Salaries growing faster than labour productivity. Why does it matter?

Slovakia may lose its biggest competitive advantage in years to come.

Slovakia does not have to worry about the potential departure of investors to regional competitors. Labour costs are growing in neighbouring countries, tooSlovakia does not have to worry about the potential departure of investors to regional competitors. Labour costs are growing in neighbouring countries, too(Source: TASR)

Slovaks have achieved another record: The average monthly salary in the national economy amounted to €1,101 in the second quarter of 2019, according to the Statistics Office data.

This is an increase of 9.7 percent year-on-year and an analysis by UniCredit Bank states it has reached an 11-year high.

Uneven growth

At first glance, this development may be regarded as gratifying, although not everyone feels this to the same extent. Nonetheless, economic analysts give warning and point to the other side of the coin: salaries have been growing much faster than labour productivity for a long time.

The rest of this article is premium content at Spectator.sk
Subscribe now for full access

I already have subscription - Sign in

Subscription provides you with:
  • Immediate access to all locked articles (premium content) on Spectator.sk
  • Special weekly news summary + an audio recording with a weekly news summary to listen to at your convenience (received on a weekly basis directly to your e-mail)
  • PDF version of the latest issue of our newspaper, The Slovak Spectator, emailed directly to you
  • Access to all premium content on Sme.sk and Korzar.sk

The processing of personal data is subject to our Privacy Policy and the Cookie Policy. Before submitting your e-mail address, please make sure to acquaint yourself with these documents.

Top stories

Triple coalition PS/Spolu/Za Ľudí? Not for now

Kiska said no, but there are talks about a broader pre-election coalition across opposition parties.

Left to right: Igor Matovič (OĽaNO), Ondrej Dostál (OKS), Richard Sulík (SaS), Miroslav Beblavý (Spolu), Michal Truban (PS), Andrej Kiska (Za Ľudí), Alojz Hlina (KDH)

Judge steps down for exchanging messages with Kočner

Several people have resigned after appearing in the Threema communication so far.

David Lindtner

Prosecutor brings charges against Kočner in the Kuciak murder case

Apart from Kočner, three other people were formally charged.

Ján Kuciak and Martina Kušnírová were commemorated in Bratislava on August 26.

Blog: AI and Slovakia: Labor costs to become less important

Which policy challenges and risks will AI bring to converging economies, such as Slovakia? Vladimir Zlacký, Founder of LookingEast.eu, offers an interesting answer.