Investments and wages

I will share some thoughts regarding an issue which is not really in my purview, namely the economy in terms of the labor market. I won’t mention any particular economic theories (I am not an expert, after all) as I am addressing a personal concern based on everyday experience.

We like to say that we support investment and private initiative for Greece; we say that the country needs to become more flexible and more business-friendly to purge itself of longtime structural obstacles. The above credo in theory lies behind the key objectives of the new conservative government.

However, for the great majority of workers across the country the new norm is a monthly salary that ranges between 500 and 700 euros. These people simply cannot make ends meet. What is worse, this 500-700-euro salary (which involves a heavy workload, as the drop in wages does not mean fewer obligations) is not expected to rise. 

There are thousands of salaried workers in the private sector at the moment, people with university degrees and qualifications who are eager to work, who are struggling to make 700 euros a month, without any meaningful prospects in the near future.

If the new businesses that invest in Greece hire staff under these conditions, then I am afraid it will be in vain. At some point, a large mass of young, productive people will reach an impasse (unless they have already left the country). Many people are struggling already.

We know what impasses of this nature tend to generate: demagoguery, populism and a rise of the political extremes on the left as well as the right. 

Ill-conceived and distorted notions regarding the normality of salaries (“it is what it is and if you don’t like it you can always leave”) will inevitably lead to an equally distorted understanding of political normality.

What would be the point of such an investment? One could say it would create new jobs and reduce unemployment. Technically speaking, this might indeed be the case. In reality though, the young employee will soon realize that they are in a lose-lose situation because they cannot live on that amount. So what’s the point? The question is not just a rhetorical one. It would be interesting to hear what an economist has to say, because I personally see no point in that. And I am not talking about a return to the preposterous lifestyle of yesterday, but something realistic.

Greece is a small country and, as a result, a small market which is further strained by a problematic mentality regarding production. Perhaps that 500-700 is the realistic scenario. However, it is certain that this scenario will not take the country very far.

I am afraid that we are now witnessing the real consequences of the crisis: We have left behind the soup kitchens and the (alleged) suicides to enter into a crawl mode, a state of people dragging themselves along miserably without real prospects and without reward for the best. And this is considered to be the norm.