Greece to raise minimum wage
The newly-formed leftist government in Greece will raise the minimum wage as part of their move away from austerity measures.
Labor Minister Panos Skourletis announced the plans on Sunday, alongside plans to reinstate collective bargaining in the workplace.
Greece’s minimum wage was cut from €751 a month to just €586 a month under the country’s bailout agreement in 2012. Since the recession, the nation has experienced greater levels of poverty and hardship than anywhere else in western Europe.
Skourletis said that he would discuss the wage plans with unions and employers before moving ahead, though many European ministers have already voiced their doubts over Greece’s plans to maintain public finances.
Several IZA World of Labor articles look at the wider effects of raising minimum wages. David Neumark highlights the negative effect that this can have on employment levels, as they can discourage employers from using low-wage and low-skill workers.
On the subject of trade unions, Alex Bryson looks at how wage bargaining has been shown to improve workers’ terms and conditions. However, he notes that if raised wages come at the expense of normal profits, overall firm prospects may be damaged.
Read more here.
Related articles:
Employment effects of minimum wages, by David Neumark
Union wage effects, by Alex Bryson
Do labor costs affect companies' demand for labor? by Daniel S. Hamermesh