Deal reached on collective labor accord
Trade unionists and employers’ groups yesterday agreed to a 5.4-percent wage increase for this year and a 3.9-percent hike next year in the fifth round of talks on a new two-year collective wage agreement. This year’s wage increase will be paid in two installments, with a 3.6-percent raise backdated to January 1 and a 1.8-percent increase applying from July 1. Deducting a 1.1-percent inflation clause from the 2000-2001 wage agreement and estimated inflation of 3.3 percent for this year, the real wage increase comes to 1 percent. Next year’s pay hike of 3.9 percent comes into effect on January 1. A catch-up inflation clause of up to one percentage point will take effect in the event that consumer prices in either year exceed the official projections. The two sides, however, continued to disagree on a launch date for a 39-hour working week but agreed to continue talks on the issue to the end of May. Trade unionists want the shorter working week to apply from next year while employers prefer a kick-off date in 2004. Yesterday’s agreement on a 5.4-percent wage increase represents a compromise, with the General Confederation of Greek Labor (GSEE) backing down from its initial demand for 6 percent and employers’ groups raising their 4.5-percent offer. Unit labor costs (ULC) are officially projected to rise by 2.3 percent this year from 2.2 percent in 2001. But Schroder Salomon Smith Barney economist Miranda Xafa, in a research note released early this month, warned that ULC could jump to 3 percent this year due to a cyclical drop in productivity and the inflation catch-up clause from the last wage agreement. With eurozone ULC expected to slow down to 1.9 percent, the higher Greek labor costs could hurt Greece’s competitiveness, she said. The Bank of Greece in its semi-annual policy report urged that real wages should move in line with productivity growth. While the private sector managed to cobble together a new two-year wage agreement yesterday, banking employees have yet to reach a consensus with financial institutions. The banking sector union is seeking a 7-percent raise and has called for a 24-hour strike on Friday to press home its claims.
