Although real wages have fallen, profits for many corporations have continued to rise over the past year. There is therefore room for wage increases at many employers. Public employers should also set an example. The state can influence wage levels favourably by raising the minimum wage or by setting wage criteria in public contracts or subsidy programmes.

184,000 people fell below the threshold year-on-year as their costs rose faster than their wages. 57 per cent of employed men and 71 per cent of women fell short of the calculated minimum decent income. This is due to the lower remuneration of women, the so-called gender earnings gap.

The state of social services in residential care is alarming, with 92% of employees earning below a decent wage. Some employees add part-time jobs to their already demanding full-time work, while others even have to apply for housing benefit or other benefits due to insufficient income.

It is no longer true that those who work at least have a decent life. Unemployment is not rising, yet the situation of households is worsening. This fundamentally distorts the social consensus.

We have had an exceptional period of extreme inflation coupled with an economic downturn. For low-paid workers, the threshold for a decent wage has been pushed even further away. Costs have risen more than their nominal wages.

Even with low unemployment, living standards are not rising, food bank clients are increasing, some households are not saving and are going into debt, and stress is reflected in children’s health and school performance.

This year we raised the topic of collective bargaining. One of the reasons for this is that the current government has committed, through a European directive, to more than doubling the coverage of employees through collective bargaining. The second is the coincidence of high inflation with insufficient nominal wage growth in the Czech Republic. One of the causes is precisely the weak position of employees in wage bargaining.

The Czech Republic is one of the countries in Europe where wages are falling the most. The first reason is that the state plays a significant role as the primary employer in the health, education and social care sectors. The second is above-average inflation in international comparison. The third is political-economic pressure to keep wages from rising. A wage-inflation spiral is being haunted, even though inflation is driven more by corporate profits.

The influence of union density on wages is quite crucial. In the Czech Republic, only 13 per cent of workers are unionised, while in the Scandinavian countries two out of three employees are. This is matched by the low wage levels in the Czech Republic. Contracts reached by collective bargaining are on average CZK 6,500 higher than the average wage.

Thus, despite working full-time, most of society can hardly cover usual expenses in a way that makes them feel comfortable. For many of them, according to the analysis, this means economic insecurity, additional work and, as a consequence, less free time, time with family or going into debt.

The society is paying the price for low wages. Political radicalization, low purchasing power, generational poverty, dependence on social benefits, the growth of the informal economy, or even civic resignation and disillusionment with post-socialist development.

We call the labour market a market, but the parties, i.e. employers and employees, are not on an equal footing. The weaker party is always the worker, whose real income from work has not been addressed for many years, neither by governments, nor by designated authorities, nor even sufficiently by collective bargaining mechanisms between representatives of employees and employers.

The worst case scenario is that you get a bill for utilities and you can’t afford it. That’s the main risk. Costs rise out of proportion to your income, putting pressure particularly on people who are below the Decent Living Wage. For them, it’s an existential risk that if it’s not addressed with some help, they just can’t cope with the situation.

We often hear about the importance of so-called financial literacy, which should prevent people from taking out unfavourable loans or, in the worst case, ending up in foreclosures. It is certainly a necessary thing, but before all the useful lessons, it is necessary to put before all the useful lessons that first of all it is necessary to have a sufficient amount of money, which is then subject to prudent management.

We are counting on a total of 12 per cent of salary per month, which would be worth saving. We allow for five per cent for one-off and unexpected expenses, such as buying and renewing white goods, and for the remaining seven per cent we calculate that people should put it aside for retirement savings and other insurance. This is lower than most expert recommendations, which reckon, for example, more like 10 per cent of monthly wages for retirement alone.

Long-term low wages have a noticeable impact on people’s quality of life. People who are underpaid are much more likely to fall into debt traps, often have to work to the detriment of their leisure time, face health problems more often and find it much harder to cope with rapidly rising housing or energy prices.

Despite declarations that the wage tax reform the year before last would help people’s wallets, it has not been felt by many. It has helped middle and upper class people. The benefit to those on low incomes has been none or so small that the current inflation has managed to erase it.

Not only people with low qualifications, but also people with higher education will not be able to clerks in town halls, social services workers, but also university teachers, theatre staff and philharmonic musicians.

The move to online teaching has shown how important it is to have an internet connection, or sufficient reserves to deal with the situation where an additional computer is needed because teaching is done over the internet. When online teaching was introduced, the government expected everyone to have computers. This shows exactly how exclusionary it can be to not have something that’s seen as standard.

We know from history and from much current research that economic and social stability, and the associated sense of fairness that one’s own efforts are adequately valued by society, are important for trust in social arrangements. Without decent material security for all, liberal democracy can hardly thrive.

We are building on similar foreign initiatives from the last thirty years, because it has become clear that the minimum wage has slowly ceased to fulfil its protective function and today no longer guarantees even an elementary decent life. Adequate wages are the basis for social reconciliation, as the Universal Declaration of Human Rights also states.

This makes it difficult for a large part of society to cover current expenses despite working full time. This takes a toll on individuals and their health, relationships or children’s education, as well as on the prosperity, resilience and cohesion of society as a whole.

A minimum decent income with the possibility of small savings is important, especially in times of crisis. People can have a reserve when their income falls. The household is able to respond to a short-term shortfall. This means less burden on the state.

Even the lower middle class in large cities, such as workers in the cultural and hospitality sectors, do not have a decent minimum wage. Even social services workers do not make it. Even the lower middle class in large cities, such as cultural and hospitality workers, do not have a decent minimum wage. Nor do social services workers.

The items do not include the cost of any more expensive special needs. The details of the individual items are open to debate, but this does not call into question the need for an instrument to hold up a mirror to current income indicators and to contribute to the debate on the economic strategy of the Czech Republic.

Long-term stress from potential financial difficulties has been shown to translate into poorer mental health and ability to concentrate or relax, but also a higher risk of physical illness. Too much work and too little leisure time are to blame, as is the consumption of poorer quality food and weakened immunity due to stress and the inability to fully relax.

What makes the Minimum Decent Wage so crucial, among other things, is that it shows what you really can’t save on. It is an absurd idea to decide whether one saves more on food or on health. Yet it is a choice that half of us have to make in some form.

The purchasing power here is extremely low, almost the lowest in the EU. We compete with Asian countries on low wages, despite being an EU country. When people talk about poverty in the Czech Republic, they mention welfare recipients, the unemployed or people in ghettos. However, we do not talk about economic insecurity, which affects many more people. It manifests itself in a strong sense of frustration, of invisibility.

None of the indicators such as average gross wages or minimum wages say anything about how to live on that money, because the numbers are rarely put into context. In particular, for example, in debates about raising the minimum wage, it is rare to see the question of whether it is possible to live on this amount of money.

The Platform for a Decent Living Wage, which brings together experts from public and scientific institutions, trade unions and non-profit organisations, calculated how much a person should earn to cover their expenses. What is meant by a decent wage?