Minimum wage: ‘kick-off’ for 3rd increase in 16 months until Monday

By Chrysostomos Tsoufis

No later than next Monday, the government will table in Parliament the required provision to implement the increase in the minimum wage from April Fools’ Day, thus kicking off a process that will result in the 3rd increase in the minimum wage in the last 16 months.

The fermenting process with the representatives of employers and employees as well as the scientific bodies may not yet have started, but it should be taken for granted that the final increase will give a result which will exceed €751 of the pre-memorial years, that is, it will be at least of the order of 5.5%.

The 2 leading ministers of the government sent “indicator fire” with statements. Kostis Hatzidakis, responsible for the matter, stated on ERT radio that he is confident that the decisions that will be made will lead to a significant increase in the minimum wage. Christos Staikouras on Real Fm spoke of the need for a bold increase. And an increase of €38 from €713 now to €751 cannot be called brave, when inflation – even if it is slowing down – is at such levels.

THE Business & Retail Association of Greece he is the first to express himself openly stressing that he will propose the return of the minimum wage in 2012 and €751.

According to information from skai.gr, employers’ organizations such as ESEE, GSEVEE and the chamber associations would not oppose even greater increases since they believe that a large part of this money will return to the market and therefore to them. But they will put on the table the further reduction of taxation with an emphasis on advance tax but the elimination of tax burdens of memorandum inspiration such as the abolition of the pretension fee.

Given that we are going to a significant increase in the minimum wage, the stance that will be taken by SEV and SETE, which represents the tourism sector, which last year encountered great difficulties in staffing its businesses, is of particular interest. Both agencies are currently formulating their stance, but market players commented that regardless of the final amount of the increases, the government – although it has done enough as they acknowledge – must go further with the reduction of insurance contributions. It is recalled that the government has reduced contributions by 4.4 units having promised 5. The same factors meaningfully noted that companies with an entrenched position in the market and an extroverted nature gave a dividend to their employees from their profits this year. And therefore the increases that will be given should not jeopardize their profitability.

In the coming weeks, employers and employees will submit their proposals, which will be evaluated by the LAUGH and at the beginning of March, Kostis Hatzidakis will propose the new increases to the cabinet.

It is estimated that around 650,000 workers are paid the minimum wage today, up from around 150,000 in 2012.

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