Czech unions insist on stronger wage growth in public sector

Trade unions continue to insist on stronger wage growth in the public sector, CMKOS president Josef Stredula told CTK, the state news agency. He said unions won’t give up their initial demand on wage levels in 2020, as they expect a 15% wage hike for teachers, a 10% hike for non-teaching staff employed in education, and an 8% hike for everyone else working in the public sector. In the 2020 budget bill, the government proposed a 10% hike for teachers and a 2% hike for everyone else. Furthermore, ministries will need to cut their staff by 10%, mostly from unfilled positions.

Unions argue that according to the latest macroeconomic projections of the finance ministry, there would be more money available, given that inflation is anticipated as higher, thus boosting nominal tax revenue. In addition, unions rule out a scenario where they back a decline of wages in real terms, which would happen if the current proposal is approved. Yet, there haven’t been any encouraging signals coming from the government so far, as the CSSD is too busy pushing its own agenda, while ANO doesn’t want to give up public investment for current spending.

There are more demands coming, as healthcare unions demand that healthcare spending is at least 9% of GDP annually. Spending on healthcare will increase by 9.4% in 2020, adding up to CZK350bn, health minister Adam Vojtech has previously said, but unions believe it is not enough. They also argued that all of the money didn’t really go for actual spending as a fifth stayed on health insurance accounts, given mandatory insurance rules. There was a particular push for higher spending on hospitals, which lack financing and personnel.

The government hasn’t met unions to negotiates wages and spending for next year yet. Given what has been going on in recent months, we doubt that a meeting will take place earlier than September. It will leave a narrow negotiating window before the government needs to submit the 2020 budget bill to parliament before the end of the month. All that depends on whether there will be a government by the time talks with unions will start, since ANO and the CSSD don’t give indications they are ready to compromise on budget figures for 2020.

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