Salary increase promised by K. Mitsotakis “frozen” until 2027

As the saying goes, “the promised 3 years are waiting.” This is what happened in reality with the campaign promise of Kyriakos Mitsotakos for a pay increase, which has now been postponed until at least 2027.

The freeze, at least for the next two years, calls into question any talk of raising the minimum wage in the three-year period following the European Commission’s spring report and the medium-term program presented by the government shortly before the dissolution of parliament.

Although in March last year, according to the Greek and European statistical authorities (ELSTAT and Eurostat respectively), unemployment fell to 10.9%, and the number of unemployed now stands at 508,744 people, the commission in its spring forecast for our country does not “see” an immediate decrease in unemployment. On the contrary, she predicts a slow decline, to only 11.8% by 2024. And of course, no body takes into account in its calculations the thousands of young people who have emigrated abroad, a phenomenon that has drastically reduced the unemployment rate in Greece…

Even more conservative is the forecast of the Stability Program presented by the European Commission, since in it the “unfreezing” of three-year minimum wages in the private sector is relegated to an even more distant 2027. In particular, according to her estimates, unemployment should fall to 11.8% in 2023 and slow down to 10.9% in 2024, 10% in 2025 and 9.8% in 2026, unless, of course, something happens anything that goes beyond the plan of European officials.

But in this year’s budget, the economic staff’s estimate of the unemployment rate in 2023 is also set at 12.7%. It should be noted that the condition for “unfreezing” the three-year periods is the reduction of the unemployment rate on an annual average below 10%.

Indeed, even during the election period, Kostis Hadzidakis, the Minister of Labor and Social Affairs, when asked about this problem, did not rule out taking any decisions at the end of 2023 or in January 2024, provided, however, that the unemployment rate falls below 10 %.

As the experts explain, even if the three-year periods are “unfrozen”, the 10% increases for three years will start to be counted from this time period, and not retroactively from 2012, when they were “frozen”.

So, for example, an employee with 3 years of experience on January 1, 2012 and a 10% increase in salary, if the three-year periods were not “frozen”, would have to receive an additional 10% on January 1, 2015, that is, upon completion of 6 years of service, and another 10% on January 1, 2018, when he has worked for 9 years, that is, the total increase will be 30% (10% from the first three-year period and + 20% from the next two).

But at the end of February 2012, in pursuance of the second memorandum, Law No. 6 was adopted, and along with a sharp decrease in the minimum wage, a “freeze” of three years of service was provided until the unemployment rate fell to single digits.

In fact, even if this happens, for example, in 2025, this does not mean that time will automatically “unfreeze” in our example, starting from 2015. While there are proposals for the three-year term to be retroactively counted if held by the same employer, so far the ND has not put its cards on the table. Similarly, it is unclear what will happen to higher salaries. Since there is no clear provision in the industry or company agreement, unless there is a clear provision in the new law, the employer may consider that three years of service are included in the salary.

It should be recalled that Kyriakos Mitsotakis, a few days before the May elections, stated that his goal was a 25% wage increase, a promise that would obviously not be kept.

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