Athens Chamber of Small and Medium Industries: The new minimum wage increase to 780 euros is positive

The Athens Chamber of Small and Medium Industries is in favor of raising the minimum wage to 780 euros and the minimum daily wage to 34.84 euros, with the aim of boosting the monthly income of the approximately 600,000 low-paid citizens of the country from April 1. Cumulatively, the minimum wage, from 2019, after the lifting of the restrictive measures due to the memorandums, increased by 20% from 663 euros to 780 euros gross.

But at the same time, the monthly burden on businesses for each employee who is paid the minimum wage rises by 81.8 euros, from 872 euros to 953.8 euros. A small and medium-sized business, with 5 people paid the minimum wage, will be asked to pay an additional 5,726 euros, on an annual basis. Thousands of vulnerable small and medium-sized businesses are now obliged to pay significantly higher wages to their employees – along with correspondingly higher social security contributions.

The rise in insurance contributions

In fact, combined with the increase in insurance contributions by 9.6% from January 1st, which entails a burden of 244 to 655 euros per year, depending on the insurance category of the self-employed person, the financial obligations of businesses increase disproportionately. Unfortunately, the government did not proceed with a simultaneous reduction in non-wage costs, which have been reduced by only 4.4 percentage points, when the minimum wage has increased by 20% since 2019.

While workers’ net earnings rise to 667 euros from 548 euros today, we are not sure that the increase in the income of those who are paid at the minimum levels – in this difficult economic time with soaring energy costs and prices of basic consumer goods – will strengthen their purchasing power and return to consumption. On the contrary, the monthly aid of 67 euros per month will be lost, in the repayment of energy bills, but also in the purchase of basic food items.

The ACSMI has repeatedly requested from the government, the increase of the minimum wage, to be combined with the reduction of social security contributions, or tax burdens, in order to avoid phenomena of non-payment of social security contributions and taxes, layoffs, but also padlocks.