The wage increases will not come by order of the state, but strictly at the demand of the market itself and the conditions created by the so-called “tightness of the labor market” by the Bank of Greece, i.e. the lack of workers not only for the positions of high specialization, but also for those of medium and even low specialization.
Forecast
As characteristically stated in the report of the Bank of Greece in the chapter with the forecasts for the Greek economy (pp. 90-91), “nominal wages per employee will increase at rates of around 5% per year, mainly as result of the intensifying tightness in the labor market, but also based on the recent collective labor agreements in various branches of the private sector”. Already in the first quarter of 2024, 87 new operational collective agreements were signed, of which 31 provide for wage increases.
The prediction of the Ministry of Finance leads with mathematical precision the average salary perhaps even above the levels of 1,500 euros which is the government’s goal for 2027, while it is certain that the minimum wage will also be formed above 950 euros, around 960 with 970 euros in the spring of 2027.
Upwards
For this year, it is forecast that average earnings will increase slightly more than in 2023. In particular, wage increases per employee are expected to increase in 2024 by 5.7% once morest an average increase of 5.5% in 2023, while total wages for Dependent work, i.e. for all employees, is estimated by the Bank of Greece to increase in nominal terms by 7.6% in 2024 from 6% that increased in 2023.
The rise in salaries in 2024 is affected both by the increase in the salaries of civil servants and by the end of the suspension of seniority allowances (three years) of private sector employees. Already in the State, the costs for employee fees increased at an average annual rate of 6.2% in the four months of January-April 2024, while extra increases due to the restoration of seniority benefits that had been frozen following 2012 are estimated to have this year around 100,000 employees and by 2027 they will reach 500,000.
Salaries “key” to repatriation of young people
Analysis of data from the Ergani system shows that between 2016 and 2023 there were increases in low-paid jobs, while there were decreases in higher-paid jobs. Indicatively, in small businesses (with up to 10 employees) real wages for highly paid workers had a real decrease of around 10%, when wages of €750 recorded a real increase of 9.2% to €819.
The Bank of Greece reports that this contradiction makes it difficult for young people who left abroad to return, with 25% of them considering better wages as the main reason for leaving. The CoE criticizes the government, saying that it does not appear that the appropriate wage conditions have been established to attract them back to Greece, stressing that attracting more qualified personnel is more difficult, since the wages for the corresponding jobs have finally decreased significantly in real terms because of inflation!
The answer to the repatriation of young people who left for better wages abroad can therefore only be the biggest increases starting at 5% that the Bank of Greece’s report predicts for the coming years.
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