Real wages finally increase again

According to official statistical data, the average monthly wage in Slovakia increased by 1.1% in real terms in 2001, following two years of falls in real wages. However, the real level of average wages has still not returned to the level recorded in 1989. The positive development in real wages continued in the first quarter of 2002.

According to the 'Report on the social situation of inhabitants of the Slovak Republic in 2001', published by the Ministry of Labour, Social Affairs and Family in mid-2002, the average nominal monthly wage amounted to SKK 12,365 in 2001. This represented an increase of 8.2% on the previous year, when the figure stood at SKK 11,430. As the cost-of-living index for employees increased by 7.0% over 2001, the year's increase in the average nominal monthly wage represented a real pay increase of 1.1%, following two years of decreases in real wages. The table below indicates real wage developments over 1997-2001, showing the real wage level in each year as a percentage of that in the previous year.

Average real wage developments, 1997-2001
. 1997/1996 1998/1997 1999/1998 2000/1999 2001/2000
Real wage development index (%) 106.5 102.8 97.1 95.4 101.1

Source: Adapted from 'Report on the social situation of inhabitants of the Slovak Republic in 2001'.

However, the real wage increase achieved in 2001 still did not bring the level of average real wages up to the level recorded in 1989. The average real wage in 2001 was only around 85% of the average real wage in 1989. Nevertheless, the increase in 2001 was a positive development - not least for the government, because the previous falls in real wages were often criticised by the opposition and by the trade unions. At the beginning of 2001, when the Trade Union Confederation of the Slovak Republic (Konfederácia Odborových Zväzov Slovenskej Republiky, KOZ SR) evaluated the fulfilment of the Tripartite General Agreement signed in 2000, it criticised the government for failing to meet its obligations regarding wage developments laid down in the agreement.

The private sector represented the major share in the real wage increase achieved in 2001, with an average nominal monthly wage of SKK 13,759 - a nominal increase of 10.0% on the 2000 figure and a real increase of 2.8%. This was caused mainly by real wage increases in large organisations and organisations with foreign ownership. In large organisations (those with 20 or more employees), which employ about 72% of all employees, the average nominal monthly wage stood at SKK 12,931 - a nominal increase of 9.0% on the 2000 figure and a real increase of 1.9%. Organisations with foreign and/or international capital in their equity recorded a 3.5% real pay increase and those with domestic cooperative ownership saw a 0.8% increase. However, domestically owned organisations saw a 1.3% decrease in real wages and small organisations (with under 20 employees a 2.9% decrease.

In the public sector, the average nominal monthly wage in 2001 was only SKK 12,020 - a nominal increase of 7.4% on the 2000 figure and a real increase of 0.4%. Real wage increases were found mainly in state corporations (up 2.1%), while real wages decreased (by 0.7%) in other state organisations.

According to the latest data from the Statistical Office of the Slovak Republic (Statistický úrad Slovenskej republiky, SÚ SR), the average nominal monthly wage in the first quarter of 2002 was SKK 12,287, an increase of 8.6% on the same period in 2001. Taking into account consumer prices developments, this represented a real wage increase of about 3.7% - the highest annual real wage increase in the Slovak Republic for four years. The level of the average nominal monthly wage was higher than in the first quarter of 2001 in all sectors. The fastest increase in nominal wages was in health and social services (up 19.2%) and the lowest in the construction industry (up 2.3%). In the whole business sector, the average nominal monthly wage increased by 9.0% in comparison with the same period in 2001, standing at SKK 13,876.

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