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Shocking data: 127K Greek Workers are paid wages of up €100 per month

The dramatic shrinkage of the earning due to recession, explosion of unemployment and dominance of flexible forms of employment is being reflected in a document submitted by an experts’ committee to Greek Labor Ministry.

The document featured detailed data on wages inequality during the period 2010-2015 and exposes a new social class of workers: the Neo-Poor Greeks earning wages much lower than the unemployment allowance of 360 euro.

According to data of the Ministry:

126,956 employees are paid a gross monthly salary of 100 euros.

343,760 employees are paid monthly salaries between 100 and 400 euros gross.

Basically it is workers with part-time or job rotations of two or three days a week or even of a few hours a week.

It is worth noting that, according to data from Greece’s biggest Social Security Fund for Employees (IKA),  the average wage for part time ranges from €400 to €420 gross per month.

These figures show that the number of the new-poor workers paid monthly wages up to €510 gross totals 432,033 people.

Data: monthly gross salary for private sector workers for 2015

Left column: wages in euro Right column total number of workers

Note: Full Time Minimum monthly wage for those below 25 years old is €510.94 gross. Minimum wage for those above 25 is €586* gross. (source: Naftemporiki)

Further data from the Labor Ministry show the increase of part-time contracts/flexible work contracts.

For example: in the time period July 2013 – July 2016:

152,636 full time contracts were changed into part-time or rotating job contracts.

The paper points out that the Greek economy is facing a serious problem due to its low competitiveness.

However, contrary to the International Monetary Fund that connects ‘competitiveness’ with ‘labor cost’ the paper stresses that:

The lack of competitiveness is characterized as a “structural problem” which is mainly related to the specialization of the global division of labor in conjunction with the methods of organization and administration of the Greek economy rather than to the labor cost.

The data suggest that the economic downturn has acted as an accelerator of the expansion of part-time forms, resulting especially after 2012 to have a dramatic increase in the number of part-time workers, but also an increase in converting  full-time contracts to part-time or job rotation.”

“Labor Reforms” is the next hot potato between the Greek government and the lenders and ‘negotiations’ are expected to open officially in September. Among others, lenders want lowering the minimum wage, scrapping the 13th & 14th salary (Christmas and vacation bonus), scrapping wage raises every 3rd year.

Labor Reforms are a precondition for the second Review of the Greek Program.

* the cost for employer is additional €78 per month employers’ share for social security (13.33%) – The wage per hour has dropped down to €3.

Even if the above date show the grim reality of workers’ lives, the only good thing out of it is that they refer to “registered work” with social security. That means, that workers have at least some form of health care. On the other hand, these ‘flexible’ and low paid jobs do not add exactly to fill social security funds with much needed euro. Furthermore, those working at these ridiculous wages, they will suffer a very bitter shock, once they will have to go to retirement.

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9 comments

  1. Basically, they need to stop undeclared labor completely, but for that to happpen they need to lower IKA from 43% to 20% at most, and make it 0% until 500 euros a month, similar to what the UK does. Of course, for that to happen, the govt needs to deal with the current pensions!

  2. The IKA scheme is a direct copy of the German system. If the rate is cut from 43% then there will be even less money to pay pensions than there is now. All of this is a direct consequence of the lunatic ideas of Schaeuble and others — austerity economics and depression. When economies are collapsing, they cannot pay their pension and other state commitments: this is standard economic knowledge. Apparently, the IMF and the Germans are unfamiliar with economics. Or pretend to be so…

  3. People are just not paying IKA because the rate is so heavy. A friend of mine works full time but the boss will only pay 50+ days so my friend get the benefits. The staff at the IKA office knows this full well but never do anything about it. Where I come from what the boss is doing is fraud.

  4. Use the USA system of just paying proportional IKA based on income earned…best system yet…

  5. Maygbe, but all of Europe (apart from the UK) is historically based on the German system – -which is a proportion of income earned but very high at 43% or so. It is even worse for the self-employed, because they have to pay social insurance even when they have no income.

    But this high rate is why German pensions are so high and US pensions are shit. The US and UK are very dependent on private pension schemes and occupational pension schemes — and to be honest, in the end they probably all work out to be similar rates of over 40% of your income. If you don’t invest that much (as I have not done, with irregular and lowish income) then you will end up with no pension or a pension that cannot sustain you.

  6. yes but at this rate greek wages will fall even further as shown by this article, or continue hiring people black. Most of the new Greek businesses these days seem to be bakeries and souflaki shops, who pretty much all hire part time staff for peanuts, assuming they are on the books.

    The rest of the business owners are self employed small shops, who usually declare just one family member on the books for social insurance, while the rest ‘help out’.

    This will simply get worse over time.
    Think about this, the average salary these days is lower than the average pension! IMAGINE.

    80% of Greek govt spending is on govt salaries and pensions. It’s all over, there is no hope except to make massive cuts in govt salaries and general pensions, or go to Drachma and print money.

  7. In my opinion, public salaries need to match private ones, as in go down to 700 EUR a month.

  8. Greek wages are falling because the Greek economy is in a 5-year depression created by the eurogroup. The gap between pension contributions and pension payments can only increase — even after pensions have been massively cut. And if anyone wants to complain about anything, try complaining about the Greek judges of the Council of State who have declared their and military pensions to be “protected by the Constitution” — which is a blatant lie, of course. So now all the backpensions for judges and military have to be paid from the current budget. The judges’s pensions on the Council of State are 5,000 euros a month — and obviously you could not expect them live on a mere 3,200 a month (which is what they had been cut down to).
    ~
    You see, the problem is with the corrupt powers that are being supported by the Germans and others. It has always been been the same, including the private sector corruption such as Siemens. Europe is a continent of largescale corruption, with Germany at the heart of it. Greece is a small player.

  9. Giaourti Giaourtaki

    I guess you are entering hundreds of souvlakia bakeries each day to tell these victims of the capitalist bastards and austerity-mass-murdererers your truth and that they’d better work in your business for 50 cents a day or so, or even better for some old drachmas which they can use in the future but may be you drive’em just into even more despair and suicides.