Greece minimum wage purchasing power declines amid inflation

The real purchasing power of the minimum wage in Greece is facing significant pressure due to inflation and taxation. While the government has announced plans to raise the entry-level wage to 950 euros by spring 2027 and 1,000 euros shortly thereafter, these increases are offset by economic factors.

Adjusting for an intermediate inflation rate of 26.3%, the real value of the entry-level wage is estimated at approximately 678 euros. This figure is lower than the 2010 minimum wage when measured in terms of purchasing power. The erosion of wages is attributed to high horizontal taxation, indirect consumption taxes, and the prevalence of very small businesses that often employ unskilled or newly arrived workers.

Furthermore, Greek labor productivity remains low, at approximately 56% of the European average. For comparison, hourly wages in Greece stand at 38 euros, whereas Germany reports 76 euros and Denmark 140 euros. This productivity gap is linked to low specialization, a lack of retraining, and insufficient technological investment within small and individual enterprises.