THE AVERAGE SALARY, THE LABOUR PRODUCTIVITY AND THE UNEMPLOYMENT IN THE FIELD OF BROWN COAL MINING

to these activities are dated back to medieval times – the first one, inscribed into the “Town book of Duchcov”, comes from 1403

. Coal mining represents the activity which is praised on one side since it brings employment (and thus money) to people in the region. This enables providing essentials of life and other needs. Mining also contributes to regional business activities and to the development of this region itself. Section Exploration and Mining By numerous organizations and various fellowships, however, brown coal mining is understood as the activity which negatively affects the landscape, air and environment. Nowadays, when longstanding discussions have been held on breaking limits of coal mining, lots of people (who work with regional mining companies) express their fears of their further destiny, their jobs, the ability to support families, the possibility to provide education for their children, etc. If mining limits are not broken and mining is finished within several years, consequences may affect not only particular families but the life in this region as well. Provided mining is finished, salaries are going to decrease together with the spending power of inhabitants. Business activities in the region would reflect it immediately. From these considerations it implies that unemployment in this region may increase – finished mining may thus have a very negative effect on the Czech state budget. The authors have set three goals: The first one is analyzing the development of particular indicators of labour productivity within selected Czech coal mining companies (2008 – 2012). These particular corporations are: Severočeské doly, a.s., Sokolovská uhelná Group, legal assignee a.s. and Czech Coal Group, a.s. In the context of labour productivity development, the development of average salary must be taken into consideration – i.e. whether these trends are consistent. This development is presented in connection with the development of average salary within the branch of “Mining and extracting” and in the Czech Republic as whole. The third and last goal of this paper is analyzing the development of unemployment/employment in the Czech region where brown coal is mined. THE ORETICALLY DEFINED FUNDAMENTAL CONCEPTS In the practical part of this contribution, values of three labour productivity indicators are defined on the general level. The first and essential one is the labour productivity, expressed as the ratio of production volume to the number of employees (the average registered number of employees), i.e.:  oyee tons/emplof thousandsemployees ofnumber materials) (worked volumeproduction typroductivilabour (1) The indicator of labour productivity derived from added value indicates the added value (expressed in money) which devolves upon one employee:  eeCZK/employ of thousandsemployees ofnumber value addedvalue added from derived typroductivilabour (2) The value of calculated indicator should be compared with the value of average income per one employee. The average income is calculated according to the formula:  eeCZK/employ of thousandsemployees ofnumber expenses personalemployeeper income average  (3) However, an adequate regulation is necessary in order to prevent a situation when some company does not operate because nobody wants to work there

. It should be valid 14th SGEM GeoConference on Science and Technologies in Geology, Exploration and Mining that if personal employment expenses grow, the indicator of labour productivity (as well as the indicator of labour productivity derived from added value) has to grow too. The average salary in the Czech Republic is – according to the Czech statistical office – calculated as the ratio of salaries without other personal expenses which devolves upon one registered employee per month. Compensations include basic wages and salaries, bonuses and supplementaries, various types of rewards and refunds which are accounted to employees within a certain period. No refunds of wages (salaries) are included in the case of temporary incapacity for work or a quarantine paid by the employer. In this case, the gross salary is referred, i.e. before the health insurance and social welfare expenses are taken off, as well as the income tax of physical persons and other due or agreed with the employer deductions

. The general rate of unemployment expresses the ratio of unemployed persons number to total workforce where both the numerator and denominator represent indicators developed according to international definitions and recommendations applied in the “Selective investigation of labor force”. The indicator is constructed according to the Eurostat methodology, developed under the recommendation of International Labour Organization. The total manpower means a number of employed people and those unemployed who actively look for a job – i.e. the economically active population

.  %nt unemployme of rate general manpower total unemployed ofnumber  (4) The rate of registered unemployment indicator (according to the Czech Ministry of Labour and Social Affairs) is expressed as the ratio of job applicants number (registered at the Labour Office of the Czech Republic) to manpower

