Wages: Increases are coming – How much they will reach by 2027 –

Annual wage increases of 4.8% to 5.3% are foreseen over the next four years in order to achieve the government’s targets of setting the minimum wage at €950 in 2027 and the average wage at €1,500.

According to the medium-term fiscal strategy framework, the growth rate of the minimum wage will be around 40 euros per year, so that it will gradually rise from 830 euros in 2024 to 950 euros in 2027.

Accordingly, the government goal provides setting the average salary at 1,500 euros at the end of the four-year period. Achieving this goal requires increases close to 5.3%, i.e. an annual increase should exceed approximately 60 euros. The average salary in 2024 should rise to 1313.55 euros from 1251 in 2023 according to the annual report of ERGANI. In 2025 it will rise to 1379.22, in 2026 to 1448 euros to reach 1520.50 euros in 2027.

The lack of collective labor agreements creates an additional difficulty in the formation of the new average wage, as large groups of workers do not sign contracts for several years, with the result that their wages are compressed close to the limits of the minimum wage.

Increases on average, close to 5% per year for the next few years, the Bank of Greece also predicts in its report, in which it is noted that the nominal remuneration per employee will increase at a rate of around 5% in the next few years. The growth rate forecast by the central bank is 5.8% this year, 4.9% in 2025 and 5.1% in 2026.

The details of the Bank of Greece

At the same time, the Bank of Greece, in its latest report on Monetary Policy, predicts wage increases of 5% on average for the coming years, stressing that companies will be forced to raise workers’ salaries on the one hand to keep them in their positions and on the other hand, to attract skills and qualifications that are in short supply and affect the competitiveness and profitability of the companies themselves

As characteristically stated in the report of the Bank of Greece “nominal wages per employee will increase at a rate of around 5% per year, mainly as a result of the intensifying tightness in the labor market, but also based on the recent collective labor agreements in various branches of the private sector”.

The conclusion of collective labor agreements plays a catalytic role in the increase of the average wage, for this reason the Minister of Labor Mrs. Niki Kerameos is expected to include in the bill for the integration of the Community Directive on decent minimum wages, a provision that will encourage employers’ and workers’ organizations to sign more industry contracts. The goal will be for the increases included in the contract to be mandatory across the industry.

Interventions are being studied so that the social partners are facilitated in the negotiations by using more sources of information on wage increases, while the 51% of employer representation is reviewed, as a condition for the extension of sectoral agreements. The reduction of the specific percentage is being discussed with the aim of bringing it down to a lower percentage in order to achieve the validity of a sectoral contract for all employees.

This directive requires member states to cover at least 80% of their employees with collective labor agreements that will determine the amount of wages. It is noteworthy that in our country the percentage of employees covered by collective agreements is lower than 30%.

Criteria

In addition, the bill will include new criteria – figures that will determine the amount of increase in the minimum wage after 2027. This will take into account the purchasing power of wages, the general level of gross wages, the rate of their increase and labor productivity

The scientific committee set up in the Ministry of Labor to elaborate the directive proposes objective criteria in the way of determining the minimum wage in order to ensure that the wages will keep pace with the general course of the economy, while at the same time the most economically weak households will be supported.

Source: ot.gr