Fears of “haircut” wages in the private sector


Private sector wages are among the most sensitive issues left by the coronation crisis. The question is whether thousands of workers in sensitive sectors of the economy will see their wages maintained at 2019 levels or there will be a small or large “haircut” due to the conditions of the economy and business.

In addition to the “haircut” of wages, there is also the fear of unemployment. Hundreds of workers are worried about their salaries and whether they will have a job or continue on the same terms. As the economy slowly returns to normalcy, tens of thousands of workers are returning to work. The next day, after the lifting of the restrictive measures and the attempt to restart the economy, is accompanied by changes in labor relations. There is the issue of companies participating in employee support plans and they are valid with the current data until June 12.

That means they won’t be able to lay off staff until October. This does not preclude the passage of redundancies, especially in sectors with very low turnover. In the market, another step is being taken in a work model where there will be no agreed full-time working hours, but the scale of employees’ employment will depend on the needs of the business and the economic situation.

In the most difficult situation of all employees are about 15 thousand hotel employees, as some of the hotels are expected to remain closed for the rest of the year, but it is not clear whether the state subsidy received by hotel industry employees will be able to continue. . 

Not all private sector workers seem to enjoy the average wages of the previous year, as the “scissor” has begun. Problems with private sector wages began in 2013 with the adjustment memorandum and gradually began to recover. However, the private sector, workers and entrepreneurs, received the gratuitous shot with the economic impact of the health crisis. The government is trying to stimulate business with liquidity measures, reminding that jobs must be preserved. Primarily, hotels, restaurants, retail, are at the forefront of the sectors of the economy that are affected. The government’s liquidity package is a safety net to help businesses deal with the crisis effectively.

The trade unionists have received complaints

The issue is what will happen the next day and when there will be no insurance valve from the state, until October, no redundancies will be made by companies that took part in state support programs. According to information from “F”, trade unions are starting to arrive and complain to workers about wage reductions and layoffs. SEC Secretary General Andreas Matsas said that the labor market seems to be creating problems due to arbitrary interventions in employee benefits. We are receiving complaints to the union, he added, that there are salary reductions from 15% to 40%, time differentiation and in some cases instead of five days there is four days of work. An additional dialogue with the Minister of Labor has begun, he explained,

Mr. Matsas added that it is more helpful to prevent unilateral interventions, to secure wage rights and to make moves that will contribute to the non-expansion of unemployment. Describing the work environment, PEO General Secretary Pambi Kyritsis said that we expect that there will be pressure on labor rights and wages. Employers added they will try to push for wage cuts and violate workers’ rights.

As the president of DEOK, Iosif Anastasiou, told “F”, some companies from the trade and food industry start and inform the staff that they will reduce the staff after October and will not avoid the reduction of salaries. Private sector workers added that they are going through a difficult period and salaries have not been restored since 2013. The labor market, as he pointed out, needs no further deregulation. What is needed added is respect for labor rights and decent wages for workers.

Last year’s fees

Indicatively, it is reported that last year the average monthly salary related to the accommodation and catering services sector was € 1,251. The average monthly salary for the transport and storage sector is € 2,242. For land transport and transport through pipelines the average monthly earnings € 1,581, for floating transport € 2,473, for air transport € 3,046, for storage and transport support activities are € 2,529 and for postal activities840 1. € and courier .

In contrast, the lowest paid occupations are in the primary sector, such as agriculture. The monthly salaries for professions related to plant and animal production, hunting and related activities are only € 824 while for forestry € 1087.

A little more € 1,105 is received by those involved in service activities in buildings and outdoor areas and the manufacture of clothing. The government with differentiated plans has provided support to 220 thousand workers whose work is in full or partial suspension, as well as to 31 thousand self-employed workers. 

The parties do not touch the state payroll

The parties do not in any way want to disrupt the state payroll in the midst of the health crisis and do not adopt, at least at this stage, proposals or voices of organizations to cut wages, benefits or pensions to reduce labor costs in the public sector. Most of the parties are demanding and calling on the government to save on operating expenses of the public and wider public sector, instead of reducing wages, in order to give, they say, a temporary boost to the budget.

The impact on employment is a global phenomenon

Employees’ earnings in six EU countries, including Cyprus, are lower than average ten years ago, while in three other EU countries wages have almost frozen over the past decade, according to data released by ETUC, the European Trade Union Confederation. The global impact of the pandemic on employment is enormous. The International Labor Organization (ILO) estimates that in the second quarter of 2020, the loss of working hours will reach 10.5%, equivalent to 305 million full-time jobs. Things are even worse for the 1.6 billion people in the informal economy, 60% of whom are expected to have declining incomes.