The salary raise challenge

Setting the minimum salary at 950 euros per month, from €780 today, and the average at €1,500 from €1,176.5 in end-2022 and €1,184 in end-May, is one of the key objectives of New Democracy, which is widely expected to win another four-year term in the elections this Sunday.

The new leadership at the Labor Ministry, to be chosen after the June 25 elections, will face several challenges, with wages and labor relations being the most prominent.

The field of salaries is estimated to be the most important, as well as the one with the greatest impact, as it concerns approximately 2 million private sector employees.

Lawyer Giannis Karouzos, a labor expert, explains to Kathimerini that if one follows the ND pledges about a minimum salary of €950 at the end of the new four-year period, this leads to an increase of €170 cumulatively by 2027, i.e. 21.8%. Assuming that this increase will be more or less equally divided into four annual raises in the period from 2024 to 2027, this equation shows a weighted average increase of €42.5 per year, or 5.44%, to bring the minimum wage to €822 in 2024, to €865 in 2025, to €907 in 2026 and to €950 in 2027.

“The course of inflation and growth as well as any other developments in the Greek economy will essentially determine the fate of the minimum salary,” barring of course any unexpected development, notes the expert.

Of course, the goal does not only concern the minimum but also the average salary, which according to the most recent data of the ministry’s “Ergani” system, was €1,184 on May 31. To reach €1,500, as ND has vowed, a cumulative increase of €316 is required over a four-year period, i.e. 26.6%. This means – provided that the increase will be divided across the four-year period – a positive adjustment of €79 per year, or 6.6%.

Part of the adjustment of the average salary, as analyzed by Karouzos, will come from the increase of the minimum salary – which will affect the rest of the salaries and another part of economic growth.