Wage hike eases inflation impact

The average monthly earnings of private sector employees improved in 2023, largely thanks to the increase in the minimum wage, which pushed up all pay brackets.

A key factor was staff shortages faced by many companies in almost all sectors, which led many employers to move to more attractive wages or convert part-time contracts to full-time. This improvement eased the losses inflicted on incomes by inflation, which remained at high levels for the second year in a row in 2023. Moreover, a large percentage, 30.9%, received a salary in 2023 of up to 800 euros gross – i.e. employees who are on the edge of the current basic salary in the private sector.

From the processing of data from the Ergani information system, it appears that the average monthly gross wage (as derived from the total of the monthly gross salary paid by employers to their employees before taxes and contributions) amounted in 2023 to €1,251, against €1,176 in 2022, registering an increase of approximately 6.4%. This is the highest amount in 10 years, but still lags behind pre-crisis levels.

In 2022 average monthly gross earnings had increased by 5.28% compared to 2021. However, the average annual inflation in 2022 was 9.6% and in 2023 at 3.5%. In other words, cumulatively in the two years 2022-2023 the increase in the general consumer price index was higher than the corresponding increase in the average gross monthly earnings of employees.

Due to the increase in the minimum salary, there is a shift of wage earners from low to middle income groups. Therefore, in 2023 a decrease of 15.45% was recorded in the number of those receiving monthly salaries of up to €800 gross, although of course they still constitute a very high percentage, around 31%. On the other hand, the percentage of employees with a gross monthly salary of more than €800 has increased, with the largest increase recorded in the group of those with a gross monthly salary over €3,000 and in the group of those between €1,501 and €2,000.