Czech workers flex industrial muscle as economy grows

Škoda factory (Wikimedia/creative commons)

In April 2018, the number of available jobs was for the first time more than the number of (officially) unemployed people in the Czech Republic. Unemployment, according to September figures, stands below one quarter of a million (3 %), which is the lowest in Europe.


Also in April of this year, management at the Škoda Auto car factory, the largest private company in the country (according to both sales and profits), were forced to agree on an unprecedented almost 20 % rise in wages, including bonuses. An agreement was reached with management after it became clear that the Škoda workers were eager for all-out strike action. Their wages, before tax, are now nearly 1900 euro per month, though this is still only about half of what workers at German VW plants receive.

The car industry story, in some ways, represents whole development of the Czech Republic. It developed at high speed over the last few years as cheap industrial base for the EU. To characterise its position as an appendix or the “17th Bundesrepublik” of Germany, is not such an exaggeration.

But the rosy picture painted by Czech politicians and economists is far from the everyday experience of working class and middle class people fighting continual increase in prices (rents in Prague are now 10-20 % higher than in Berlin). Almost one million people (10% of the population) live under constant threat of poverty. Hundreds of thousands of migrant workers, mainly from Ukraine and other deprived Eastern European countries, are working and living in terrible conditions, dictated by “labour agencies” that are repressive state bodies.

There is growing self-confidence on the part of the working class thanks to its unique position during the economic upswing. This integrates hundreds of thousands of new workers into the workforce, in some cases after whole generation of unemployment, deprivation and life on the outskirts of society. This process includes mainly poor women, people from Roma origins, and others.

The lack of labour means individual capitalist companies are offering higher wages and calling for an influx of cheaper labour from Ukraine, Slovakia and Poland. Union power is strengthened. The biggest trade union association, ČMKOS, announced an increase in membership of 14,000 last year. Even though the union leadership runs campaigns like, “End cheap labour” or “Shorten the working week”, it remains, so far, mainly a propaganda tool, with no real attempts to mobilise workers or plan strikes for better terms and conditions in the workplaces.

The result is a gap between wages and profits, which continues to widen. While GDP is nominally almost 40 % higher than it was in 2009, average wages increased only by 25 % over the last ten years. The average wage is around 12 euros an hour (in comparison to 33 euros in Germany).
Since the global financial and economic crisis of 2008-2009, most of the main ideological pillars underpinning the restoration of capitalism in the Czech Republic are being eroded in the eyes of many people. In the 2017 elections, parties directly connected with process of smashing remnants of the former planned economy, and social state, and introducing neoliberal reforms, did not reach even 30 % of the vote, combined, and the polls now do not signal any substantial revival for them. The capital city, Prague, will most likely be now governed (local elections took place during the first weekend of October) by a new middle class formations that are moderately critical towards neoliberalism. Millionaire, Andrej Babiš’s populist project, the movement, ‘ANO 2011’, would win 30 % if parliamentary elections took place now.

The current government of the ANO and the social democratic CSSD, supported by the “communist” KSČM party, is just the cherry on top of an absurd cake. Both “left” parties involved in this unholy coalition lost support in the last elections (parliamentary elections in 2017 and local/senate elections in October 2018), falling close to the 5 % threshold needed to enter parliament. On current projections, both parties will be wiped out in the next elections, losing all important positions.

Their liability comes from acting in full accommodation with the oligarchs’ system. The KSČM acts as useful idiot to the nationalistic, anti-immigrant wings of elites represented by President Zeman. He tries to express the ambitions of those parts of the oligarchy that feel confident enough to balance between the EU and Western ‘allies’ and interests with Russia and China.

Explosive mix

The only real new forces on the rise are the SPD, a party inspired by the right-wing AfD and Freedom Party (the SPD’s counterparts in Germany and Austria), and the Pirate Party, which is able by its moderate criticism of the establishment to gather a large but passive vote of predominantly young people in bigger cities (and as the Green Party retreated from this field after its involvement in a right wing government from 2010-2013). Together the SPD and Pirate Party won 11 % in 2017 elections.

The economic developments of recent years are the only real explanation for politically amorphous, semi-populist forces, like ANO and Pirate Party, being pushed to the fore. The Pirate Party represents optimism on the part of skilled professionals and smaller businesses. Wider sections of the forgotten masses, predominantly in outlying regions, look to the SPD which plays on their fears and anger using right-wing populist and racist arguments.

To try to keep some support, we have seen visible but insufficient reforms by the ANO-led government. This includes a substantial increase in the official minimum wage, by 50 % over the last five years, to 470 euros (which, in reality, only copies the “invisible hand of the free market” given the lack of labour). A freeze of public sector wages may also be ended. All this is only possible due to current economic growth.

Resistance has taken place, even in this, seemingly, time of ease. The rent crisis is a key local campaigning issue, such as a growing number of local protests against big business developers’ projects, and real estate companies trying to build on green spaces, with the full support of establishment politicians. As well as Skoda more or less similar situations of labour disputes are developing in other private companies. Educational and health care systems are critically underfinanced and staff are overworked (workers in Czech Republic work some of the longest hours in Europe). Youth are fed up with old corrupt system of the last 30 years and are very sensitive to racist, sexist and homophobic policies emanating from all the main political parties.

It is this, potentially explosive mix, which is already creating huge political and social tensions. And it is this field where revolutionary socialists must act to widen, radicalise and escalate the first acts of protests wherever they appear. Socialists need to strive to connect and unite these protests and campaigns in a more generalised fashion, towards creating a new mass workers’ and youth movement. In such a mass party, Marxists will argue to develop a socialist programme and policies that aim to bring down capitalism and to build a democratic, socialist society – doing away with the wastage, mismanagement and horrors of bourgeois rule, and rejecting the previous bureaucratic and undemocratic burden of the former Stalinist system.


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October 2018