’ decreased similar way in both the spheres.
Over the first three quarters of 2010 the average wage in the entire Czech national economy increased by 2.3% nominally; in the business sphere it rose by 2.6% and by 0.7% in the non-business one. This cumulative data are dominated by the decrease in the number of employees in majority of industries, the most of all in ‘accommodation and food service activities’ (-8.0%), ‘electricity, gas, steam and air conditioning supply’ (-7.3%), ‘agriculture, forestry and fishing’ (-6.5%), and in ‘construction’ (-5.9%). On the contrary, more important increase can be found, first of all, in ‘other service activities’ (+6.9%) and then in ‘financial and insurance activities’ (+2.2%).

Concerning the development in the average wage level an important increase was recorded in ‘mining and quarrying’ (+6.4%) and ‘human health and social work activities’ (+5.2%). The highest level of the average wage was observed in ‘financial and insurance activities’ (CZK 46 724), followed by ‘information and communication’ (CZK 42 821). ‘Accommodation and food service activities’ occupied the place on the opposite end of the scale (CZK 12 574), yet in these industries tips also make a part of income.

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

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Published: 07.12.2010
The data are valid as of the release date of the publication.