.  %nt unemployme registered of rate manpower applicants job registered ofnumber  (5 ) The rate of employment (according to the Czech Statistical Office) is defined as the ratio of employed people to all individuals 15 years old and older

. DEVEL OPMENT OF LABOUR PRODUCTIVITY INDICATORS In order to assess developments of above mentioned selected indicators, data from annual reports of three coal mining corporations were utilized. Companies operate in the western part of the Czech Republic – i.e. in Ústí nad Labem and Karlovy Vary regions. These companies are called Czech Coal Group, a.s. (hereinafter CC), Severočeské doly, a.s. (hereinafter SD) and Sokolovská uhelná Group, legal assignee a.s. (hereinafter SU). In 2013, the Czech Coal Group a.s. was divided into separate mining companies of Vršanská uhelná a.s. and Severní energetická a.s. The development of basic indicator of labour productivity is presented in Table 1. From data it implies that both the Czech Coal and Sokolovská uhelná Group, legal assignee a.s., succeed very similar values; SD proves values of productivity 2 – 2.5 times higher than other two groups. The SU group has the least average values of labour productivity (1.87 x 10 3 tons /employee). The CC group exhibits the average labour productivity of Section Exploration and Mining 2.63 x 103 tons /employee. Maximum values of average productivity are attained by SD (4.55 x 103 tons /employee). Table 1: Development of labour productivity within particular mining companies in 2008 – 2012 [thousands of tons/employee] Year 2008 2009 2010 2011 2012 CC 2.43 2.41 2.53 2.80 3.10 SD 4.56 4.39 4.35 4.98 4.43 SU 2.08 1.87 1.89 1.77 1.67 Source: [annual reports of companies + authors] The fundamental effect on the basic indicator of labour productivity and other productivity indicators is represented by the development of the amount of employees (see Chart 1). From the chart it implies that SS and SU companies show a decreasing trend of employment while SD exhibits a total increase of 5 .35 %. Chart 1: Development of the amount of employees in particular mining companies (2008 – 2012) Source: [authors] The development of mining in particular mining companies is obvious from Chart 2. 14th SGEM GeoConference on Science and Technologies in Geology, Exploration and Mining Chart 2: Development of mining in particular mining companies (2008 – 2012) Source: [authors] The second monitored indicator is the one of labour productivity derived from added value (see Table 2) Table 2: Development of labour productivity derived from added value in particular mining companies in 2008 – 2012 [thousands of CZK/employee] Year 2008 2009 2010 2011 2012 CC 224.388 281.363 258.790 SD 1,241.747 1,299.474 1,063.221 1,239.776 1,154.539 SU 1,320.616 1,255.654 1,074.576 1,245.731 1,214.142 Source: [annual reports of companies + authors] Data for calculating the labour productivity derived from added value in CC group are not accessible in 2008 and 2009; for remaining years they are not complete. For this group, the indicator is thus not assessed. From Table 2 it implies that values of labour productivity derived from added value are (despite some small variances) identical in SD and SU. Values of the third indicator – i.e. ones of average salary in particular companies – are calculated in Table 3. The table is updated with values of indicator of average salary in CR within 2008 – 2012, including the development of salaries in the Czech national economy section “Mining and extracting”. Section Exploration and Mining Table 3: Development of the monthly average gross salary in the Czech Republic and selected branches in 2008 – 2012 [CZK/month/employee] Year 2008 2009 2010 2011 2012 CR 22,592 23,353 23,858 24,452 25,109 Industry 22,125 22,655 23,628 24,388 25,159 Mining 29,273 28,361 30,278 31,537 32,643 CC 18,699 23,447 21,566 SD 27,633 27,286 29,000 28,538 28,492 SU 41,278 44,353 44,690 44,691 45,170 Source: [annual reports of companies + CSO + authors] For calculating the indicator of average salary in the CC group, data in 2008 and 2009 are not available. From the table it implies that the average salary in the Czech national economy section “Mining and extracting” trace the nationwide one. This copying trend is also obvious in CC and SD companies. A very similar trend is detectable in SU as well; however, the average salary here is about 56 % higher than the one in SD. Herewith this salary is about 85 % higher than the average one within the whole Czech Republic. The development of average salary indicator has to be analyzed in the context of the index of unemployment rate within the whole Czech Republic and both the regions of Karlovy Vary and Ústí nad Labem (see Table 4). Tab. 4: Development of unemployment rate in CR and selected branch in 2008 – 2012 Region/year 2008 2009 2010 2011 2012 Employment – CR [thousands of people] 5,002.5 4,934.3 4,885.2 4,904.0 4,890.1 - from this mining and extracting [thousands of people] 55.6 52.2 47.9 46.5 43.3 General rate of unemloyment [%] 4.4 6.7 7.3 6.7 7.0 Employment – Karlovy Vary Region [thousands of people] 148.0 143.9 144.4 143.4 138.6 - from this mining and extracting [thousands of people] 4.8 5.1 4.7 5.6 4.5 General rate of unemloyment [%] 7.6 10.9 10.8 8.5 10.5 Employment – Ústí nad Labem Region [thousands of people] 372.0 365.7 361.9 366.6 354.1 - from this mining and extracting [thousands of people] 12.1 12.3 12.6 8.6 7.9 General rate of unemloyment [%] 7.9 10.1 11.2 9.8 10.8 Source:

