Until 1945, the region was populated by ethnic Germans - the so-called Sudeten Germans. The city of Cheb, with around 32,000 inhabitants, is located in the western part of the Czech Republic, close to the German border with Bavaria. Many of Cheb's residents travel there to shop in cheaper and better-stocked German supermarkets.
The Czechs who settled here after the expulsion of the Sudeten Germans have the opportunity to compare the Czech and German realities. Their salaries are significantly lower than in Germany, and even in other parts of the country.
The lowest salaries in the Czech Republic
According to the Czech Statistical Office, the average gross salary in Cheb is under 40,000 Czech crowns (about 1,600 euros), while in the richest part of the Czech Republic - the capital Prague - it is around 56,000 Czech crowns (about 2,220 euros). As a result, many young people are fleeing from the periphery to the interior of the country. And of the working-age people who remain here, a large part work in neighboring Germany. There, they are looking for craftsmen, factory or construction workers, but also trained technical personnel with a good knowledge of German.
Jarmila's son, a woman in her mid-sixties, also works in Germany. "He is a plumber and earns only 2,500 euros a month. In Cheb, he could never earn that much," says his mother.
Jan Baksa is still a high school student in Cheb, but he is already certain that he will look for a job in Germany. During the holidays, he goes to work in Bavaria and clearly sees the difference: "In Germany you get no less than 500 crowns (about 20 euros) per hour," he says. By comparison, in Cheb, Czech Republic, 150 crowns (6 euros) per hour is considered a pretty decent wage.
In another five years - salaries like in Germany?
Against this background, the people of Cheb reacted with surprise and skepticism when Prime Minister Peter Fiala promised that in five years wages in the Czech Republic would reach the level of those in Germany. He recently announced that if he wins the election next autumn with the current ruling coalition, wages will be on par with those in Germany and Austria. "I need a clear and complete mandate so that we can create the necessary conditions for business so that it can pay people wages like in Bavaria," he said on television.
This sparked a heated debate in the Czech Republic, but most reactions were sceptical. And Jarmila from Cheb says with irony: "To have wages similar to those in Germany in five years, the Federal Republic would have to go bankrupt during that time."
Czech wages are not even half of German
The Czech economic model of the 1990s has been relying on low wages compared to Western countries, which, combined with a skilled workforce and relatively good infrastructure, attract Western, including German, investments to the country.
Although wages in the Czech Republic are rising faster than those in the old EU member states, they are still far from their levels in Western Europe. Eurostat data shows that in 20 years of EU membership they have risen to only 44% of current gross wages in Germany.
Despite relatively stable growth, the Czechs managed to overtake only Portugal, Greece and Malta in terms of gross income. Still, Czech wages are the second highest in the former communist countries after Slovenia. But incomes in Poland and the Baltic states are quickly catching up with those in the Czech Republic.
Not Bavaria, but Saxony-Anhalt as a benchmark
Nevertheless, economic experts do not consider Petr Fiala's promise unattainable - especially if the target is not wages in Bavaria, but in the economically less developed eastern provinces of Germany, where incomes are still significantly lower than the national average.
If nominal wages in the Czech Republic increase by 10% per year, the average purchasing power of Germans today could be reached in five years, but on condition that German wages only increase by two percent per year during that time,“ Daniel Münich, a well-known Czech economist from the Center for Economic Research and Postgraduate Education, told DW.
But is this realistic? Munich is skeptical: "The problem is that German wages will probably grow faster than Czech wages this year," he adds.
Catching up with the West, not going backwards
“The difference between wages in the Czech Republic and Germany is dramatic”, admits Jaromir Skopecek, an economist with Fiala's Civic Democratic Party. “The time when we looked with envy at Polish, Slovak or Hungarian wages is over. I am convinced that we are moving towards the average level of the European Union, we should orient ourselves towards the more successful countries“, says Skopecek.
Prime Minister Fiala insists on the same: “The elections next year will decide whether we continue on the Western path or go back like Hungary and Slovakia“, he says, hinting at the populist pro-Russian governments of Robert Fico in Bratislava and Viktor Orban in Budapest, which the leader of the Czech opposition, the oligarch Andrej Babis, considers his allies.
Salaries in Slovakia and Hungary are significantly lower than those in the Czech Republic. And Babis's powerful concern – Agrofert group - pays its Czech employees about 40,000 CZK, which is below the average salary for the country (48,000 CZK).
Author: Lubos Palata