The annual survey of the Czech Statistical Institute (ČSÚ) called SILC produced a detailed report on the financial conditions of households for the year 2022. Net incomes grew by less than eight percent, which, however, with fifteen percent inflation, meant that people could buy seven percent less than in 2021.
The crisis hit the tenth of households with the lowest incomes, in other words, the poorest, the hardest. In real terms, their incomes decreased by almost a tenth, so in 2022 these households had to make do with an amount per person 750 crowns lower than the year before.
The situation was not so bad for middle-class households, which “only” lost a twentieth of their real income due to inflation. In their case, this means that they had 900-1000 crowns less per person per month, but due to the higher standard of living, it does not hurt them so much, or they can use the savings.
At the press conference, the Chairman of the CZSO, Marek Rojíček, did not comment on the deeper drop in incomes of the poorest. Instead, it said the number of people at risk of “income poverty” had fallen in 2022 and remained among the lowest in the EU.
However, such a reassuring result can only be achieved by looking at it from a speed camera, i.e. by using the method of the Italian sociologist Corrado Gini, which basically just compares the incomes of the richer and poorer half of the households. Therefore, some dimensions of the detailed investigation are not affected by SILC.
The CZSO researchers found that since 2019, the financial situation of two million Czechs from the lower classes has been continuously deteriorating – both in comparison with five million members of the middle class and also with three million members of wealthier households. This corresponds to the long-term experience of experts from the Institute of Sociology of the Academy of Sciences, according to which the income gap between the poor and the rich opens in times of crisis, for example in 2008-2013, and closes in periods of prosperity, specifically in the period of 2013-2019.
For example, families belonging to the poorest million had 28.2 percent of the income of the second richest million in 2022. At the same time, in the times before the crisis, they earned or received 30-31 percent compared to the second richest million. It’s not a small thing. If the ratio from 2017-2019 were maintained, low-income families would have a monthly income of up to 1,000 crowns per person.
Ill-considered government interventions during the crisis years contributed to the deepening of the gap between the poor and the middle class. The SILC survey shows that in both 2020 and 2022 the incomes of the lower middle class grew the most. This is due to the extraordinary valorization of pensions and blanket benefits to support families with children and for housing. Thanks to this, few pensioners fell into the ranks of the poorest, at the same time, benefits helped to maintain the standard for middle-class families with children. The abolition of the super gross wage in 2021 and the associated decrease in income tax again helped the upper middle class the most.
At the same time, no special help from the governments of Andrej Babiš or later of Petr Fiala was aimed at the poorest fifth of households, which primarily includes families of the unemployed, single mothers, or employees with a minimum wage.
The SILC investigation thus confirmed the truth of the critics, for example sociologists from the scientific group IDEA or the agency PAQ Research, who had previously pointed out that the abolition of the super-gross wage or the widespread distribution of benefits will mainly help those who do not need it.
