Is it normal to be able to go on vacation once a year?
Should we be able to save part of our pay each month?
salary before the taxation,
2022food and housing, clothing, transportation, health care, education, and free-time activities, but also be able to pay for other important expenses, including savings for unexpected circumstances.
fall into a cycle of debt as a consequence of little or no savings;
work in their free time, which has a negative effect on their health and family life;
Frustration stemming from uncertainty and the feeling that no one cares or that no one is addressing these problems can lead to a loss of trust in the current political system.
Economic uncertainty disproportionately impacts inhabitants from various regions. The weaker purchasing power of a region’s inhabitants has negatives impacts on the entire development of the local economy.
This category concerns expenses from buying groceries according to nutritional recommendations. Additionally, a working adult should have the possibility to eat (lunch) at a company cafeteria or a public restaurant.
Included here are costs for rent in an average-sized apartment, including services and utilities. The two amounts reflect the differences in prices in Prague and other cities in the Czech Republic. The same price for utilities and services is included for payers of mortgages or property owners.
This category concerns the cost of clothing and shoes.
Included here are costs associated with commuting to work or school or with running errands (shopping, seeing a doctor); it also includes costs from obtaining and using different modes of transportation (car, motorcycle, bike).
This category concerns expenses associated with a phone plan, home internet, and licensing fees (e.g., TV or radio).
This category concerns costs associated with both hygiene products and health.
This includes expenses related to continuous education, free time activities (cultural events, sports, after school groups for kids), and an in-country vacation.
This is the average amount of a person’s income which should be set aside in the case of unexpected expenses or wage loss, as well as for retirement and other types of insurance.
Martina, nurse
When Martina ended up alone with her children, she was unable to support them on just one salary, even though their father paid alimony – it was too low. So she had to work three jobs and there was no money for trips or vacations, but at least she was able to cover the basics and the household. However, if her children wanted to go to a summer camp or something broke down in the house, it was her mother who had to help out financially. When she had a tooth pulled, she went for six years without a replacement because there was no spare money, and she was not eligible for any social welfare benefits. “We made it through, but it was like the kids didn’t even have a mother. She was either at work, being busy with household chores or sleeping,” she says with her children now grown.
Jan, theatre director
Jan works as a core director of a large regional theatre and as an artistic director of an independent theatre in Prague – two full-time jobs with two half-time job equivalent salaries. With his two jobs, he makes a total of roughly the average monthly salary. But since each of his jobs is in a different city, he also has double the expenses for accommodation and travel. So at the end of the month, he’s usually broke anyway. “If I have an unexpected financial circumstance, such as going on sick leave due to an injury or having a broken electrical appliance, I simply don’t have the means,” he says.
Luboš, food industry worker
Luboš and his wife are blue-collar workers in Prague – both in top ranking positions in their field. The job involves night shifts, high responsibility, handling money, continuous operation, and stress. They have negotiated a pay increase for this year and therefore have a total gross income of CZK 80,000. Still, it is quite difficult for them to make ends meet in Prague. Luboš supports his mother, so he cannot manage to put a single crown aside, even though he does not pay a mortgage or rent, only the fees in his own home. He commutes to work in his 22-year-old car and every quarter of a year he has it serviced because a part has worn out. “I don’t feel safe in my old car anymore, I drive my whole family in it. So I guess I’ll have to go into debt, even though I know how risky that is these days,” he admits.
Vendula, public servant
Vendula works in public administration in a senior position with fifteen years of experience, yet at the end of the month she regularly has to consider whether she can afford to fill up her car’s gas tank, or whether she will have enough money left for her last weekend grocery shopping before payday. “The economic situation doesn’t allow me to deal with my health issues in peace, because even the shortest period of sick leave is a significant hit to my income, and with the ban on private business for government employees, I don’t have much chance to make up for it with another source of income,” she says. She has set her regular heat and electricity bills high enough so there is no risk of arrears, and has used the overpayments each year to pay for her holidays. This year, she fears she won’t be able to afford it. She is afraid of emergencies, such as not being able to work for an extended period of time. “I have insurance, but if I happen to get sick for a reason other than what the insurance company recognizes, I’m ruined.” She does realise that, compared to the worsening situation of more and more people, she is still relatively well off with her own home. “But at the same time, I really don’t think that as a university-educated professional with many years of experience and a high level of work commitment, I should devote my energy and drive to solving existential problems”, she states.
