Communist and Transitory Income Distribution and Social Structure in teh Czech Republic
Creators: name: Vecernik, Jiri
name: Vecernik, Jiri
Publisher: name: Unknown
Year: 1999
Subjects: International Development

description: Statistical and sociological evidence is gathered to display changes in social structure of the Czech society before and after 1989, with a special focus on economic inequalities. In the first part, frozen landscape of the communist regime is observed. Behind the facade of forced social homogeneity, privileges of party nomenclatura on the one hand and poverty of sections of the population excluded by the 'class war' on the other hand took place. Within the narrow range of earnings, preferential treatment was given to heavy manufacturing, manual occupations and the generation of 'founding fathers' of the communist regime. Along with the equalized wages, various sources of extra income developed which caused larger hidden disparities. In the second part, after the 1989 reforms are described which liberalized labour market and introduced a new system of social protection, with guaranteed living minimum as a core. Privatization brought about small entrepreneurs on the economic scene and opened new opportunities. Fed by both rising disparities of wages and business income, the distribution of household income became considerably larger, mostly due to rapidly increasing highest incomes. Among income predictors, the importance of labour market characteristics of economically active individuals reinforces instead of demographic characteristics of households which dominated until 1989. In redistribution of income through taxes and benefits, the progressiveness of financial flows strengthens as the system moves from family life-cycle to labour-market shape. In the third part, the sources and groups of emerging new social stratification are described. While the political elite was exchanged almost completely, recruitment of the economic elite can be rather called a 'revolution of deputies'. Regarding small entrepreneurs, the system was not very supportive, unlike generously credited former state firms. Regarding white collars, expectations concerning the return to their previous position have been left unfulfilled: the rise of financial sector and public administration contrasts with the stagnation of education and health services. Up to now, the degree of social deprivation is generally low in the Czech Republic, what is caused by still quite low levels of income disparities, the good performance of the social system and until 1997 also the economy. The exception is the Roma ethnic, extremely vulnerable to all the risks of the market economy. In the fourth part, various mobility flows are observed. While objective changes in socio-economic composition of the economically active population are significant but far from impressive, there is much more subjective movements, reflecting among other collective mobility. In comparison with its reforming neighbours, the Czech population declared the most stability and upwards mobility. Data also witness growing consistency of education, job and income as well as strengthening links between the objective situation and subjective location in the social hierarchy. Regarding social cohesion as it is indicated by perceived levels of conflicts, there has not been significant increase over time which would signal social polarization of the society. In the conclusion, limited expansion of the middle class is stressed as the main failure of the development after 1989. The government was much more interested in the transformation of existing enterprises than in the creation of favourable conditions for the new entrepreneurs. It allowed the expansion of the financial and administrative sectors but it neglected the public services of health, education and research. It turned out that in fact, the new political elite concluded the imaginary social contract with the upper strata - financial capital, top management and bureaucracy, many of whose members belonged to the former nomenclatura - rather than with the middle class. This was reflected by a shifting of opinions and voters' preferences to the left and by increasing expectations of state protection.