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2002 WAGES ROSE FASTER OUTSIDE BRATISLAVA THAN IN THE CAPITAL BUT PAY LEVELS STILL LAG FAR BEHIND EU AVERAGES

Slovak pay levels out - a little

THE DIFFERENCE in pay between Bratislava and the regions is as high as that between Bratislava and the rest of the European Union, but that gap is gradually closing, according to studies by the research company Trexima Bratislava.
During 2002, average pay levels rose much faster in the regions than in Slovakia's two main cities, Bratislava and Košice. The western districts of Trnava, Trenčín, and Nitra, together with the eastern district of Prešov saw the largest wage rises of about 10 percent. In contrast, wages in Bratislava showed increases of just 6 percent.
Despite the rises, the highest-paying regions remain Bratislava, with an average hourly wage of Sk120 (€2.93), and Košice, with an average of Sk105 (€2.57). Last year's increases still left Prešov with the lowest hourly rate of Sk77 (€1.88).

THE DIFFERENCE in pay between Bratislava and the regions is as high as that between Bratislava and the rest of the European Union, but that gap is gradually closing, according to studies by the research company Trexima Bratislava.

During 2002, average pay levels rose much faster in the regions than in Slovakia's two main cities, Bratislava and Košice. The western districts of Trnava, Trenčín, and Nitra, together with the eastern district of Prešov saw the largest wage rises of about 10 percent. In contrast, wages in Bratislava showed increases of just 6 percent.

Despite the rises, the highest-paying regions remain Bratislava, with an average hourly wage of Sk120 (€2.93), and Košice, with an average of Sk105 (€2.57). Last year's increases still left Prešov with the lowest hourly rate of Sk77 (€1.88).

"The differences in pay mostly mirror the economic differences between the regions. They reflect how many people in the region are working, and how many are unemployed, as well as how many for different reasons do not want to work officially, but on the black market. The differences in pay result from varying degrees of education and qualification, but also access to the marketplace," explains Ľuboš Vagač from the Centre for Economic Development.

In his opinion, there are many other factors causing the gap in pay, including the business culture, competition in the region, and the entry of foreign investment. This idea is echoed by Jaroslav King from business think tank MESA 10, who warns that entry to the European Union will not necessarily continue to bring regional pay levels closer to those in Bratislava.

In an interview with the financial daily Hospodársky denník, he stated: "In the next few years, pay levels are not expected to converge. Many people expect entry to the EU to bring a balancing of differences between the regions, but according to information from the EU, that may not happen. The disproportional difference between regions goes in cycles - sometimes the difference is reduced, sometimes it grows."

He saw problems in eastern Slovakia in particular, but said the new labour code could bring room for improvement, because it will make working on the black market more difficult.

Experts believe that wage levels will increase overall with entry to the European Union, citing the example of Ireland, which had an unemployment rate of 20 percent and pay levels far below European averages when it joined the European Union in 1972. Nowadays, Irish hourly rates are just €5 below the European average of €22.70 and unemployment has dropped to just 4.5 percent. Slovak politicians are hoping for similar changes here.

European Union unemployment currently stands at 8 percent, with some countries, such as Luxembourg, having levels as low as 3 percent. The candidate countries hoping to join the European Union next year have average unemployment levels of 13 percent, with Slovak levels reaching 16.5 percent, according to April figures.

Even among the candidate countries for the EU, Slovakia is lagging behind in wages. Despite the average increase of almost 7 percent last year, wages are still more than 30 percent less than those in the Czech Republic. At the end of last year, the average hourly wage in Slovakia was just Sk93.30 (€2.30).

There are also large differences in pay between skilled and manual workers. The worst paid work was for manual labourers and cleaners, who earned as little as Sk38 to Sk48 (€0.93 to €1.17) per hour.

Human resources experts note that the differences are greater within particular fields. For example, a lawyer in Bratislava may earn Sk191 (€4.67) per hour, whereas in Prešov the same work would earn Sk116 (€2.83).

"Those further east from Bratislava, can expect lower wage levels. Not even foreign investors will pay more than 10 to 20 percent above the regional average. The share of specialised and qualified work tends to be higher in such firms, and calculating average wages for those workers is therefore more difficult. Specialised work is gradually being valued higher," explains Dušan Timko, consultant for Prešov-based personnel agency Personel Efekt.

Some of the biggest wage increases - of between 10 and 50 percent - were seen in the fields of programming, architecture, project management, banking, and finance. Large increases were also seen in some areas of industry.

The departure of skilled Slovak workers for foreign jobs has put pressure on the domestic market and increased wage levels in those areas.

"The growth of hourly wages is shown mainly in professions, where employment can also be found abroad. It is true not only for university-educated specialists but also for skilled manual workers," the director of Trexima, Gejza Mihályi, told the daily SME.

This pressure will increase as Slovaks find themselves able to work in other countries around Europe, although not all states will welcome Slovaks to the workplace from May next year. In most countries there will be a two-year delay before full freedom of movement for labour comes into effect. In Austria and Germany, the delay may be until 2011.

In two of the countries where Slovaks will be able to work without visas, the UK and Ireland, the minimum monthly wage is approximately €1,100 (in comparison with the Slovak minimum pay of €120), more than three times the average wage in Slovakia.

Despite the current low levels of wages in Slovakia, experts predict that faster growth in the Slovak economy in comparison with the more mature economies in the European Union should push Slovak pay up faster than in the rest of Europe, with wages reaching 60 percent of those in Germany by 2008.

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