Government agrees on public sector salary increases, cut in support for NGOs

The centrist Ano party and its junior coalition partner, the Social Democrats, have reached a framework agreement on increasing public sector salaries. While the specifics have not yet been made public, the coalition has agreed on a differentiated range of salary increases of about 8 per cent on average, with workers who now earn the least set to get the biggest raises.

Jan Hamáček, photo: ČTK/Michal KrumphanzlJan Hamáček, photo: ČTK/Michal Krumphanzl Negotiations had been long and contentious, with the Social Democrats calling for an across-the-board 10 per cent increase for public sector workers. The senior Ano party was against any hikes above six per cent, or thrice the national bank inflation target.

In the end – although the small print has not been finalised – a “substantial” increase in public sector salaries will be written into the draft 2019 state budget. Most workers will get a 4 per cent rise, but for certain categories it ranges from 7.3 to 15.9 per cent, a result that Social Democrat chairman Jan Hamáček called a “win” for the sector.

“We tried within the framework of negotiations that the money, or rather the percentage increase, to the greatest extent possible benefit those with the lowest salaries … I know that everyone will be debating who ‘won’, who got the biggest increase and who got less. Nonetheless, I think that the public sector employees ‘won’, and I’m glad we were able to reach this framework agreement, which will, of course, be discussed further on Friday with representatives from the various ministries and offices.”

The average increase – of 8 per cent – is halfway between the levels proposed by the respective coalition partners. To offset the 3 billion crowns this will cost, the public sector will cut 1,300 posts next year, saving 1.24 billion crowns, while non-profit organisations will see their state contributions reduced by over half a billion crowns on 2019, Prime Minister Andrej Babiš said on Wednesday.

Photo: Ondřej TomšůPhoto: Ondřej Tomšů Meanwhile, the Ministry of Labour and Social Affairs has put forward a decree raising the minimum wage by 12.3 per cent as of January 2019 and wants it pegged at 50 per cent of the average wage, up from 37.5 per cent now. The valorisation is widely seen as long overdue – in terms of purchasing power, the Czech Republic has the fourth-lowest minimum wage in the EU, after Bulgaria, Latvia and Lithuania.

Earlier this month, Ano and the Social Democrats also agreed teachers’ salaries should rise by 10 per cent, not including bonuses. The Ministry of Education hopes to see educators’ salaries rise to 150 per cent of the national average salary by 2021.