Within m onitored years, the employment of people in the section “Mining and extracting” has decreased in the whole Czech Republic. In monitored areas of the regions of Karlovy Vary and Ústí nad Labem, there is a decrease of employment in the 14th SGEM GeoConference on Science and Technologies in Geology, Exploration and Mining field of mining and extracting too; however, it became obvious only at the end of the monitored period (if compared with the whole CR). This may be attributed to the economical crisis which affected most Czech companies in 2010. The general rate of unemployment within the whole Czech Republic in 2008 – increased almost 1.6 times. The general rate of unemployment in the regions of Karlovy Vary and Ústí nad Labem is still higher than within the whole Czech Republic. It may be supposed that this increase of unemployment (not only in mentioned regions but in the whole CR) is related to the minimum income growth. Nevertheless, the increase of unemployment may partly be related to new possibilities in the area of industrial automation and controlling devices as well as to investments within this branch. CONC LUSION On the basis of monitored values of analyzed labour productivity indicators it may be stated that all three indicators in both SD and CC companies show a similar trend, i.e. if personal expenses for an employee increase, indicators of labour productivity and labour productivity derived from added value have to increase as well. It is also possible to claim that significant developments and investments in the field of industrial automation and controlling devices affect the value of labour productivity indicators. Although the rate of employment within the “Mining and extracting” section was decreasing in the regions of Karlovy Vary and Ústí nad Labem, it is possible to state that these changes did not affect the unemployment rate in the course of monitored period. The paper was written in connection with the SGS SV 500 33 11 project. REF ERENCES

Ekologické centrum Most: Historie těžby hnědého uhlí na Mostecku – Počátky dolování hnědého uhlí. Cit. [2014 -04-16]. Dostupné na WWW: http://www.ecmost.cz/rekultivace.php page=uhli_pocatky.

SCHOLLEOVÁ, Hana. Ekonomické a finanční řízení pro neekonomy. 2. aktualiz. a rozš. vyd. Praha: Grada Publishign, 2012. 268 s. ISBN 978-247-4004-1.

Český statistický úřad: Průměrná mzda a evidenční počet zaměstnanců – Metodika. Cit. [2014-04 -10]. Do stupné na WWW: http://www.czso.cz/csu/redakce.nsf/i/pmz_m.

Český statistický úřad: Zaměstnanost a nezaměstnanost podle výsledků VŠPS - Metodika. Cit. [2014-04 -10]. Dostupné na WWW: http://www.czso.cz/csu/redakce.nsf/i/zam_vsps.

