Greece has recorded a dramatic increase of people living on a salary below the poverty line: one in eight workers earns 200 euros per month, the annual report of the Labor Institute of private sector union umbrella GSEE has found.
“A huge part of the Greek population is at risk of permanent impoverishment,” the researchers of the Annual Report on the Greek Economy and Employment warn.
The Institute sees a reduction in wages, a deterioration in the living standards of workers, the de facto abolition of the 8-hour working hours and the risk of impoverishment for a huge part of the Greek population.
The report records the situation in the labor market amid the coronavirus pandemic and speaks of wage cuts, deteriorating living standards, de facto abolition of the 8-hour work and a dramatic increase in those living below the poverty line.
Analyzing the data, researchers point out that immediate measures must be taken to improve the living standards of households, otherwise the impoverishment of a huge part of the population will be permanent and social cohesion will be disrupted.
Researchers point out, that “a very large part of the workforce is either out of the labor market (suspended work contracts for more than 3 months due to the pandemic), or registered as unemployed or they work for wages that are below or even more below the poverty line.”
More than 100,000 employees have “exited” the workforce and live on €534 per month state aid for more than 3 months.
The average monthly wage decreased by 10% in the second quarter of 2020 compared to the same quarter of 2019.
3 in 10 workers receive a salary lower than the minimum wage, the amount of which – despite the increase in 2019 – is below the poverty line.
7 in 10 have salaries below 1,000 euros.
According to the Annual Report data, in the second quarter of 2020 the average monthly salary decreased from 885 euros in the second quarter of 2019 to 802 euros in the second quarter of 2020, that is, it decreased by around 10%.
During the same period, the percentage of employees receiving from 0 to 200 euros increased 12 times, as it increased from 1% to about 12%.
Workers receiving salaries between €200 and €1,200 decreased by 11.3 percentage points.
The largest decrease was recorded in people who had a net salary between €400 and €600 because this category from 16.3% the second quarter of 2019 decreased to 12.3% in the same quarter of 2020.
The percentage of people who received from 601-800 euros decreased from 24.8% to 23.5%, while those who received from 801-1,000 euros decreased from 21.8% to 18.3% respectively.
It is noteworthy that in the second quarter of 2020, 72.9% of employees had a net salary of less than 1,000 euros.
Almost all pay scales may have been negatively affected, but the main burden of wage compression affected the low wages.
The Labor Institute of the GSEE estimates that unemployment will be around 21.2% by the end of 2020.
“Assuming that the depth of the recession will not exceed 9%, the Institute estimates that the official unemployment rate will rise to 21.2%,” the researchers said in their report.
Particularly important for how the labor market will be shaped in the near future is the expansion of the economically inactive population.
In 2019 there was a steady decrease in the number of unemployed and a parallel decrease in economically inactive people, but to a lesser extent.
The official unemployment rate fell by 2 percentage points on the average.
However, from December 2019 the number of economically inactive began to increase gradually, with the result that by February 2020 about 79,000 people have left the workforce.
At the same time, the cost of losing a job is particularly high in Greece, since after two years of unemployment the unemployed have lost 47% of their income. This result ranks Greece in the third worst position in the Eurozone.
“The high risk of long-term unemployment combined with the ineffective social safety net leads to the conclusion that, unless immediate measures are taken to improve the living standards of households, the impoverishment of a large part of the population will be permanent, social cohesion. It will burst, while the impact of the pandemic crisis on the economy will have a longer duration and more adverse consequences”, the researchers conclude.
More Report data here in Greek.
PS translating and writing down this report reminded me of the dramatic income and labor conditions reports during the Greek economic crisis. 200 euros per month? Christine Lagarde as IMF chief could not think of it even in her wildest competitiveness dreams…