Greece: Lower wages throughout labour market

In both individual and collectively agreed employment relations, wage levels in Greece have declined significantly, especially amongst young people. State cuts have led to a reduction in the real minimum wage as well as a sizable reduction in the levels of public sector wages.

Recent studies in Greece have found that wage levels are significantly down across sectors, and especially low in the public sector. In addition to depressed wages, significant inequalities persist with regard to gender (the average monthly salary of a woman corresponded to 74.67% of a man's) and age. With that said, young people did make up some ground in terms of pay: Judgement no. 34/2015 of the Civil Court of Thessaloniki has found the Cabinet’s Act no. 6 of 2012 unconstitutional and illegal as regards the automatically higher wage cut of 32% among employees under 25 years of age and the imposition on them of the minimum wage, irrespective of whether they were covered by a more specific (sectoral) collective employment agreement (GSEE 6/4/2014).

Since 2009, the average annual earnings of public sectors worker have declined by between 25% and 38%. Furthermore, the number of workers employed in the public sector has been cut by over 350,000. This has led to an overall reduction in total wages paid to the public sector of over €8 billion.

A study published in 2014 by INE GSEE, looking at developments in collective bargaining and wages (1.78 MB PDF) examines the number and content of the collective agreements during the period 29 November 2012 until 31 December 2013. The vast majority of such agreements were signed at a company level; of the 544 company-based agreements, 40.8% were signed by an official company trade union, while the rest (59.2%) were signed by quasi-unions in organisations called 'Association of persons'. According to the findings of the same study, during 2012 and 2013 there was a significant reduction in collectively agreed wages in such large sectors as hotels (-15%), commerce (-6.3%), banking (-6%) and construction (-18%). Since the reduction in collectively agreed wages, unions have shifted focus away from wages and towards maintaining non-wage working conditions – including job retention, hours, severance pay.

With regard to the evolution of the minimum wage, Cabinet Act no 6 of 14/2/2012 (Memorandum 2) led to a reduction of real minimum wages by 19.8% in 2012 and 2.7% in 2013 for employees over 25 years of  age (and 28.5% and 4.9% respectively for employees under 25 years). During the four-year period 2010-2013, the real minimum wage cumulatively decreased by 26% (by 35.4% for workers under 25 years). Though minimum wages defined by sectoral agreements have been hit less hard than the economy as a whole, minimum wages still fell by between 4.5% and 18.8% in new agreements. Moreover, across the EU, real average earnings showed the largest decrease in Greece (-21.9%), the average fall in the EU27 being -0.6%. By contrast, in the euro zone there was a slight increase of 0.1%.

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