Scenarios for a significant increase in the minimum wage, which will in any case exceed 820 euros and is not excluded to reach 840 from 780 euros is currently being worked out by the Maximou, which will have the final say on the increase in the minimum wage in 2024.
The move – surprise in relation to the minimum wage with an eye on the European elections is a surprise, as political and economic actors believe, given the tight fiscal margins that close the door for new benefits to vulnerable groups.
According to the timetable, by Friday Labour Minister Domna Michailidou will have to hand over to the prime minister her recommendation which will be discussed and approved at the cabinet meeting on Wednesday 27 March.
We note that the final memorandum of the Centre for Planning and Economic Research – KEPI on the new minimum wage, which is a synthesis of the individual findings of scientific bodies and social partners, recommends increases of 4%-5%.
This means that based on the proposed 4%-5% increase, the new minimum wage for 2024 will range from April 1 from 811.2 to 819 euros, while with the three years and the marriage allowance, a senior employee can be paid 1146.6 euros per month.
However, it seems that the Maximou will not be satisfied with this rate but will scale up to mitigate the loss of purchasing power of low-paid private sector employees.
On the other hand, it is stressed that the competitiveness of the Greek economy should be preserved and negative effects on employment and unemployment should be avoided.
The scenario on the table foresees increases of 5.5% to 6.5%, i.e. the new salary will range from 822.9 to 830.7 euros.
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However, it is not excluded that a higher increase may be decided in order to bring the net increase in hand closer to 50 euros, which is considered a significant amount.
In its report, the CCI had proposed a calculated increase in the minimum wage that is not far from the average inflation of 2023 ( 3.5%) as it will be more burdensome for small businesses.
As the scientific body notes, describing the state of the Greek economy, due to high private domestic and foreign direct investment, the recovery of consumption and tourism, leading to an estimate of GDP growth in 2024 of over 2% (KEPE, BoE, EU) combined with the recent recovery of the investment grade, set the stage for an increase in minimum wages, mainly due to erosion from high inflation but also due to difficulties in finding workers.
However, any increase should be calibrated, as 2024 is projected to be a low-growth year, while the potential for increased wages to inflation by creating a wage-price spiral should not be underestimated.