Relations between growth of wages and labour productivity

  • Martina Novotná University of South Bohemia in České Budějovice
  • Tomáš Volek University of South Bohemia in České Budějovice
Keywords: labour productivity, wages, CZ-NACE sections

Abstract

The main aim of this paper is to compare relationship between growth of average monthly wages and growth of labour productivity in South Bohemia region and in the Czech Republic. Economic theory tells that the growth of wages should be bigger than growth of labour productivity. When we compare the index ratio growth of average real wages and labour productivity, we have found out that the labour productivity grows faster than real wages. There is no demand-pull effect on inflation. The sectors manufacturing and agriculture have main contribution for growth of labour productivity. This trend is caused by modernization of machinery equipment and by the shortage of free human resources in the labour market. On the contrary, the wages at the sector of services grows more than labour productivity.
Published
2012-09-21
Section
Articles