Definition of this minimal salary “in an economically rational manner”, not higher than the established inflationscientific bodies involved in a process that started in the previous period and is expected to end in mid-March, with a final decision Ministry of Labor, in contrast to employers, mostly small and medium-sized, with low external presence and corresponding international competitiveness, who advocate slightly higher growth. So, KEPE, IOBE and TTE they believe that a bold increase in the minimum wage would harm the competitiveness of the economy and disproportionately increase the cost of labor. A position that is contrary to the GSEE, which requires an increase to 826 from 713 euros today, GSEVEEwhich even discusses an increase from 8% to 10% and the ESEE, which will accept an increase close to that applied to pensions.

In particular, the Bank of Greece proposes an estimated increase from 3% to 5%, taking into account the economy’s competitiveness and price stability. As the Bank of England points out again, for every percentage point increase in the minimum wage, the average wage per worker in the private sector increases by about 0.4-0.5%. At the same time, it is noted that the percentage of minimum wage jobs dropped significantly in 2022, likely because businesses responded by raising wages above the minimum wage to find workforce.

In its report, KEPE explains that Greece’s international competitiveness did not deteriorate in 2022, even as unit labor costs increased, as wages increased more than product.

Of course, this is mainly due to a parallel deterioration in the competitiveness of our competing countries. According to the scientists of the Center, there are opportunities to increase the minimum wage, but it should not be too high, as this will place an additional burden on small businesses and enterprises in specific industries. In fact, he notes that, for reasons of equality, the increase in the minimum wage should not exceed the increase recently granted to pensioners (7.75%). And it points to a side effect associated with the current tax system, since workers who receive the minimum wage and have two or more children are currently not subject to income tax. Any increase of more than 0.5% will result in exceeding the tax-free limit and moving to a higher tax bracket and therefore an additional tax burden.

The headroom for minimum wage growth is close to estimated inflation for 2023, the IOBE “sees” in its report, specifying that any changes are expected to have a direct impact on a large share of workers in flexible forms of employment, workers in small and medium-sized large companies, and as well as service workers. At the same time, it has been recognized that it is necessary to provide parallel support through targeted policy measures to the most vulnerable households, without jeopardizing the course to reduce high unemployment or the goal of reducing informal employment. needs of today’s Greek economy, IOBE considers it appropriate to continue as a fiscal priority further reductions in non-wage spending, especially with regard to labor taxation and social security contributions, possibly also through the application of a minimum wage. The SETE Institute advocates the need to further improve the international competitiveness of the domestic economy while further reducing unemployment and returning inflation to below 2%. In this context, he sees an increase in the minimum wage to 5.5%, which will contain the decline in Greece’s international competitiveness.