Major disparity in course of salaries and prices

The oligopolies that continue to define numerous market sectors in Greece are mostly due to an irregularity between the growth of salaries and prices, the Bank of Greece said in its latest bulletin.

The data on labor costs per unit and the course of prices in the period from 2010 to 2013 showed that the former declined by an average 3.3 percent across the economy while the latter expanded by 2 percent.

At the same time, profit margins grew by 3.3 percent, illustrating the inflexibility of prices rather than a trend towards excessive profiteering. This means that the decline in labor cost has been entirely transformed into profit margins.

The disparity between salaries and prices during the peak period of recession becomes even more significant when compared with the pre-crisis period. While from 2000 to 2009 there was a relatively proportionate expansion in salaries and retail prices, the major change of course for salaries started in 2010, resulting in significant disparities by 2013.

A typical example is the industrial sector where labor costs declined by 6.9 percent from 2010 to 2013, while retail prices grew by 2.3 percent.