The Central Bank predicts an increase in wages throughout the economy this year

By Dimitris Katsaganis

Wages across the entire spectrum of the economy will go “uphill” this year, according to the forecasts of the Bank of Greece and which are reflected in its monetary report for 2021-22.

In particular, the Central Bank predicts that the total remuneration of dependent labor (i.e. employees) will increase this year by 5.8% compared to 1.7% last year. Also, dependent labor wages per employee will increase by 2.4% this year compared to 1.4% last year. Regarding labor costs per product unit in the entire economy it will increase by 2%.

In more detail, the report states that “in 2021, the marginal increase in the number of employees and the moderate increase in their per capita wages led to an increase in the total wages of dependent labor, while the recovery of productivity was impressive and the reduction of labor costs was significant per product unit.

Thus, as pointed out in the Governor’s Report for 2021, all indicators moved in the desired direction”.

Below, the Central Bank points out that “for the current year, the available data suggest that, at least in the first months, the moderate increase in wages continued.

In particular, in the business sector, it is recalled that from January 1st minimum wages increased by 2% and from May 1st by 7.5%, with the result that the minimum wage has now reached 713 euros and the minimum daily wage at 31.85 euros. Also, according to the Ergani information system, in the five months of January-May 2022, 78 operational collective labor agreements were signed, which concerned 66,285 employees.

Of these contracts, 33 provided for salary increases, while the rest kept them constant or related to non-salary issues”.

An increase, however, is also noted in the salary expenditure of the State. According to the monetary report of the Central Bank of Greece, “in the general government sector (s.s. Public) expenditure on staff salaries increased by 1.6% in the four months of January-April this year compared to the corresponding period of 2021.

In the business sector, the second increase in the minimum wage since May and inflation developments are likely to contribute to bigger wage increases in the last eight months of the year than in the first three or four. According to the forecasts of the Bank of Greece, wages per capita of employees will increase in 2022 clearly more than in 2021, but not too much, productivity will show a small increase (after last year’s big recovery) and labor costs per unit of product will show an increase, which, however, will compensate only a part of the decrease in 2021”.