Minimum wage nearing average salary
With the new increase in the minimum wage to 780 euros gross and the drop in unemployment, a view across private sector payrolls in 2023 would show that about half of the country’s workers will be paid gross earnings of €700-1,000 – i.e. up to €820 euros net.
The percentage of people in this income category is expected to be around 45-50% at the end of 2023, from just 28% at the end of 2019.
There are two main reasons for this surge: the increase of the minimum salary from €650 euros to €780 euros from 2019 up until now, and the fact that the number of workers with takings below €700 has decreased – and will decrease further. Therefore, while there are substantial inflows in the income bracket of €700-1,000, there are no corresponding outflows as the raises that depend on employers and not on government intervention are currently limited.
That is also reflected in the average gross salary in the private sector, which has so far increased by 13% compared to 2019, when the increase in the minimum wage will exceed 22% as of April.
The problem that will emerge even more strongly in the upcoming period is the lack of well-paid jobs. Gross earnings of over €1,500 in Greece are currently received by only one in four workers in the private sector, or approximately 380,000 employed, while the “€800 generation” will number more than 1 million individuals in 2023.
The few best-paid are also those who have been under intense pressure lately, as mortgages had been issued at those salary levels. Rising debt service costs coupled with growing living costs – especially due to food prices – are making the situation even more difficult for workers who are middle income earners.
In 2019-2022, the dominant change in the private sector payroll was a rise in the minimum salary, sharply reducing the number of people employed in the private sector with incomes at the poverty line (below €500 euros) or even below €700 euros. While the employees with salaries from €500-700 numbered approximately 300,000 in 2019 and 337,000 in 2021, in 2022 there were only 126,450 left, while with the new minimum salary at €780 it is likely that another decrease will be recorded this year.
