Employers: Raise the minimum wage to be modest

Of Dimitris Katsaganis

The employers send a message to the financial staff with the memos that they sent to KEPE and which provide for a modest increase of the minimum wage.

Specifically, according to an exclusive report Capital.gr, The ΣΕΒ proposes one this year “mild” 4% increase in combination, however, with a reduction in contributions, the ΣΕΤΕ proposes an increase this year 3% -4%while ο ΣΒΕ recommends increase 3% -5% in 2023 and not this year.

In the background of the proposals of the employers’ associations is primarily the aggravation of the international energy crisis due to the war in Ukraine.

These proposals are reflected in the memoranda, which were sent by the social partners (employers’ associations and GSEE) to the KEPE. This is another step in the process of redefining the minimum wage.

It was preceded by the publication of the findings of scientific bodies (KEPE, IOBE, IME-GSEVEE, etc) as well as the BoG.

Both the memoranda of the social partners and the findings of the bodies are forwarded to the Center for Planning and Economic Research (KEPE) for the preparation of a Draft Consultation Finding, which will take place no later than March 31, 2022.

Immediately after the sending of the reports, the memorandum and the documentation of each person consulted by the Coordination Committee will be forwarded to the other representatives of the social partners (BSE, GSEVEE, GSEE, etc.), with an invitation for an oral consultation, which will take place no later than until March 15, 2022.

The draft consultation conclusion will be completed by 15 April 2022 at the latest.

The suggestion of the Minister of Labor and Social Affairs to the Council of Ministers for the determination of the minimum wage of employees and the minimum wage of craftsmen will take place within the last fortnight of April 2022.

It is recalled that in recent statements, the Prime Minister, Mr. Kyriakos Mitsotakis, has announced that the next increase in the minimum wage (after the 2% increase from January 1, 2022) will take effect from May 1, 2022.

BSE: 4% increase combined with a reduction in contributions

According to SEV, “the combination of an increase in the minimum wage with a simultaneous reduction in the employee’s contributions leads to a significant increase in his net salary.

In particular, each percentage point increase in the minimum wage by reducing the employee’s contributions by half a percentage point leads to a 2% increase in his net salary.

The increase in the gross minimum wage by 4%, which we propose, in combination with the reduction of the employee contributions (4 different scenarios), can lead to a greater increase in the net remuneration of those paid the minimum wage. 4% in the nominal and a reduction of 1.5% in employee contributions lead to an increase of 6%.

The reduction of insurance contributions will contribute to the reduction of the “tax wedge” in Greece (2nd highest position for a married employee with two children) and to the convergence with the OECD countries.

In order to harmonize the national system of setting the minimum wage with international labor standards, we propose the ratification of International Convention 131 “On the setting of minimum wages and salaries, especially in developing countries”.

GSEVEE: It is “necessary” to increase the minimum wage

In its memorandum, GSEVEE emphasizes that “recent adverse geopolitical developments create another particularly painful challenge, which is added to the ongoing, albeit less intense, pandemic crisis. In addition, it is added to the recent ten-year economic crisis. , the negative effects of which, especially on small and micro-enterprises, were not overcome in the short time between the formal end of fiscal adjustment programs and the onset of the pandemic.

Extremely high inflation, fueled mainly by rising energy prices, is now linked to the development of the Russo-Ukrainian war. On the one hand, uncertainties about the future are growing. Any prediction becomes particularly precarious.

Estimates for the Greek economy are being revised manually. On the other hand, the negative effects of inflation on the real income of employees and consequently on domestic demand and GDP require measures to be taken to curb the worst effects.

In this context, GSEVEE considers that an increase in the minimum wage is necessary in order to absorb the intense inflationary pressures and to support the disposable income, especially of the low-paid workers.

The increase in the minimum wage that is deemed necessary for both social protection and social cohesion reasons should take into account the particular characteristics and capabilities of small and micro enterprises in particular.

Therefore, we believe that every effort should be made to take relief measures that meet the needs and serious problems faced by a significant number of small and very small enterprises, as outlined in the next section.

