The Minimum Living Wage Platform updated the amount a person needs to cover their basic needs on Tuesday. According to the calculations of this independent expert group, the minimum living wage for 2024 was €1,835 gross. In Prague and Brno, where housing costs are higher, it even reached €2,158. This amount corresponds to the remuneration for full-time work, which is supposed to cover the necessary costs of housing, food, transport, healthcare, education and other living necessities. A significant part of people still fall below the minimum living wage (MDM), last year it was approximately 2.5 million workers. Almost three quarters of women earn less than the MDM. 68 percent of people under the age of 35 are also below the MDM.

The minimum living wage is an indicator that calculates, based on current prices, what the remuneration for work during normal working hours would have to be in order to provide workers and their households with enough financial means to live, which is perceived by most society as a certain basic standard. It is supposed to cover the costs of food and housing, clothing, transportation, health care, education and leisure, and to pay for other important expenses, including savings for unexpected events.

The Platform for a Minimum Living Wage, which updates this amount regularly every year, this time focused on the role that housing costs play in the income situation of workers. In the worsening housing crisis in recent years, the Czech Republic has the worst availability of owner-occupied housing in Europe (a 70 m² apartment cost 13.3 gross annual wages last year). The situation in the area of rental housing is also worsening, with prices growing faster than wages in recent years. More and more young people who do not earn above average have to rely on rental housing. Approximately two-thirds of households headed by a person under 35 live in rental housing. The share of families with children under ten living in rental housing has increased by half in the last five years.

“The real purchasing power of Czech employees has still not reached the level before the coronavirus pandemic. Much of this is due to the development of housing prices, which are an increasingly difficult to finance expense. The government’s wage policy or the taxation of low wages does not help employees cope with the high prices of basic necessities,” says Jan Bittner, an economist from the University of Economics and author of the Škrty podcast, who participates in the MDM calculation every year.

“The question of whether people achieve wages that will enable them to cover their basic needs has both an income aspect, i.e. how much they earn, and a cost aspect – how the prices of common needs change. That is why this year we focused on the very topical issue of housing. Our goal was to point out the growing inequalities that arise around housing and that even ’decent’ wages, although they are high by Czech standards, cannot compensate for. On the contrary, we see that current state policies often accelerate these inequalities,” comments anthropologist Lucie Trlifajová from the Faculty of Social Sciences of Charles University and the Centre for Social Issues - SPOT.

Given that the proportion of people living in rental housing has increased year-on-year, especially in cities, the Tenants’ Initiative (INN) has also joined the activities of the Platform for a Minimum Living Wage this year. This initiative organises tenants across the Czech Republic with the common goal of social change that will bring dignified and secure housing for those who cannot afford to own a home. It has active cells in Brno, Prague, Ostrava, Olomouc and České Budějovice, and others are being established. “As tenants, we are extremely burdened by high housing costs; for many of us, this is the largest expense in the budget. We are therefore exposed to economic and social uncertainty on a daily basis. Therefore, we demand consistent and enforceable protection for tenants, including an end to the chaining of short-term contracts,” says Oleksandra Polívka, a member of INN.

Kateřina Smejkalová, a political scientist from the Friedrich-Ebert-Stiftung and a member of the Platform for a Minimum Living Wage, also emphasises the extraordinary role of housing: “The housing crisis in the Czech Republic creates existential uncertainty for large segments of society. As we know from research, this has fatal consequences for the functioning of society as a whole - from the much-discussed declining birth rate to limited flexibility in the labour market to political radicalisation or resignation. The democratic system is also destabilised by the massive inequalities that the current situation on the housing market produces,” said Smejkalová.

Denik Alarm

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