Pracovní trh a nezaměstnanost. Cit. [2014-04 -10]. Dostupné na WWW: www.vakobobri.cz/request.php 1279. Section Exploration and Mining

to these activities are dated back to medieval times – the first one, inscribed into the “Town book of Duchcov”, comes from 1403

. Coal mining represents the activity which is praised on one side since it brings employment (and thus money) to people in the region. This enables providing essentials of life and other needs. Mining also contributes to regional business activities and to the development of this region itself. Section Exploration and Mining By numerous organizations and various fellowships, however, brown coal mining is understood as the activity which negatively affects the landscape, air and environment. Nowadays, when longstanding discussions have been held on breaking limits of coal mining, lots of people (who work with regional mining companies) express their fears of their further destiny, their jobs, the ability to support families, the possibility to provide education for their children, etc. If mining limits are not broken and mining is finished within several years, consequences may affect not only particular families but the life in this region as well. Provided mining is finished, salaries are going to decrease together with the spending power of inhabitants. Business activities in the region would reflect it immediately. From these considerations it implies that unemployment in this region may increase – finished mining may thus have a very negative effect on the Czech state budget. The authors have set three goals: The first one is analyzing the development of particular indicators of labour productivity within selected Czech coal mining companies (2008 – 2012). These particular corporations are: Severočeské doly, a.s., Sokolovská uhelná Group, legal assignee a.s. and Czech Coal Group, a.s. In the context of labour productivity development, the development of average salary must be taken into consideration – i.e. whether these trends are consistent. This development is presented in connection with the development of average salary within the branch of “Mining and extracting” and in the Czech Republic as whole. The third and last goal of this paper is analyzing the development of unemployment/employment in the Czech region where brown coal is mined. THE ORETICALLY DEFINED FUNDAMENTAL CONCEPTS In the practical part of this contribution, values of three labour productivity indicators are defined on the general level. The first and essential one is the labour productivity, expressed as the ratio of production volume to the number of employees (the average registered number of employees), i.e.:  oyee tons/emplof thousandsemployees ofnumber materials) (worked volumeproduction typroductivilabour (1) The indicator of labour productivity derived from added value indicates the added value (expressed in money) which devolves upon one employee:  eeCZK/employ of thousandsemployees ofnumber value addedvalue added from derived typroductivilabour (2) The value of calculated indicator should be compared with the value of average income per one employee. The average income is calculated according to the formula:  eeCZK/employ of thousandsemployees ofnumber expenses personalemployeeper income average  (3) However, an adequate regulation is necessary in order to prevent a situation when some company does not operate because nobody wants to work there

. It should be valid 14th SGEM GeoConference on Science and Technologies in Geology, Exploration and Mining that if personal employment expenses grow, the indicator of labour productivity (as well as the indicator of labour productivity derived from added value) has to grow too. The average salary in the Czech Republic is – according to the Czech statistical office – calculated as the ratio of salaries without other personal expenses which devolves upon one registered employee per month. Compensations include basic wages and salaries, bonuses and supplementaries, various types of rewards and refunds which are accounted to employees within a certain period. No refunds of wages (salaries) are included in the case of temporary incapacity for work or a quarantine paid by the employer. In this case, the gross salary is referred, i.e. before the health insurance and social welfare expenses are taken off, as well as the income tax of physical persons and other due or agreed with the employer deductions

. The general rate of unemployment expresses the ratio of unemployed persons number to total workforce where both the numerator and denominator represent indicators developed according to international definitions and recommendations applied in the “Selective investigation of labor force”. The indicator is constructed according to the Eurostat methodology, developed under the recommendation of International Labour Organization. The total manpower means a number of employed people and those unemployed who actively look for a job – i.e. the economically active population

.  %nt unemployme of rate general manpower total unemployed ofnumber  (4) The rate of registered unemployment indicator (according to the Czech Ministry of Labour and Social Affairs) is expressed as the ratio of job applicants number (registered at the Labour Office of the Czech Republic) to manpower

