Distribution of earnings changes, 2023
New experimental statistics allow more detailed analysis of earnings processes
The aim of the experimental statistics is to supplement and expand the information content of the change in average earnings published as official statistics by showing the distribution behind it, and thus shed light on the difference in its volume and the uneven distribution of the extent of change in earnings. All of this provides users with additional information for a deeper understanding of earnings processes.
The published experimental statistics examines the change in the earnings of individuals, that is, how the employee's wages developed comparing the given period to the base period, regardless of whether or not their job or employer has changed.
The change is calculated for the total earnings, therefore the indicator simultaneously expresses the combined change in the basic wage and other elements of earnings (additional payments, payments for days not worked, premium, bonus, 13th month and additional month salary).
The real economic processes of recent years have brought considerable changes in the labour market and had a significant impact on the development of average wages. The tight labour market, the noteable demand for additional labour, the closures caused by the coronavirus epidemic, the comprehensive wage settlements in several budgetary promotion schemes, the rise in inflation and overhead costs, as well as the employers' wage-increasing response to these have all had a spectacular effect on earnings.
In 2023, nominal wages increased significantly, but there were noteable individual differences behind them
In 2023, the monthly average gross earnings of full-time employees were 14.2% higher nominally than a year earlier. Although the growth rate was 3.2 percentage points lower than in 2022, this change can still be considered outstanding. The high average earnings index was influenced by the strongly increasing inflation and the significant additional demand for labour as well as the increases in the minimum wage in January and December.
In recent years, there have been significant differences behind the increase in the average earnings on national economic level. In 2023 (as well as in 2022), the majority of full-time job holders – 89.1% – saw their earnings increase compared to the previous year. Nearly 60% of employees saw their wages rise between 5.0 and 24.9%, every fifth employee’s wages have risen significantly - by at least 25.0% - and every twentieth employee’s wages by an outstanding amount of 50.0% or more. Compared to 2022, the share of workers with wage increases of 25.0% or more fell by 5.8 percentage points, while the share with wage increases of 5.0%-14.9% rose by 6.5 percentage points. The proportion of those who realised a smaller increase in earnings was also slightly higher. One in ten employees saw a decrease in their earnings over the course of a year. Behind this, just as behind the presented increases, is not only the change in the basic salary, but it could also be significantly influenced by the change in other earnings elements, such as wage supplements or bonuses, but there is no available information on the different earnings elements.
The changes in average wages are also quite tracable within the investigation period. In 2022 and 2023, the distribution of earnings changes had shifted compared to the two preceding years, which also explains the significant increase in average wages. The share of workers with decreasing earnings had almost halved, while the share of workers within the 15.0-24.9 and 25.0-49.9% earnings increase groups had grown considerably.
Individual changes in earnings can also be seen in the economic branches
Behind the change in earnings at the national economic level, there are significant differences in terms of the employer's economic branch. In 2023, the average earnings increased in almost all sections of the national economy, and they only decreased in the areas of public administration and defence due to the base effect of the weapons money paid in February 2022. In this section, the distribution of earnings changes showed a much higher share of workers affected by decreasing earnings (31.2%) compared to the other sections.
In 2023, average earnings in the sections of industry increased at a rate above the national average, and in line with this, the share of workers with decreasing wages fell below 10%, with the lowest in the energy industry at 3.7%. The share of those with a growth of 25.0% and above was the highest in water and waste management, energy industry and mining, while in manufacturing most workers' wages increased between 15.0% and 24.9%.
Within business services, earnings growth was more subdued in wholesale and retail trade as well as transportation and storage. Here, the share of both declining and strongly increasing earnings - above 25.0% - was below the national economic average. The considerable wage growth in administrative services was determined by the fact that the edge of the distribution strengthened, and although the share of those with declining wages was high compared to the other sections, the proportion with a wage growth of 50.0% and above was also significant.
Within public services, in health and social work, the third phase of the medical pay rise (11%) and the payrise for professional workers in July (18%) also contributed to a low proportion with lower earnings (9.9%), while the share of the earnings category with an increase of 5.0%-14.9% was particularly high.
In education, the end of the year payrise for teachers resulted in an average increase in wages. The proportion of those with decreasing wages was also low in this section (8.1%); however, the share of those with wage increases of 50.0% or more remained the lowest in the national economy (3.0%).
Persistently high inflation dampens the purchasing power of rising earnings
In 2023, the high annual inflation resulted in a 2.9% decline in the purchasing power of earnings, despite the significant wage increases. In accordance with this, the net wages of more than six tenths (61.8%) of full-time employees – without tax benefits – lost their purchasing power.
During the studied period, the proportion of those with earnings increasing in real terms was the highest (71.2%) in the first quarter of 2022. However, due to the strongly growing and persistent inflation, their proportion dropped to 60.6% by the end of the year, which was more than 6 percentage points below the share measured in a stable inflation environment in 2020.
Expected next release of data for the first quarter of 2024: June 2024.