From 2028 onwards, the increase in the minimum wage will be automatic and will result from a mathematical formula based on inflation and productivity.
What is provided?
The bill for the new system of determining the minimum wage was given to a public consultation yesterday, and in paragraph 2 of article 15 with the changes that will apply for the years 2025, 2026 and 2027 it is stated that “the amount of the statutory minimum wage and the statutory minimum daily wage is determined taking into account the state of the Greek economy and its prospects for growth from its point of view productivity and competitiveness, prices, incomes and wages, employment and the unemployment rate, as well as the purchasing power of the statutory minimum wage and the statutory minimum daily wage and their adequacy, taking into account the cost of living, the general level of wages, their distribution and rate of increase’.
The criterion of purchasing power is established for the first time in the increase of the minimum wage and comes from the Community directive on adequate wages, which the Ministry of Labor integrates with the bill for the new minimum wage formation mechanism.
Social partners
Changes are also coming to the consultation, as the role of the social partners is strengthened through the participation of ADEDY in the consultation committee as from 2025 the basic salaries of civil servants will follow the increase of the minimum wage, so that they are at the same level.
Until 2027 the minimum wage will be determined by the government based on the outcome of the consultation. The Prime Minister’s commitment is that the minimum wage will be 950 euros by 2027 from 830 euros today. After 2027, the new mechanism of automatic increases will be implemented, resulting from a mathematical formula that no government can interfere with.
Calculation
Under the bill, the annual rate of increase in the minimum wage from 2028 onwards would be the sum of the annual rate of change in inflation, for the poorest 20% of households, and half of the change in the purchasing power of the general wage index.
Accuracy will be factored into the minimum wage increase both in the proposal and finding process that will run from 2025 to 2027, and in the math formula that will automatically generate increases from 2028 onwards.
The “low-wage basket” is the key to the increases as the rise in prices will mean a corresponding rise in wages. According to the ELSTAT cost of living indicators. 55% of the earnings of low earners is spent on food, housing and energy, compared to 20%-30% spent on the same goods and services by the highest earners.
With the new mechanism, it is expressly provided that the minimum wage cannot be reduced. In cases of extraordinary circumstances and serious financial problems, the mechanism may deviate from the automatic mathematical formula and the salary will neither increase nor decrease but will remain frozen.
The ministry says that with the proposed system, minimum wage earners keep their purchasing power intact and increase it as inflation and the productivity of the economy increase.
Aid to the State as well
The new mechanism for the minimum wage will also be applied in the Public sector as from 2025, there will be a single basic salary in the Public and private sectors. Today the starting salary in the public sector is 850 euros and in the private sector 830 euros. With the increase of 2025, which is estimated between 40 and 50 euros per month, the minimum wage will be 870-880 euros and correspondingly the introductory salary (for the HR category) in the State will rise to the same amount.
The increase that will be given to the entry level of the State, will be applied horizontally to all employees’ salaries. For example, if the minimum wage increases by 50 euros in 2025, and becomes 880 euros, the introductory salary in the State will increase by 30 euros to reach 880 euros. The increase of 30 euros will be automatically passed on to all salaries of civil servants of all levels.
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#Minimum #wage #Increases #accuracy #clause
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