Main Article Content
Research background: The government of the Czech Republic has agreed to an increase in the minimum monthly wage as of the beginning of 2017 to 11,000 CZK, which represents a year-over-year increase of over 11 %. The government is thus fulfilling its objective set out in February 2014 and stipulated in the Government Statement of Purpose, i.e. to approximate the minimum wage to 40 % of average wages.
Purpose of the article: The purpose of the article is to assess the adequacy of the Government Minimum Wage Valorization Policy, in particular from two points of view. Firstly, in view of selected macroeconomic indicators in the Czech Republic — the development of consumer prices, average gross wages, economic growth and workforce productivity. Secondly, in comparison with other EU member states which have introduced the institution of a minimum wage.
Methods: In order to assess the adequacy of government policy to improve the social protection of the rights of the working population, a background research was conducted into the literature of important studies on the effects of minimum wages on unemployment, while the development of average gross wages in the CR, the minimum monthly wages in the CR and the Kaitz index were also analyzed. Furthermore, an evaluation of selected macroeconomic indicators in the Czech Republic was performed by means of time lines and the percentage representation of employees in the individual gross wage bands according to sex and type of economic activity. Last, but not least, a comparison was made of minimum wages, real gross domestic product per capita and workforce productivity in Euros and in purchasing power standards between the Czech Republic and countries which have enacted the institution of minimum wages.
Findings and Value added: The minimum wage in the Czech Republic is the fifth lowest in the EU. In the long term, it is earned by approximately 3% of employees, which is less than the rate common in other EU countries. Currently, the amount of the minimum wage is below the threshold of income poverty. In comparison with the GDP per capita in PPS and real labour productivity per person employed in other EU countries, the position of the Czech Republic is significantly better, although other EU countries offer higher minimum wages. The decision of the current government to significantly increase the minimum wage as of 2017 is correct.
Bílková, D. (2015). Financial position of Czech employees at the beginning of the 3rd millennium according to educational attainment. Prague Economic Papers, 3. doi: 10.18267/j.pep.521.
Card, D., & Krueger, A. B. (1994). Minimum wages and employment: a case study of the fast-food industry in New Jersey and Pennsylvania. American Economic Review, 84(4). doi: 10.1257/aer.90.5.1397.
Card, D., & Krueger, A. B. (2000). Minimum wages and employment: a case study of the fast-food industry in New Jersey and Pennsylvania: Reply. American Economic Review, 90(5). doi: 10.1257/aer.90.5.1397.
Czech Republic (2006). Act No. 262/2006 Sb. (Coll.), the labour code. Prague, Czech Republic: Ministry of Labour and Social Affairs – MoLSA. Retrieved from http://www.mpsv.cz/files/clanky/3221/Labour_Code_2012.pdf.
Czech Statistical Office (2015). Key macroeconomic indicators. Retrieved from https://www.czso.cz/csu/czso/hmu_ts (17.11.2016).
Czech Statistical Office (2015). Structure of earnings survey – 2015. Retrieved from_https://www.czso.cz/csu/czso/structure-of-earnings-survey-2015 (12.11.2016).
Czech Statistical Office (2016). Statistical yearbook of the Czech Republic – 2016. 10 A. Employees, job applicants, wages, and labour costs in the national economy.Retrieved from https://www.czso.cz/csu/czso/statistical-yearbook-of-the-czech-republic-2016 (25.11.2016).
Czech Statistical Office (2015). Statistical yearbook of the Czech Republic – 2016. 10-7. Job applicants kept in the labour office register and job vacancies kept in the labour office register.Retrieved from https://www.czso.cz/csu/ czso/statistical-yearbook-of-the-czech-Republic-2016 (08.11.2016).
Eurostat (2016). Minimum wage statistics. Retrieved fromhttp://ec.europa.eu /eurostat/statistics-explained/index.php/Minimum_wage_statistics/cs (03.09.2016).
Eurostat (2010). File: proportion of employees earning less than 105 % of the monthly minimum wage, October 2010. Retrieved from http://ec.europa.eu/eurostat/statistics-explained/index.php/File:Proportion_of_ employees_earning_less_than_105_%25_of_the_monthly_minimum_wage,_ October_2010_(%C2%B9)_(%25)_YB16-II.png (21.09.2016).
Eurostat (2016). Real labour productivity per person employed - annual data. Retrieved from http://ec.europa.eu/eurostat/en/web/products-datasets/-/TIPSNA70 (17.12.2016).
Eurofound (2016). Statutory minimum wages in the EU 2016. Retrieved from http://www.eurofound.europa.eu/observatories/eurwork/articles/working-condit ions-industrial-relations/statutory-minimum-wages-in-the-eu-2016 (09.10.2016).
Federal ministry of justice and consumer protection. Act regulating a general minimum wage. Retrieved from https://www.gesetze-im-internet.de/englisch_ milog/englisch_mi log.html#p0010 (08.10.2016).
Funk, L., & Lesch, H. (2006). Minimum wage regulations in selected European countries. Intereconomics, 41(2). doi: 10.1007/s10272-006-0178-3.
Geoffery, S. (2016). One-tenth of Czech population lives below poverty line: Report. Retrieved from http://www.czechjournal.cz/one-tenth-czech-population-lives-poverty-line-report/ (11.12.2016).
Kaufman, B. E. (2010). Institutional economics and the minimum wage: broadening the theoretical and policy debate. Industrial & Labor Relations Review, 63(3). doi: 10.1177/001979391006300304.
Ministry of Labour and Social Affairs – MoLSA. Labour code (full translation) No. 262/2006 Coll. http://www.mpsv.cz/files/clanky/3221/Labour_Code _2012.pdf (07.10.2016).
Ministry of Finance of the Czech Republic. (2016). Macroeconomic forecast - November 2016. Retrieved from http://www.mfcr.cz/en/ statistics/ macroeconomic-forecast/2016/macroeconomic-forecast-november-2016-26615 (17.11.2016).
Neumark, D., & Wascher, W. (2000). Minimum wages and employment: a case study of the fast-food industry in New Jersey and Pennsylvania: Comment. The American Economic Review, 90(5). doi: 10.1257/aer.90.5.1362.
Neumark, D. (2009) Delay the minimum-wage hike. Retrieved from http://online.wsj.com/article/SB124476823767508619.html (21.08.2016).
Patterson D. (2016). Sobotka outlines plan for rise in minimum wage. Retrieved from http://www.praguemorning.cz/sobotka-outlines-plan-rise-minimum-wage/ (04.08.2016).
Pavelka, T., Skála, M., & Cadil, J. (2014). Selected issues of the minimum wage in the Czech Republic. E+M Ekonomie a Management, 4(30). doi: 10.15240/tul/001/2014-4-003.
Research Institute For Labour and Social Affairs – RILSA. (2015). Development of subsistence levels, average and minimum wages - CZK. Retrieved from http://praha.vupsv.cz/Fulltext/fakta/graf7.pdf (02.09.2016)
Uhrová, N., & Skalka, P. (2016). The impact of minimum wage changes on management in the Czech Republic. Danube: Law and Economics Review, 7(3). doi: 10.1515/danb-2016-0012.