Minimum wage: What the final outcome of the JEP provides for the increase from 1 April

4% – 5% suggests for the final result of the KEPE (which is in the hands of the Minister of Labour, Mrs. Domnas Michailidou), according to his safe information . This proposal to increase the minimum wage (which the Prime Minister will announce tomorrow) is based on the fact that all the social partners agree to raise the minimum wage and this is also proposed by the research bodies. At the same time, account is taken of high inflation, which in 2023 was at 3.5% and 2024 is expected at around 2.7%. A particular role in the JEP proposal is played by increased inflation in emergency items and the highest inflation faced by the poorest households. The KEPE also takes into account: • The forecasts for the growth rate of the Greek economy for 2024 ranging from 2.2%. • The fact that wage increases create positive expectations. • The increase in the minimum wage is largely estimated to have been discounted and some of its effects on inflation have probably already taken place. • The previous increase in the minimum wage, although it contributed to the increase in unit labour costs, had no impact on the country’s competitiveness. To the extent that our main competitors give us higher or similar wage increases the same is expected to happen. Inflation in Greece, too, has been lower than in other European countries. • On the other hand, raising the minimum wage will also increase average wages, which are already pushed upwards due to specific constraints on the labour market. • While it will have a negative effect on employment, which can be seen as a slowdown in the creation of new jobs, as has been the case with previous increases, and which in this case can be strengthened by the low expected growth of 2024. • The relative minimum wage, as measured by the Kaitz index, is high and meets the European Directive. • Cumulative increases in minimum wages appear to have absorbed price increases. • The Commission proposal for experts proposing an increase of 3% – 3.5%. On the basis of the above, the JEP suggests that the increase in the minimum wage should cover at least the losses of purchasing power for 2024 and allow unit labour costs not to increase more than that of our competitors, so as not to lead to loss of competitiveness. An increase in the minimum wage and minimum wage from 4% to 5% is therefore proposed.