Finally, we emphasize once again that GSEVEE remains firm in its position for the restoration of free collective bargaining and the restoration of the right of the social partners to the formation of the minimum wage through the National General Collective Bargaining Agreement (EGSSE). “

ESEE: In favor of a “significant increase in the minimum wage”

“The minimum wage is a safety valve so that the living standards of the beneficiaries are maintained at a tolerable level.

Today, the sharp rise in the cost of living as reflected in rising prices (with an emphasis on energy) is limiting consumer disposable income and raising operating costs for businesses, while geopolitical tensions are likely to increase uncertainty and postpone potential investments.

Therefore, the financial and business environment remain fluid, full of challenges and risks. In this context, it seems reasonable to increase the minimum wage, but which could be linked to subsidizing employers’ insurance contributions.

In any case under the current fragile conditions and according to the analysis that follows, ESEE concludes that there should be significant increase in the minimum wage and that the rate of inflation should be a key determinant of its formation”.

SETE: Additional increase of 3% -4% this year

For its part, the Association of Greek Tourism Enterprises (SETE), emphasizes “according to the analysis of the SETE Institute (INSETE) the main economic criterion for estimating the margin of an additional increase in the minimum wage is to preserve and improve international competitiveness .

It is also acknowledged that raising the minimum wage will directly boost low incomes, especially in an environment of high inflationary pressures.

The INSETE report estimates that the positive growth prospects of the economy in 2022, after its significant recovery in 2021, justify an additional increase in the minimum wage by 3.0% to 4.0% in 2022 (in addition to the 2% increase from the beginning of the year, a total of 5.0% to 6.0%), provided that the increase in real GDP during the current year will be close to 5% on an annual basis.

With these data, the increase of the minimum wage may lead to a slight deterioration of competitiveness on an annual basis, but the country’s international competitiveness in 2022 will be improved compared to 2018.

Under these conditions, the increase of the minimum wage will function as a measure of redistributive policy in the conditions of fiscal tightness that characterize our country and will be a support to the lower wages of the workforce.

This support needs to be strengthened through targeted policy measures focusing on vulnerable households and the low paid. At the same time, it will curb rising labor costs to levels close to those of major trading partners, in order to safeguard the international competitiveness of the economy and avoid a negative spiral of wage growth and inflation.

If growth expectations in 2022 worsen, then the 2022 Minimum Wage increase should be lower. Choosing an increase in the Minimum Wage beyond the above limits overall for 2022, is very likely to lead to a deterioration in international competitiveness, completely eliminating the improvement achieved in the last three years.

In addition, the companies, the vast majority of which are small and very small … in size, are already facing increased production costs due to the prices of energy, raw materials and intermediate products.

An excessive increase in labor costs in these conditions will increase the risks of either losing jobs, or turning full-time jobs into flexible forms of employment, or expanding undeclared and undeclared work.

In any case, the potential adverse effects of exceeding the above limits – or the limits that serve the national goal of improving competitiveness – can be very significant for the economy, competitiveness and employment, and therefore the prospects for future growth. of the Minimum Wage ”.

SVE: 3% -5% increase in 2023

In its memorandum, the Hellenic Industries Association points out that “the minimum wage next year to increase by 3% to 5%, after the 2% increase from January 1, 2022.

According to SBE, this increase must be accompanied by tax cuts for low-wage earners, so as not to evaporate from the increases in basic necessities and energy.

Finally, we propose to start a dialogue between the Government and the Institutional Social Partners, to discuss the possibilities of instituting additional measures that will help improve the income of those who receive the minimum wage.

GSEE: Immediate increase of 13.4%

The GSEE, on the other hand, proposes a large increase (13.4%) and even immediately, as it supports the “reinstatement of the definition of the minimum wage in the institution of the National General Collective Labor Agreement, as well as its role and function as a minimum general universal protection of all workers in the context of consultation between the social partners is crucial for the acceptance of the final determination of the amount, the its positive effects on the economy, society and democracy “.

Specifically, he asks “immediate increase of the minimum wage to 751 euros per month” and “then increase the minimum wage until it equals 60% of the median full-time wage.

The adjustment of the minimum wage to the level of decent living could be done on the basis of a combined change with 50% of the average wage full-time employment as a result of a timetable agreed between the social partners ”.

* In favor of the increase of the minimum wage the BoG and the scientific bodies-All the proposals