.  %nt unemployme registered of rate manpower applicants job registered ofnumber  (5 ) The rate of employment (according to the Czech Statistical Office) is defined as the ratio of employed people to all individuals 15 years old and older

. DEVEL OPMENT OF LABOUR PRODUCTIVITY INDICATORS In order to assess developments of above mentioned selected indicators, data from annual reports of three coal mining corporations were utilized. Companies operate in the western part of the Czech Republic – i.e. in Ústí nad Labem and Karlovy Vary regions. These companies are called Czech Coal Group, a.s. (hereinafter CC), Severočeské doly, a.s. (hereinafter SD) and Sokolovská uhelná Group, legal assignee a.s. (hereinafter SU). In 2013, the Czech Coal Group a.s. was divided into separate mining companies of Vršanská uhelná a.s. and Severní energetická a.s. The development of basic indicator of labour productivity is presented in Table 1. From data it implies that both the Czech Coal and Sokolovská uhelná Group, legal assignee a.s., succeed very similar values; SD proves values of productivity 2 – 2.5 times higher than other two groups. The SU group has the least average values of labour productivity (1.87 x 10 3 tons /employee). The CC group exhibits the average labour productivity of Section Exploration and Mining 2.63 x 103 tons /employee. Maximum values of average productivity are attained by SD (4.55 x 103 tons /employee). Table 1: Development of labour productivity within particular mining companies in 2008 – 2012 [thousands of tons/employee] Year 2008 2009 2010 2011 2012 CC 2.43 2.41 2.53 2.80 3.10 SD 4.56 4.39 4.35 4.98 4.43 SU 2.08 1.87 1.89 1.77 1.67 Source: [annual reports of companies + authors] The fundamental effect on the basic indicator of labour productivity and other productivity indicators is represented by the development of the amount of employees (see Chart 1). From the chart it implies that SS and SU companies show a decreasing trend of employment while SD exhibits a total increase of 5 .35 %. Chart 1: Development of the amount of employees in particular mining companies (2008 – 2012) Source: [authors] The development of mining in particular mining companies is obvious from Chart 2. 14th SGEM GeoConference on Science and Technologies in Geology, Exploration and Mining Chart 2: Development of mining in particular mining companies (2008 – 2012) Source: [authors] The second monitored indicator is the one of labour productivity derived from added value (see Table 2) Table 2: Development of labour productivity derived from added value in particular mining companies in 2008 – 2012 [thousands of CZK/employee] Year 2008 2009 2010 2011 2012 CC 224.388 281.363 258.790 SD 1,241.747 1,299.474 1,063.221 1,239.776 1,154.539 SU 1,320.616 1,255.654 1,074.576 1,245.731 1,214.142 Source: [annual reports of companies + authors] Data for calculating the labour productivity derived from added value in CC group are not accessible in 2008 and 2009; for remaining years they are not complete. For this group, the indicator is thus not assessed. From Table 2 it implies that values of labour productivity derived from added value are (despite some small variances) identical in SD and SU. Values of the third indicator – i.e. ones of average salary in particular companies – are calculated in Table 3. The table is updated with values of indicator of average salary in CR within 2008 – 2012, including the development of salaries in the Czech national economy section “Mining and extracting”. Section Exploration and Mining Table 3: Development of the monthly average gross salary in the Czech Republic and selected branches in 2008 – 2012 [CZK/month/employee] Year 2008 2009 2010 2011 2012 CR 22,592 23,353 23,858 24,452 25,109 Industry 22,125 22,655 23,628 24,388 25,159 Mining 29,273 28,361 30,278 31,537 32,643 CC 18,699 23,447 21,566 SD 27,633 27,286 29,000 28,538 28,492 SU 41,278 44,353 44,690 44,691 45,170 Source: [annual reports of companies + CSO + authors] For calculating the indicator of average salary in the CC group, data in 2008 and 2009 are not available. From the table it implies that the average salary in the Czech national economy section “Mining and extracting” trace the nationwide one. This copying trend is also obvious in CC and SD companies. A very similar trend is detectable in SU as well; however, the average salary here is about 56 % higher than the one in SD. Herewith this salary is about 85 % higher than the average one within the whole Czech Republic. The development of average salary indicator has to be analyzed in the context of the index of unemployment rate within the whole Czech Republic and both the regions of Karlovy Vary and Ústí nad Labem (see Table 4). Tab. 4: Development of unemployment rate in CR and selected branch in 2008 – 2012 Region/year 2008 2009 2010 2011 2012 Employment – CR [thousands of people] 5,002.5 4,934.3 4,885.2 4,904.0 4,890.1 - from this mining and extracting [thousands of people] 55.6 52.2 47.9 46.5 43.3 General rate of unemloyment [%] 4.4 6.7 7.3 6.7 7.0 Employment – Karlovy Vary Region [thousands of people] 148.0 143.9 144.4 143.4 138.6 - from this mining and extracting [thousands of people] 4.8 5.1 4.7 5.6 4.5 General rate of unemloyment [%] 7.6 10.9 10.8 8.5 10.5 Employment – Ústí nad Labem Region [thousands of people] 372.0 365.7 361.9 366.6 354.1 - from this mining and extracting [thousands of people] 12.1 12.3 12.6 8.6 7.9 General rate of unemloyment [%] 7.9 10.1 11.2 9.8 10.8 Source:

