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.