? As Hewlett Packard reportedly considers moving part of its operations to the Czech Republic, I wonder: are labour markets as flexible as they say east of the former Iron Curtain? The minimum wage in the Czech Republic currently stands at around €1.83 or ?1.60 per hour, after the government rejected calls for an increase during these recessionary times. Overall, union membership in the nation has dropped since the fall of communism two decades ago. This means that the largest Czech labour?union now has half a million members in a country of 10.5 million which equates to about 5% of the population. Yet?union membership has been on the rise recently, as eastern Europe feels the chill wind of the economic downturn. According to Reuters, more than 20,000 unionists demonstrated for workers rights earlier this month in Prague as layoffs across the country boost the unemployment rate to 7.9% from 5.2% this time last year. The jobless rate across the UK has been gathering pace this year as foreign firms relocate to countries with cheaper manpower, loser labour laws and a lower tax burden. Meanwhile, the number of Britons claiming unemployment benefits saw its sharpest increase in the first quarter since back in 1981. Still, that doesn’t mean more people are joining the unions. In fact, the number of members shrank 1.5% last year to 7.2 million, equal to 12% of the population. Here in Britain economists reckon the spate of plant closures and falling prices?for food and clothes?could?encourage workers to curb their salary expectations. Despite fears of such a “deflationary spiral,” the minimum wage rose 3.8% in 2008 to ?5.73 an hour. In Prague such a rate would buy you 3 and a half hours’ more work.? Perhaps it’s time to take a reality “Czech.”

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HP’s Reality Czech

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