Labor productivity in Greece is around a third lower than the average of its fellow Organization for Economic Cooperation and Development (OECD) member states, the consortium said last week.
Labor Productivity in Greece
The special chapter of its annual Economic Outlook report, focused on Greece, is worrisome. Not only is productivity low, but it has sunk slightly in recent years. Additionally, Greece ranks last in terms of productivity levels among European OECD members and fourth from bottom among OECD member states overall.
Labor productivity, as calculated in gross domestic product per hour of work was $34.5 in Greece in 2022, compared with $53.8 in the OECD, which is just 64.1 percent of the average.
Relative to the eurozone, where productivity is $60.8, Greek productivity is just over half, while in the European Union (EU) productivity is $55.7. This places Greece last among the European countries and fourth from the bottom among OECD member states. Only Mexico, Colombia, and Chile are in lower positions.
In 2022 labor productivity in Greece increased. However, overall in the period from 2015 to 2022, it saw a slight decrease. In contrast, the OECD states as a whole are 6.76 percent higher than in 2015, and the EU by 4.68 percent.
The OECD notes that labor productivity only partially reflects workers’ personal abilities or effort intensity. The index is highly dependent on the presence and use of other inputs, such as capital, technology, organizational changes, and economies of scale.
As highlighted last year by the Greek Productivity Council of the Center of Planning and Economic Research (KEPE), “key conditions for the realization of the expected growth potential of the Greek economy is, on the one hand, the increase in the utilization of the workforce, and, on the other hand, the significant increase in fixed capital investment.”
Minimum Wage in Greece
New data has also shown that the proportion of workers earning just the minimum wage is higher than 10 percent in several countries across Europe. This year marks an important step towards the improvement of working and living conditions in the EU member states because the EU’s minimum wage directive has to come into law by November 15.
The minimum wage is below 1000 euros in 14 out of the 22 member states where there is a national minimum wage. The figures range from 360 euros in North Macedonia to 613 euros in Turkey among the candidate and potential candidate countries.
As of January 2024, the gross monthly minimum wage in Greece is 910 euros. However, it is generally agreed that the purchasing power standard (PPS) provides a fairer outlook. PPS is a Eurostat-defined “artificial currency unit” based on price level differences between countries. One unit of PPS can theoretically buy the same amount of goods and services in each country.
The monthly minimum wage in purchasing power standards in Greece as of January 2024 is 1031, which places the country just under the halfway point of the OECD average.