A roadmap to ensure that, within six months of the approval of the Community Directive on minimum wages, the foundations for changes and interventions in the area of Collective Agreements are laid is being prepared by the Ministry of Labor.
This is an initiative included in the scope of the Directive, which should become State law by mid-November. With the SSE in the country evolving at very low levels, it is also the main objective of the political leadership of the ministry to provide an additional stimulus to support wages in the private sector. Thus, until the completion of the relevant roadmap, it is expected to review all the memorandum measures that the unions demand for preventing the signing of new Collective Agreements. In these, the extensibility of these to all businesses in a sector and the criteria governing the process, as well as the functioning of the Mediation and Arbitration Organization (OMED), have a dominant position, in order to facilitate the SSE from now on.
Financial results increases are not helping enough
In the first phase, it seems that it has now been realized that only practical support from the SSE will soon lead to higher wages. Successive increases in minimum wages may affect around 600,000 workers, but they do not help as much as they should in the area of average, nominal and real wages. This is why, after all, the recent report by the Institute of Labour (INE) of the GSEE showed that the last quarter of 2023 closed with average real labor income in Greece at only 90% of purchasing power compared to 2019, compared to 97% in the EU of 27 member states.
The decline in average nominal real income (as a consequence mainly of the increase in consumer goods, which was not accompanied by a corresponding increase in wages) can be observed in almost all branches of the economy. And this while labor productivity is higher than in 2019. Specifically, there is an increase of 1.6% in Industry, 20.4% in Manufacturing, 7.4% in Construction, 4.5% in Wholesale and Retail Trade, while it reaches 29.1% in Information and Communication.
But, on the contrary, the average real wage per capita in the sector, in the absence of the ESS, does not show a corresponding increase. In Information and Communication it may increase by 22.3%, but it falls short of 6.8 points in relation to productivity. On the contrary, there is a drop of 13.5% in Industry compared to 2019, a drop of 2.3% in Industry, 14.6% in Construction, 7.7% in Wholesale and Retail Trade, Transport, Accommodation and Catering, while in Financial Services and Insurance activities a drop reaches 26.1%.
More fixed-term contracts
An additional element that makes support for Collective Labour Agreements even more imperative is fixed-term contracts. According to data from 2023, the percentage of workers in Greece who worked on fixed-term contracts, either because they did not find a permanent job or because the nature of the work only corresponded to the status, reached 12.8% of the total part-time.
Given that the corresponding percentage in the EU for the same period was 8%, it follows that fixed-term contracts in the country are 50% more than in the rest of Europe. Therefore, there is a risk that these contracts lead to lower wages for those who sign them, since they are for a limited period of time. At this level, the SSE could offer a solution by outlining a more stable employment regime and limiting fixed-term contracts.
Significant delay in employment conditions
After all, the SSEs also largely determine employment conditions. Data made available to the Ministry of Labour, mainly through a Eurofound survey with the reference year 2021, show that more than one in three workers in Greece (34.4%) worked more than 48 hours per week. This is the worst performance in the EU, with the next worst, recorded in Romania, 8.8 points lower. It is even worse if the comparison is made with the European average, which is 20.8 points lower, or just 13.6%.
This obviously explains why 30.3% of workers in Greece say that their working hours are not compatible with other family or social obligations. Another factor that plays a decisive role in this regard is the fact that almost six out of ten workers (58.2%) reported working outside normal working hours in 2023. This means that they worked shifts or worked in the afternoon, evening or on weekends. This percentage is 24.3 points higher than the corresponding European average of 33.9%.
All these facts, which are known to the Ministry of Labour, clearly show why ESSs should be supported, as they, in addition to wages, also determine working hours.