The Prime Minister of Croatia, Mr Andrej Plenković, who was a member of the European Parliament, proudly states that Croatia and its citizens are progressing and that the situation in the country is not as bleak as it seems. His claim turns out to be mostly false.
Croatia has assumed presidency of the Council of the European Union on 1st January 2020. The government has presented this to Croatians as a great honor rather than a well-established obligational six-month rotation presidency. While the traffic in the capital city of Zagreb is in shambles over the many delegation groups coming to Croatia, Croatians are constantly searching for a better life.
Unfortunately, Croatia has become well known for losing a lot of its young adult population. Since 2013 young adults see a better future outside of Croatia, they gravitate to other EU countries. This fact is hardly surprising if we take into consideration that Croatia’s corruption index is alarmingly high compared to the other European Union countries. This causes mistrust in governance, and holds back growth.
In a statement for the media Andrej Plenković says that whilst he came into office in the year 2016 the average pay in Croatia has increased with 800 kunas (around 107 euros), and that the average pay in Zagreb (Croatia’s capital) is around 1000 euros. Plenković also states that through indexation the pensions in Croatia have increased more than 12 percent.
We checked the data, and indeed the average pay in Croatia did increase with 109 euros for the period from October 2016 up until June 2019. The pensions have also increased, though our numbers do not match the prime minister’s. But the main problem is that these numbers were taken out of context, and when compared to other important data they do not paint such a pretty picture of the prime minister’s government.
The average pay in Croatia
The Croatian Bureau of Statistics says that the average net pay in October 2016 was 745 euros. From the same source the average net pay for June 2019 was 854 euros. Applying a simple calculation we can see that the average pay did indeed increase for 109 euros.
The average gross pay for the same period increased from 1014 euros to 1161 euros – that’s 147 euros.
The average net and gross salaries are not as reliable as the median salary, because the median salary is not effected by extremes. The median salary for October 2016 was 628 euros and for June 2019 it was 738 euros. We can acknowledge an increase of 110 euros, but this is a smaller increase than the increase of the gross pay for those periods in Croatia. Nevertheless, they are still in accordance with the prime minister’s statement.
In June 2019 there were over one million employees in Croatia, the median pay tells us that over 600 000 employees received a maximum pay of 738 euros per month for their living expenses. This presents a more honest picture than simply stating there was a 109 euros pay increase.
We conclude that the data regarding the increase in pay is correct. Nevertheless, the prime minister did not mention the equal importance of continuous growth of living expenses. The Croatian Bureau of Statistics states that the prices of goods and services for individual consumption (measured by the consumer price index) are growing since 2016, so this has a great impact on Croatian households.
Professor Vladimir Arčabić, who teaches classes such as Macroeconomics and Economic development at the Faculty of Economics and Business, University of Zagreb, explains: “The Croatian Bureau of statistics provides a price analysis of exact products in shops throughout Croatia. The prices are represented by an index and if there is a change in the index it’s regarded as an increase of general prices.”
The data states prices have changed a lot for the time period from 2016 to 2019. General prices in stores have grown substantially. For one shopping basket in September 2019 a Croatian would on average pay 3.6 percent more than he or she would have in September 2016. For the period from 2016 to the end of 2018 the average price for products has increased by 2.6 percent.
Even though the average paycheck did increase, the impact isn’t that impressive since living expenses in Croatia continue to grow as well. Croatians are mostly unsatisfied with their financial situation. Eurostat states that on a scale from 0 to 10 Croatia measures a 4.6 with their satisfaction with finances. For example in Slovenia, Croatia’s neighboring country it comes to a 5.6 out of 10. And in Romania that constitutes one the Presidency Trio of the Council of the European Union with Croatia, overall financial satisfaction is even higher and comes to a 6.2 out of 10.
A 1000 euros pay within context
Regarding the average pay in Zagreb, the City Office for Strategic Planning and Development states that for July 2019 the average net pay was 984 euros. The gross pay for the same period was 1386 euros. The average paycheck in Zagreb has been steadily growing since 2016 when the average net pay was 868 euros. Throughout 2017 and 2018 the average net pay was 935 euros and 956 euros, the biggest increase was from 2016 to 2017.
The net pay in Zagreb is indeed around 1000 euros, but we must mention the growing living expenses in Zagreb. The statistical yearbook of the city of Zagreb for 2019 states that the prices for individual expenses in 2018 were 3, 4 % higher than in 2016. The living expenses have also grown for 3, 8 % since 2016 when prime minister Plenković was sworn into office. Again we have the correct numbers but they are taken out of context.
The rise in pensions
Prime minister Andrej Plenković states that through indexation the pensions in Croatia increased more than 12 percent. Indexation, as Prof. Arčabić says, is a process in which by law regulations the pensions are increased or decreased in accordance with prices and paychecks.
From the statistical data we calculated an increase in the pensions of 8, 4 percent in July 2019 since September 2016.
Professor Arčabić observed the total pensions which included the old age pension, disability and family pensions. In September 2019 the pensions for July were 321 euros and in September 2016 it was 297 euros. This comes to a difference of 8.22 percent. He says that the results differ and depend on the data that is used.
Context beats ‘facts’
To conclude, the pensions in the prime ministers mandate did not increase for more than 12 percent, the total pension growth for the mentioned period comes down to 8,4 percent.
Except for the pensions, the numbers the prime minister states are mostly correct. What is missing in the statement is the context, particularly the growth in living expenses. This would undermine the positive light in which the prime minister has presented his mandate and government. We contacted Professor Marijana Grbeša- Zenzerović, who teaches classes such as Media and the Public and Political Marketing at the Faculty of Political Science, University of Zagreb. We asked why and in which way do politicians handle information and why is information usually presented out of context. She says this is called framing. “It’s a technique in which one controls information by highlighting certain information, and disregarding the rest. This is done to create a reality, or to present one’s picture of reality”, adding that framing is used both by media and politicians.
Taking all of the information stated in this text, we would evaluate the prime minister’s statement as mostly false. Even though two out of three figures used in the claim are on their own correct, when they are presented within context they tell us a different, more accurate story about Croatia’s economy.
RESEARCH | ARTICLE © Tonka Vuković and Tin Žigić