ECONOMY

Unions urge anti-poverty plan as study finds profits surging

Greece appears to have one of the highest income inequalities in the 25-member European Union; the total income of the most prosperous 20 percent of Greeks is 6.2 times greater than that of the poorest 20 percent, according to a study by the Employment Institute (INE) of the General Confederation of Greek Labor (GSEE) and the civil servants’ union (ADEDY), released yesterday. Only Portugal and Estonia appear to have higher degrees of inequality, with respective multiples of 6.4 and 6.3. GSEE Chairman Christos Polyzogopoulos, who presented the study, called for a five-year program to fight poverty among the disadvantaged 20 percent and for raising the ceiling of the lowest, tax-free, income bracket to 12,000 euros. He accused employers of «speculation at the expense of wage earners» – attested to by the report’s finding that rising inflation is mainly due to a surge in business profits – and slammed calls for the unions to show restraint in their demands. The issue at hand does not concern handouts but a policy of real income redistribution in line with the potential of the economy, he said. The INE study says the positive performance of the Greek economy (high rates of growth in gross domestic product [GDP] and investment and a rising labor productivity) contrasts with income inequalities. Gross wages rose 5.1 percent in 2002, of which 4.1 percent is attributed to a rise in productivity. In turn, partly due to a 1.1 percent fall in real wages, the profitability of firms has been steadily on the rise since 1991 and is projected to exceed by 10 percent the average of the so-called «golden» 1961-1973 period, the study says. ‘Profit inflation’ INE Director Savvas Robolis said the continuing rise in inflation, considerably above the EU average, and given the rise in productivity and the fall in labor costs, could only be explained in terms of arbitrary price hikes by enterprises – a phenomenon he described as «profit inflation.» The lowest Greek wage, he said, exceeds the average of the 10 new EU members but is about 50 percent of the respective lows in the richest existing members. The study notes that unemployment is now approaching the EU average although employment is still least based on part-time jobs but that 55 percent of new hirings are on a «flexible» or seasonal basis. Further, it says that the influx of immigrant workers has not led to any serious upheavals in the labor market and has facilitated restructuring and private investment. INE says the introduction of a central mechanism for contributions to the social security system through the state budget boosts its viability prospects until the year 2050. But it notes that despite higher social spending, budget contributions to social security last year fell from 32.8 percent to 29.1 percent. The shortfall was met by employees’ contributions, while those of employers remained almost unchanged at 38.2 percent. The Economy Ministry said in a statement yesterday that data on poverty cited by the main opposition party did not take into account Greece’s high rates of privately owned homes and consumption of yields from self-grown agricultural production.