Wages haven’t helped growth
Salary increase has only had a negligible effect on consumption, says an INE GSEE report
The participation of the increase in wages in consumption and, by extension, in the growth of the Greek economy in 2023 was negligible, per the annual report by the Labor Institute of the General Confederation of Greek Labor (INE GSEE).
Moreover, data show that Greece recorded the largest percentage decrease in real income from work (-8.3%) among all 27 countries of the European Union in 2015-2023. Therefore, Greece not only does not converge with the EU27 in terms of social sustainability, but it also diverges rapidly both from the Northern European countries and from those in the south, which developed rapidly during the same period.
According to INE GSEE, the growth of the economy in 2023 and the first quarter of 2024 was based on consumption. Higher incomes from self-employed work and, to a lesser extent, consumer loans contributed more to this development. The increase in wages and their contribution to real disposable income and by extension to household consumption “was meager,” INE GSEE researchers found.
At the same time, and while the labor market situation in 2023 continued to show signs of improvement, Greece’s performance in a series of key indicators that determine the degree and prospects of integration into the labor market, the quality of employment, salaries, protection and the institutional empowerment of workers continued to deviate significantly from the corresponding ones in most EU member-states.
In 2023 the employment rate in Greece, although increased compared to 2022, reached 61.8%, a performance that ranks our country in the penultimate position among the member-states. This percentage is 8.6 percentage points lower than the EU average, and more than 10 percentage points lower than the equivalent of other EU economies.
The deviation of productivity from real salaries in 2019-2023 has led to a systematic redistribution of income at the expense of work. The largest productivity-real average wage gap was in financial and insurance activities (24.6%), manufacturing (22.7%) and construction (22%).
