The value of wages is experiencing a concerning decline, and the repercussions are disproportionately affecting individuals with low incomes. Alena Zieglerová from the Institute for Social Inclusion highlights a disconcerting trend: even the lower-middle class, traditionally less reliant on food banks, is increasingly seeking assistance from these institutions.

Despite nominal increases in the average wage, its actual purchasing power has fallen by nearly one percent. This marks the most prolonged decline in real wages in recent history, particularly impacting those with lower incomes. Strategies that have historically provided some relief are proving ineffective in the face of this sustained economic challenge.

The current crisis is distinct in its heavy reliance on inflation, presenting a stark contrast to previous economic downturns. The rising costs of essentials such as food, coupled with increased energy prices and housing expenses, leave individuals with fewer options to save money. This inflation-dependent crisis has disrupted the usual coping mechanisms of those grappling with financial strain.

Traditionally, part-time jobs have served as a recourse for individuals facing financial constraints. However, impending changes to the conditions of such agreement-based work, set to take effect next year, have sparked concerns. The labor market is already experiencing a cooling interest from employers towards contract workers, adding another layer of challenges for those seeking additional employment.

The evolving economic landscape has led individuals to turn to services and benefits they never anticipated needing. A noteworthy example is the increasing reliance of the lower-middle class on food banks, where individuals now visit discreetly to avoid potential recognition and shame. This shift has transpired over the past year and a half, with parents of small children expressing the need to overcome embarrassment for the sake of their children’s basic needs.

Simultaneously, there has been a surge in interest in debt counseling, even among individuals who previously prided themselves on self-sufficiency. Individuals with multiple jobs find themselves struggling amid the prolonged and deepening crisis, redefining their financial realities and prompting a reassessment of available support services.

Article by Prague Forum