Czech Leader Vows More Pressure on Foreign Investors Over Wages

  • Sobotka supports trade unions’ push for higher salaries
  • Premier says government will continue raising minimum wage

Foreign owners of Czech businesses will face more government pressure to raise wages, Prime Minister Bohuslav Sobotka said, highlighting a key campaign theme for fall elections.

Salaries in the richest ex-communist European Union member are still too low and represent a “serious problem” for the economy, the premier said after meeting with union leaders in Prague on Tuesday. Sobotka’s Social Democratic Party will seek further increases in the minimum wage so that it reaches at least 40 percent of the national average by 2018, he said during a televised news conference.

“Multinational corporations got used to Czechs working for significantly lower wages than their western counterparts, and they are taking advantage of it,” Sobotka said. “We must maintain permanent pressure on them to raise their salaries.”

Pay increases have emerged as a major concern for the Social Democrats, who are struggling to regain popularity six months before parliamentary elections with an economic platform that also includes higher taxes for top earners, banks and large companies. The party is trying to close the gap on billionaire Finance Minister Andrej Babis’s ANO party, which is leading in all opinion polls by a wide margin.

Read more about Sobotka’s push for higher wages at private companies

Sobotka has clashed with large international corporations. In December, he pushed retailer Royal Ahold Delhaize NV to increase wages at its Czech stores after appealing to the Dutch government to support his efforts.

While the Czech economy has been growing faster than the euro area and the country has the lowest unemployment in the EU, salaries have been slow to catch up. Twenty-seven years after the end of communist rule, the Czechs still take home only about a third of the average pay in neighboring Germany.

The growing economy and an acute shortage of labor has emboldened workers to demand better pay, less overtime and other benefits. Sobotka has publicly backed the unions’ nationwide campaign called the “End of Cheap Labor.”

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