Within m onitored years, the employment of people in the section “Mining and extracting” has decreased in the whole Czech Republic. In monitored areas of the regions of Karlovy Vary and Ústí nad Labem, there is a decrease of employment in the 14th SGEM GeoConference on Science and Technologies in Geology, Exploration and Mining field of mining and extracting too; however, it became obvious only at the end of the monitored period (if compared with the whole CR). This may be attributed to the economical crisis which affected most Czech companies in 2010. The general rate of unemployment within the whole Czech Republic in 2008 – increased almost 1.6 times. The general rate of unemployment in the regions of Karlovy Vary and Ústí nad Labem is still higher than within the whole Czech Republic. It may be supposed that this increase of unemployment (not only in mentioned regions but in the whole CR) is related to the minimum income growth. Nevertheless, the increase of unemployment may partly be related to new possibilities in the area of industrial automation and controlling devices as well as to investments within this branch. CONC LUSION On the basis of monitored values of analyzed labour productivity indicators it may be stated that all three indicators in both SD and CC companies show a similar trend, i.e. if personal expenses for an employee increase, indicators of labour productivity and labour productivity derived from added value have to increase as well. It is also possible to claim that significant developments and investments in the field of industrial automation and controlling devices affect the value of labour productivity indicators. Although the rate of employment within the “Mining and extracting” section was decreasing in the regions of Karlovy Vary and Ústí nad Labem, it is possible to state that these changes did not affect the unemployment rate in the course of monitored period. The paper was written in connection with the SGS SV 500 33 11 project. REF ERENCES

Ekologické centrum Most: Historie těžby hnědého uhlí na Mostecku – Počátky dolování hnědého uhlí. Cit. [2014 -04-16]. Dostupné na WWW: http://www.ecmost.cz/rekultivace.php page=uhli_pocatky.

SCHOLLEOVÁ, Hana. Ekonomické a finanční řízení pro neekonomy. 2. aktualiz. a rozš. vyd. Praha: Grada Publishign, 2012. 268 s. ISBN 978-247-4004-1.

Český statistický úřad: Průměrná mzda a evidenční počet zaměstnanců – Metodika. Cit. [2014-04 -10]. Do stupné na WWW: http://www.czso.cz/csu/redakce.nsf/i/pmz_m.

Český statistický úřad: Zaměstnanost a nezaměstnanost podle výsledků VŠPS - Metodika. Cit. [2014-04 -10]. Dostupné na WWW: http://www.czso.cz/csu/redakce.nsf/i/zam_vsps.

Pracovní trh a nezaměstnanost. Cit. [2014-04 -10]. Dostupné na WWW: www.vakobobri.cz/request.php 1279. Section Exploration and Mining