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GRANT

journal

ISSN 1805-062X, 1805-0638 (online), ETTN 072-11-00002-09-4

EUROPEAN GRANT PROJECTS | RESULTS | RESEARCH & DEVELOPMENT | SCIENCE

Wage development in Slovakia, selected influential factors

Eva Rievajová
Simona Hyžová

2 Faculty of Social & Economic Relations, Department of Management and Human Resources Development, Alexander Dubcek University
of Trencin, Slovak Republic

Faculty of National Economy, Department of Social Development and Labour University of Economics in Bratislava, Slovak Republic

Grant: 1/0037/20
Name of the Grant: New challenges and solutions for employment growth in changing socio-economic conditions
Field specialization: AH - Economics

Abstract The contribution is focused on assessing wage
development in the Slovak Republic according to criteria selected in
advance. The object of the research is the average gross monthly
wage and the minimum wage in the monitored period, from 2007-
2019. This also includes the period after the global financial crisis,
which brought negative fluctuations to the labour market. Among
the basic criteria through which the development of the average
wage is monitored are sex, age, education, region and sector. Wage
development is an important economic indicator which has
a significant impact on the competitiveness of businesses on the
microeconomic level and on the macroeconomic stability of the
economy as a whole. A wage is a regularly studied indicator of
statistical monitoring and is also compared in the context of
transnational observations. Wages are in many businesses the most
important component of expenses, the most exact planning of which
is important with every strategic decision. Therefore, the monitoring
and forecasting of wage development in economy, or more precisely
in key sectors, comprises important information.

Keywords average wage, minimum wage, wage development,
factors of influence, labor market, unemployment

INTRODUCTION

Wage plays an important role in the life of every person. It is a
means of satisfying basic life needs and should be remuneration for
the work of an employee. Wage, work, employment or
unemployment are concepts that people come across nearly every
day. From the early existence of humanity a wage has played an
important role in people’s lives. In the oldest times people were
rewarded with a natural wage, which provided them with food and
served as a resource for exchange in trade. As time went by, work
began to be appraised with money, but the value of money changed
over time, as did the value of work, and the economy developed
continuously. The price of food, property or energy is constantly
increasing; therefore, if wages remained on the same level, people
would not have the resources needed for subsistence or other items
for increasing their standard of living. In a market economy a wage
arises by virtue of the supply and demand for labour forces, and we
understand it as remuneration of a worker for work done, or in the
broader sense the price for the worker’s labour. A wage represents
the result of a functioning labour market and at the same time we

can also see it as a certain form of agreement between an employer
and an employee. At the same time, the state tries through its
policies to secure working citizens a basic living standard and a
claim to a dignified life through the setting of a minimum wage.
Because it is workers who with their incomes influence to a great
measure the development of the economy through their share in the
GDP (Bucevska, 2011).

At present a great problem is the unwillingness of some people to
work for a minimum wage, because they prefer to register with the
labour office and collect some form of state support. On the other
hand, a large group exists who would like to work even for a
minimum wage but who cannot find work and live on the margins of
poverty. Before entry to the labour market it is important to know
the present state of wages in the Slovak Republic and the influences
that affect wage levels. Several factors influence wage development,
such as the situation on the labour market, inflation, work
productivity, technology, globalization, financial markets and labour
market institutions, as do age, sex, education, work experience,
region; in addition, the diverse nature of work or exceptional
capabilities and skills of individuals also play a part. The global
financial crisis left the most significant impact on the labour market
in Slovakia after 2008 and the following 5 years, although the
situation was more evident here than in other affected countries.

The aim of the contribution is to create a relevant image of wage
development in Slovakia, its regions and sectors, to assess the
impact of individual factors on the amount of wages and also to
predict the possible trends of future development.

DEVELOPMENT OF THE AVERAGE AND THE

MINIMUM WAGE IN THE SLOVAK REPUBLIC

Table 1 shows the favorable development of labour market
parameters which we can monitor in the previous two years.
Continuing growth in the measure of employment versus 2017 (by
1.3 percentage points) was accompanied by a decrease in the
number of unemployed (by 19.9%), a decline in the measure of
unemployment to an historical minimum (6.6%), an increase in the
number of jobs available (sectors of industrial production showed
more open jobs by a third), or additional acceleration of growth of
the average wage (4.4% growth and real wage growth).
Furthermore, the result of this favourable development was

Vol. 9, Issue 1