Czech labour mobility incentive stalls

23-01-2017

Home is, as the saying goes, where the heart is and for most Czechs the heart does appear to be reluctant to move too far. Labour mobility is a weak point of the Czech economy and government incentive for people to uproot and move to where jobs are appear for the moment to have been cold shouldered.

Photo: archive of Czech GovernmentPhoto: archive of Czech Government International institutions, such as the club of rich developed countries, the OECD, have frequently highlighted the Czech workforce’s reluctance to move to where jobs are as a major failing of the local economy.

The government has taken steps to address the problem. Last year it began with a pilot project targeted at six regions with high unemployment. The idea was to encourage people to commute to jobs from their homes with payments of between 1,000 and 3500 crowns a month to help cover the transport costs.

The regional mobility allowance launched in April was eventually paid out to 555 applicants five months later. Around two fifths of those payments were made in the Moravia-Silesia region, one of the areas with the highest unemployment rates in the country.

But an attempt to widen the mobility payments to workers and their families who are prepared to move lock stock and barrel to get work has not had anywhere near the same response. The uptake for the one off payments of up to 50,000 crowns to move at least 50 kilometres to land a new job was launched in November. So far, according to Czech public service broadcaster, Czech Television, those payments have been handed out to just 15 applicants.

The spokeswoman for the Czech Labour Office, Kateřina Beránková, says it has high hopes that the uptake will increase: “We expect that in the future the number of applications for this payment will rise.”

Major employers, such as the Czech Republic’s biggest car maker Škoda Auto, have already established their own incentives to bring workers to factories. These include loans for buying flats or contributing for accommodation costs for workers who come from afar. These have helped ease its labour shortage at the Mladá Boleslav in Central Bohemia and Kvasiny in the north-east of the country.

But a survey suggests that Czechs are still reluctant to move. A poll taken by the agency IPSOS for one of the country’s biggest recruitment companies found that only 44 percent of Czechs were willing to move permanently to get work. That figure climbed by just over 17 percentage points if housing was taken care of at the new location or by just over 12 percentage points if the new job offered a wage hike of 5,000 crowns or more.

Czech labour mobility is often compared unfavourably to that of Slovaks with an estimated 100,000 Slovaks working in the Czech Republic and about half that total, 50,000, believed to be working in Britain.

23-01-2017