Unionists, employers in wage deal
The country’s largest trade union grouping and employer groups yesterday signed a collective wage agreement for the next two years, a move made possible after the groups decided to detach wage increase talks from those related to a shorter work week and overtime pay. The new 2002-2003 wage deal includes a 1.1-percent increase this year to compensate for inflation overshooting the official estimate last year, a 2.5-percent raise, backdated to January 1, 2002, and a 1.8-percent hike effective July 1, 2002. Should inflation this year exceed the official projection, workers will be recompensed by a raise of up to one percentage point. The wage increase in 2003 is a flat 3.9 percent effective January 1. Though there is no inflation catch-up clause, the agreement leaves open the possibility for negotiations on this issue during the course of the year. Economists, however, are divided as to the impact of the wage deal on Greece’s competitiveness. Eurostat data showed total Greek hourly labor costs rising by 5.5 percent in the third quarter of 2001, the highest in the eurozone and the European Union. The new wage deal is significantly higher than pacts achieved in other eurozone countries to date. The deal is «on the high side» compared with the eurozone norm of 3-3.5 percent, Schroder Salomon Smith Barney economist Miranda Xafa wrote in a research note last week. With productivity growth not corresponding to the rapid wage growth, Greek competitiveness could take a hit, she warned. Investment bank Credit Suisse First Boston, however, is more optimistic. Greece’s «somewhat higher wage growth» is justified by its strong gross domestic product growth and productivity gains, it said in a research note released yesterday. It sees Greek productivity increasing by an annual rate of 2.5-3 percent over the next three years, implying an average unit labor cost growth of around 2.5 percent which would put it in line with eurozone data. Trade unionists and employer groups agreed to turn over the issue of a shorter work week and overtime pay to a committee, giving it an end of May deadline. The former wants to implement a 39-hour work week in 2003, while employers prefer a later kick-off date in 2004.
