Wage Disparities and Challenges in Greece’s Labor Market

In the latest Monetary Policy Report 2023-2024 from the Bank of Greece, it is highlighted that there has been an uneven shift in wage distribution between 2016 and 2023. The report points out that although the minimum wage has seen consecutive increases, higher-end wages have shown little growth. This contrasts with the government’s repeated assertions of rising wages for Greek workers.

According to the Bank of Greece’s analysis, wage increases have primarily benefited low-paying positions, while higher-paying roles (over 1,650 euros in 2016) have seen significant reductions. Small businesses have implemented more conservative wage hikes for lower-paying jobs, contrasting with a notable 10% decline in earnings for higher-paid positions.

In recent years, a policy focus has been on encouraging Greeks who emigrated during the crisis, particularly after 2010, to return to Greece for employment opportunities. Research from the Brain Regain initiative indicates that nearly one in four Greeks abroad cite low wages and poor working conditions as major barriers to their return.

Therefore, improving wage conditions in the job market is crucial to attracting skilled expatriates back to their home country. Recent studies also highlight the considerable challenges businesses face in recruiting qualified personnel. With a growing demand for skilled workers, an inevitable increase in their wages is anticipated.

Furthermore, data from ERGANI’s annual surveys for private-sector employees under private law contracts show that cumulative wage increases for full-time workers in the private sector from 2016 to 2023 amounted to approximately 33%.

However, this increase has been more pronounced in lower-paying positions. Conversely, no such wage growth has been observed at higher gross wage levels, where typically more specialized workers are employed.

These inadequate wage conditions have made it more challenging to attract skilled personnel, with salaries for these roles actually decreasing in real terms due to inflation. This situation not only risks failing to repatriate emigrants but also threatens to erode valuable human capital, potentially stalling Greece’s technological advancement and economic growth prospects.