For these reasons, comparing total labor costs (or'super-gross wages'), or just net wages seems to be a much morereasonable solution to assess living standards of the local workingpopulations. Here's the 2006 data for V-4 countries: an average monthly salary of an employee in the economy, first converted into euro according to official 2006 yearly exchange rates, and then adjusted for the respective price levels (of 2004) relative to the European Union average.
-- SGW | ---- GW | --- NW | |
CZ | 1854 | 1374 | 1064 |
HU | 1531 | 1136 | 750 |
PL | 1634 | 1356 | 920 |
SK | 1250 | 988 | 768 |
Notethat GW stand for gross wage's purchasing power in euro, SGW for'super-gross wage' (including employers' social securitycontributions), NW - net wage. SGW and NW were calculated according to the OECD information on labor tax wedges in 2006.
Aninformed observer might spot that the purchasing powers of averagewages across V-4 countries do not correspond to GDP/head rankings ofthese countries. Slovakia, for example has higher GDP/capita in PPSthan Poland, but lower wages. In order to explain these differences,one ought to look closer at the labor productivity statistics, as wellas the local definition of a 'salary' as opposed to other income.
(this article appeared also on the Central-European Economics Watch blog).