Milan, public servant
Milan is a civil servant for four years now. He is amongst the best paid in his field, yet he takes home 28 000 Kč (approx. 1 085 €) per month after taxes. He is not in financial distress per se, as he and his girlfriend are able to afford the occasional weekend trip around Europe. Nevertheless, he has a desperate lack of savings: “At the most, I save a little from what my partner contributes to our studio apartment rental.” In fact, their most pressing problem has to do with housing. “Moving to a bigger apartment in Prague is out of the picture for us now. I don’t know what we would do if Janča were to get pregnant.”
Naděžda, divorced teacher
Naděžda is a teacher at a private hospitality high school in Zlín, where she makes approx. 21 000 Kč (approx. 824 €) after taxes. Her financial stability comes from working a second job – on the weekends she tutors adults who want to complete high school and sometimes she helps out her son with his company’s accounting. From her divorce she inherited an apartment in a housing cooperative, which ends up eating up a lot of her funds. The necessity of a second and even at times a third job has affected how Naděžda sees herself. “I don’t seem middle class to me – my second job is the only thing that gets me by. But what kind of person cannot get by on one job?”
Behind the minimum decent wage project is an independent and informal platform of experts who have been meeting to discuss the concept and various calculations since 2016. We started out first by defining the problems which are affecting the Czech Republic and also looked at how a minimum decent wage would react to such problems; furthermore, we familiarized ourselves with activities abroad associated this issue. Next, we further developed our definition and established the categories of expenses which are part of an ordinary life.
This year, more than half of Czechs will not reach a wage high enough for decent living (Aktuálně)
Minimum decent wage? Not even half of Czechs can reach it, say experts who participated in the calculations (Radio Wave):
A minimum wage is the result of political negotiations between unions, employees, and the state. A minimum decent wage, on the other hand, attempts to determine in numbers how much a worker needs to earn in order to be able cover expenses which will afford them a basic material standard.
Yes, a similar quantification of wage levels in relation to spending amounts is already being addressed abroad.
In order to come up with a calculation, it was necessary to determine what the basic standard for each expense category was; however, our aim was not to dictate exactly what people should be able to acquire with such a wage. More so, the point was to determine the financial framework which an individual or family should have at their disposal. It’s then up to each household what they spend it on.
We do not doubt that some employers have legitimate reasons for being unable to pay higher wages. Low wages are also afterall a consequence of how the entire economic system operates. The minimum decent wage instrument is thus also a contribution to the debate on how raising wages to a decent level will require structural reforms as well.
There is certainly more to living a quality and fulfilled life than merely a decent income – we also need, for example, healthy and quality relationships or satisfactory environments to live in.
Nevertheless, the material aspect plays a central role in contemporary society and can also have even an indirect effect on those previously mentioned attributes of a quality life – when, for example, due to financial straits, there is no money left for healthy food or preventative healthcare or even when partners fight due to limited family funds.
We are not trying to define what a decent life is with a minimum decent wage; rather, we are drawing attention to the amount of material security that is needed for a person to feel like they are on equal footing in society.
In practice, people have different possibilities and strategies for compensating for a lower income. Some own their own place, which lowers costs, or it could be that one person in the relationship, most often the man, has a higher income. In other cases, people have various self-sufficiency strategies. Other attempts to cope with a lower income can have negative effects, such as the necessity of multiple jobs or working overtime. Also problematic can be a dependency on a partner as a consequence of a lower wage.
The goal is not to legislatively implement the calculated amount, for example, as a guarantee of a minimum decent wage. Rather, it should serve as a means to discuss wage and social benefit levels, or even seen as a long-term goal which Czech society can approach in various ways. It can also serve as a rationale for employees, unions, and employers when negotiating wages and salaries.
The calculated amount represents only the bare minimum for spending expenses and does not include any extras. It neither provides for individual special needs nor provisions for sustainable, quality or local goods. The amount in no way should serve as a ceiling for wage demands.
Both the calculation and rationale behind a minimum decent wage are available to anyone who is concerned with wage levels in the Czech Republic and will allow MDW to become a widely used instrument and argument. The expert platform will update the amount each year according to actual costs associated with the included expense categories.
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