The increase in the minimum wage to 663 euros from 650 euros was passed by a cabinet of ministers assembled under the leadership of Prime Minister Kyriakos Mitsotakis.
Minimum wage: reasons that led to a 2% increase
According to the Ministry of Labour, “the decision was taken after the completion of consultations involving research and scientific bodies, the Bank of Greece, social services, etc., based on the proposals made, the sustainability of the economy and business, especially small and medium-sized ones, as well as the international situations.”
According to the Ministry of Labor, the decision was made based on the dynamics of the economy for the two years of 2019-2020. (given that the previous increase in the minimum wage took place at the beginning of 2019) and forecasts of international and domestic organizations, economic development institutions in 2021 and 2022.
According to ELSTAT, GDP in 2018 amounted to 180.068 billion euros, while in 2020, due to the coronavirus crisis, it amounted to 168.737 billion euros. That is, it decreased by 6.29% compared to 2018, mainly due to the effects of the pandemic. Recall that the decline in 2020 was 8.2%.
International and domestic institutions predict strong growth rates both in 2021 and mainly in 2022, tentatively:
European Commission +4.3% in 2021, +6% in 2022, International Monetary Fund: +3.3% in 2021, +5.4% in 2022, Bank of Greece: +4.2 % in 2021, +5.3% in 2022
“Given the above data for the two years 2019-2020 (cumulative decline of 6.29%) and forecasts for 2021 (growth of 3.3-4.3%), the government decided to increase the minimum wage by 2% from January 1 2022.
This is a very reasonable increase that reflects current performance as well as the outlook for the economy and does not jeopardize businesses and jobs. Growth forecasts in 2022 (5.3% – 6%), which are even more favorable, will obviously be taken into account along with the reports that will be available in the process of adjusting the minimum wage, which will take place in 2022,” the ministry said in a statement. .
Why the minimum wage hasn’t increased more
According to the ministry, the minimum wage increased by only 2% and no more because otherwise it would hurt the economy and “ultimately the workers themselves.”
According to the Department of Labor, this would lead to:
Risk to the viability of companies affected by the pandemic and operating on the edge. This risk is particularly high as the hardest hit industries (catering, etc.) also have a high percentage of minimum wage workers. The risk of being fired or going to an undeclared job due to the difficulty of covering rising labor costs in the midst of a recession. A further deterioration in the competitiveness of the Greek economy, as the negative effects of the pandemic were added to the severe impact already caused by the economic crisis (a decrease in productivity by 6.9% and an increase in unit labor costs by 7.9% in 2020) .
How much is the minimum wage going up?
According to the ministry, in Greece, the legally established minimum monthly wage for workers from 02/01/2019 is 650 euros, and the daily wage for artisans is 29.04 euros.
Considering that 14 salaries are paid in Greece, this corresponds to 758 euros / month. Circular 7613/395-18-02-2019 of the Ministry of Labor provides that the above amounts increase up to 30% depending on the length of service of the employee until 2012. Thus, the minimum wage could be 195 euros higher.
Accordingly, from January 1, 2022, the minimum wage is set at 663 euros per month (or 773.5 euros broken down into 14 salaries), and in three years it reaches an increase of 198.9 euros. The daily minimum wage is set at 29.62 euros from 1 January 2022.
Minimum wage for different categories of workers.
Ύψος κατώτατου μισθού και κατώτατου ημερομισθίου για διάφορες κατηγορίες εργαζόμενω.
Σήμερα
1-1-2022
Έτη προϋπηρεσίας:
Υπάλληλοι (€/μήνα)
0-3
650.00
663.00
3-6
715.00
729.30
6-9
780.00
795.60
9 και άνω
845.00
861.90
Κατώτατος μισθός με επίδομα γάμου (€/μήνα)
0-3
715.00
729.30
3-6
780.00
795.60
6-9
845.00
861.90
9 και άνω
910.00
928.20
Εργατοτεχνίτες (€/ημέρα)
0-3
29.04
29.62
3-6
30.49
31.10
6-9
31.94
32.58
9-12
33.40
34.07
12-15
34.85
35.55
15-18
36.30
37.03
18 και άνω
37.75
38.51
Κατώτατο ημερομίσθιο με επίδομα γάμου (€/ημέρα)
0-3
31.94
32.58
3-6
33.40
34.07
6-9
34.85
35.55
9-12
36.30
37.03
12-15
37.75
38.51
15-18
39.20
39.98
18 και άνω
40.66
41.47
According to the Ministry of Labor, since February 2019, the purchasing power of the minimum wage has increased, on the one hand, due to deflationary pressure (-1.3% in 2020), and on the other hand, due to a 1.63% decrease in insurance contributions paid by employees (from 15.75% to 14.12%). For a full-time employee earning a minimum wage of €650, the total benefit from reduced insurance premiums is €10.6/month, or €148.3/year (based on 14 salaries).
That is, in total, the real annual income of full-time employees receiving a minimum wage of 650 euros increased by about 250 euros per year due to negative inflation and lower insurance premiums. And now, with a second increase in the minimum wage, it will increase from January 1, 2022 by an additional 182 euros.
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