How low is the standard of living in Slovakia?

The issue of low wages in Slovakia often becomes a hot topic of discussion and an important reason why many people choose to work abroad. Compared to Western countries, Slovakia's wage levels are significantly lower, with incomes in Western countries typically being two to four times that of Slovakia. This income gap has led to increasing dissatisfaction among many people with wage levels.

The fundamental reason for this situation can be traced back to the early 1990s when the Slovak economy was in its infancy.   Although the socialist period consumed a considerable amount of capital wealth, Western countries have established significant economic advantages through decades of capitalist development, and this gap can still be seen today from the wage gap between West and East Germany.

In addition, the difference in wage levels is not only influenced by the capital intensity in the economic structure, but also by labor productivity, that is, the output of work per hour. The low income of Slovaks is not just a subjective feeling, but a fact supported by statistical data. However, caution should still be exercised regarding some data and interpretations related to Slovak wages. Among the V4 countries, Slovakia and Hungary have the lowest income levels; The income of the Czech Republic and Poland is significantly higher than that of these two countries. Slovaks' food expenses are even higher than the European average.

According to data released by the European Statistical Office, the average annual income of childless citizens in Slovakia over the past year was 12744 euros. This level is similar to Hungary, Croatia, and Latvia, but 2000 euros lower than Poland and 5000 euros lower than the Czech Republic. The income levels in Bulgaria and Romania are significantly lower than those in Slovakia. The annual salary in Germany is as high as 38000 euros, which is three times the income in Slovakia.

There are differences in the prices of goods and services among countries, so using purchasing power parity to compare wage levels can better reflect how much goods and services people in different countries can purchase with their own wages. At present, the standard of living in Slovakia is relatively low due to higher prices of goods and services, while wages are lower. The price level in Slovakia is rapidly approaching the average level of the European Union. Last year, Slovakia's commodity prices reached 91% of the EU average level. Although the previous proportion was 87%, the price gap has narrowed due to the impact of high inflation. Bulgaria and Romania have the lowest price levels, at approximately 77%; Poland has 80% and Hungary has 84%. The price level in Czech Republic is 99%, higher than that in Slovakia. However, in the first quarter of 2024, the average total salary in the Czech Republic was 1726 euros (net salary 1373 euros), while in Slovakia it was 1447 euros (net salary 1104 euros).

According to official statistics, Slovakia's economic level is 20 percentage points lower than neighboring Czech Republic. The main reason for this gap is that the Slovak government has not made substantial reforms in supporting areas such as business, education, and healthcare over the past decade. The Direction Party and its coalition partners attempt to maintain social stability through inaction, as reforms often provoke public opposition. The current government has also failed to make significant progress in these areas. If action is taken, it usually relies on billions of euros in funds from the recovery plan. At present, the current government has been in power for less than a year, and the progress of reform is still slow.