November the 24th, 2023 – Croatian salaries, at least on average, have increased by 144 euros in one year. While that is encouraging, how does the country stand against other EU Member States?
As Poslovni Dnevnik writes, the growth of net Croatian salaries that began back in March of this year has continued on an upward momentum. On average, Croatian salaries compared to September last are 226 euros higher on average, while the average gross wage stood at 1,596 euros, according to Novi list.
The lack of qualified staff still remains a burning issue
The reasons for the increase in Croatian salaries lie in the increasing demands for increases due to the loss of real disposable income during the last year thanks to inflation. In addition, the lack of a qualified labour force continues to be a very serious problem faced by employers across many sectors.
Given the lack of qualified labour, by raising Croatian salaries, employers can manage to retain their existing employees and thus reduce the costs associated with employment, RBA analysts state, adding that the overall growth of wages in the private sector is also favoured by the growth in the number of employees in the IT industry.
As such, the increase in Croatian salaries is a direct consequence of inflation, but also a lack of workers. In turn, this is a consequence of ongoing emigration, meaning that local employers have to increase the wages they pay in order to keep hold of their workers, economic analysts note.
Croatia is in third place among the newer EU Member States
According to the analysis of the Vienna Institute for International Economic Studies, in terms of the average gross salary in the first quarter of this year, Croatia came in third place among the new EU countries Only the Slovenians and the Czechs have higher average salaries, while Croatia remains stuck in a “dead race” with the Poles.
Compared to the countries of the more immediate region, the average Croatian net salary is a quarter lower than the Slovenian one (1,432 euros) and a third higher than the one in Serbia (730 euros). This is a continuation of the pattern from the time of the former Yugoslavia, according to the Vienna Institute, when the highest salaries were in Slovenia, followed by those earned here in Croatia, writes Novi list.
However, the trade unions note that the idyllic picture of Croatia ends precisely when the net rather than the gross salary is taken into account. Namely, more than 820 thousand people, i.e. half of the total number of Croatian employees, receive a salary in the range from the minimum salary, which is 560 euros, to the median salary, which is now 998 euros.
At the same time, the unions note inflation, which is among the highest in the entire Eurozone, right after Slovakia. The rise in food price is also an issue, as they have been rising for a year and have eaten up a good part of the population’s disposable income.
Could Croatia find itself in an inflation spiral?
On the other hand, economic analysts warn that Croatia could find itself in a spiral of inflation: as wages increase, prices also rise, which in turn requires higher wages and that can just go on and on indefinitely.
While the average salary in Croatia is now 1,156 euros, Croats want at least 1,335 euros per month from their employers, according to a survey by the Moj posao/My job portal, where the salary is still the main criterion for choosing a job. Interpersonal relationships come in second place, and working hours come in third place in terms of priorities when choosing a job.
According to that survey, as many as 68 percent of respondents intend to change jobs in the next year.
Although there are fewer and fewer workers in general across Croatia, and employers are finding it increasingly difficult to find a workforce, it’s interesting to note that more than half of those surveyed (56 percent) state that they don’t receive a response from employers to their job application, that is, they never or rarely receive feedback on their applications for jobs.
According to the minimum gross salary, which in Croatia currently stands at 700 euros, and the net sum amounts to 560 euros, Croatia is in the middle of the ranking of new, transitional members of the European Union. Slovenia, Lithuania, Poland, the Czech Republic and Estonia all have a higher minimum gross salary than Croatia, Slovakia has the same minimum wage, while Hungary, Latvia, Romania and Bulgaria have a lower wage.
At the same time, RBA analysts pointed out that net Croatian salaries make up only 47 percent of the average gross salary, as it does in Poland, while in Slovenia it is 61 percent.