The Czech government approved a 1,600 crown or 9.2% increase in the monthly gross minimum wage to 18,900 crowns from January, Labour and Social Affairs Minister Marian Jurecka said on Wednesday.

The increase is aimed to partially catch up with inflation which soared over the past two years.

The extent of wage growth at a time of economic contraction and low unemployment has been a key factor for the central bank in its monetary policy deliberations.

The minimum wage is only earned by about 118,000 Czechs among the roughly 5.2 million working population, but it serves as a benchmark for guaranteed wages in some professions, and a general indicator.

Unions had demanded a 2,200 crown increase while employers had said a 1,000 rise was acceptable.

Experts: minimum gross decent wage should be CZK 40,912

The minimum gross decent wage for a full-time job in Czechia that would cover the needs of an adult with a child, as well as leisure time and small savings, should be CZK 40,912. I

n Prague, it should be CZK 42,776 due to the higher cost of living. The estimate was presented by a team of experts from the independent and informal Platform for a Minimum Decent Wage.

With such a wage, people would be able to cover the costs of food, housing, clothing, transportation, healthcare, education, and free-time activities but also be able to pay for other important expenses, including savings for unexpected expenditures.

According to the experts, 63 percent of Czech employees don’t reach the minimum gross decent wage.