Pay gap be­tween pri­vate, state sec­tors

La­bor flex­i­bil­ity and taxes have in­creased poverty among house­holds and slashed dis­pos­able in­comes

Kathimerini English - - Focus - BY ROULA SALOUROU

More than half of pri­vate sec­tor em­ploy­ees in Greece are paid less than 800 eu­ros per month, com­pared with just 11 per­cent in the pub­lic sec­tor, while the real un­em­ploy­ment rate is more than 30 per­cent, the coun­try’s big­gest union claimed in its an­nual re­port pub­lished yes­ter­day.

The La­bor In­sti­tute of the Gen­eral Con­fed­er­a­tion of Greek La­bor (INE- GSEE) noted in its 2016 re­port on the Greek econ­omy that cri­sis-in­duced in­equal­i­ties among dif­fer­ent groups of work­ers and the dec­i­ma­tion of the la­bor mar­ket have had a neg­a­tive im­pact on pro­duc­tiv­ity. The in­crease in la­bor mar­ket flex­i­bil­ity last year trans­lated into 51.6 per­cent of pri­vate sec­tor salary work­ers re­ceiv­ing less than 800 eu­ros per month at the same time as half of all civil ser­vants were be­ing paid more than 1,000 eu­ros per month.

Af­ter pro­cess­ing the salary data in the pri­vate sec­tor, INE-GSEE found that net pay was up to 499 eu­ros per months for 15.2 per­cent of work­ers, be­tween 500 and 699 eu­ros for 23.6 per­cent, and 700 and 799 eu­ros per month for 12.8 per­cent. Just over one in six (17.3 per­cent) re­ceived be­tween 800 and 999 eu­ros. Mean­while, 38.5 per­cent of civil ser­vants had net earn­ings of be­tween 1,000 and 1,299 eu­ros and 15.7 per­cent col­lected more than 1,300 eu­ros per month.

The large de­cline in pri­vate sec­tor salaries and the fact that the in­sti­tute’s economists es­ti­mate that the un­em­ploy­ment rate is much higher than the of­fi­cial 23.1 per­cent are par­tic­u­larly omi­nous de­vel­op­ments which could erode so­cial co­he­sion and lead large parts of the pop­u­la­tion into poverty.

The re­port high­lights the in­crease in the rate of house­holds un­able to cover some of their ba­sic needs from 28.2 per­cent in 2010 to 53.4 per­cent in 2015. This is due to the ma­jor de­cline in dis­pos­able in­come and the drop in sav­ings. A rise was also noted in the rate of house­holds de­lay­ing loan and rent pay­ments (from 10.2 per­cent in 2010 to 14.3 per­cent in 2015). Worse, house­holds’ in­abil­ity (or un­will­ing­ness) to pay util­ity bills soared from 18.8 per­cent in 2010 to 42 per­cent five years later.

The re­port stresses that all of the above find­ings make any fur­ther ef­forts to­ward la­bor mar­ket flex­i­bil­ity en­tirely in­ef­fec­tive.

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