Minimum wage of 780 euros mulled
Amid soaring inflation, gov’t planning to decide on generous increase in first fortnight of March
The government is examining the prospect of raising the minimum monthly wage to 780 euros from the current €713 level to offset rising inflation. The decision is expected to be made within the first fortnight of March, at the height of the pre-election period.
It is already taken for granted that there will be a restoration of the minimum wage to pre-memorandum levels, namely €751. However, the government’s economic staff are now discussing the strong possibility of increasing the minimum wage even by 9-9.5%, in order to cover the loss of income of about 650,000 private sector wage earners, from the increase in the Consumer Price Index.
At the moment, and given that the government is touting “the needs of both society and business,” the current scenario is that the minimum wage will increase by at least 7.75-8%, the same as the increase in pensions. This leads to a new minimum wage close to between €768 and €770 euros (an increase of €55-57).
However, given recent talk by government officials about “surprises” regarding the amount of the new minimum wage, experts forecast an increase close to the level of inflation, up to 9.5%. This means that the new minimum wage will increase by €67 to €780 per month. This would also cancel out a powerful electoral weapon wielded by main opposition SYRIZA, which has committed to raising the minimum wage to €800 if it is elected to government.
At the same time, the Labor Ministry acknowledges that strong inflationary pressures and exorbitant energy costs are not only exhausting the resilience of households but also of businesses.
For this reason, it has not been ruled out that any decisions will be combined, as requested by the representatives of employers’ organizations, with incentives to further reduce taxation and energy costs.
The new timetable to expedite the procedures so that this year’s increase can be implemented from April 1, is expected to be included in an amendment to be tabled in Parliament, probably on Friday, or next Monday at the latest.
It will pencil in February 28 as a deadline for the submission of the final proposal of the Center for Planning and Economic Studies and the committee of experts to the Labor Ministry.
The final decision will be taken by Labor Minister Kostis Hatzidakis within the first 10 days of March, after approval by Cabinet.
