The middle class in the Czech Republic is increasingly falling into poverty despite low unemployment rates and rising wages. More individuals are turning to child and housing benefits for support, signaling that the measures designed to protect the most vulnerable are not effective.
This trend is highlighted by an analysis of the social isolation index, compiled by the Agency for Social Integration since 2016. The index tracks the number of people receiving living and housing benefits, dealing with court-ordered debts, experiencing long-term unemployment, dropping out of school, or failing to complete basic education.
Lucie Trlifajová, an expert from the Agency for Social Integration, explains, “The working middle class in the Czech Republic is becoming poorer. The worsening situation is usually linked to rising unemployment, but in recent years, this has not been the case. The Czech Republic has had the lowest unemployment in the EU for a long time, but at the same time, there has been the steepest decline in real wages. The number of housing benefit recipients is growing… The largest increase in recipients is observed not in typical regions, but particularly in the areas around Prague.”
Data reveals that other major cities are also experiencing an uptick in those reliant on social support.
Debt expert Barbora Galířová notes that the largest surge in people with debts is seen in the Central Bohemian Region. “Locally, we were surprised that people from the lower middle class, with higher education, started coming to consultation centers,” says Galířová.
The analysis points to high inflation, rising energy costs, and declining real incomes as key factors behind the growing need for support. Additionally, changes in the support system, such as adjustments to housing benefits and an increase in the amount of child benefits, have been implemented. Families now eligible for child benefits can earn up to 3.4 times the subsistence minimum, up from 2.7.
