Eurostat data places Greece second to last in purchasing power among EU countries, just ahead of Bulgaria. The OECD highlights that Greece had the slowest wage growth rate among its member states from 2012 to 2022, increasing only by 1.5% within that timeframe.
In numbers, the average annual salary in 2022 was €24,709, compared to €24,330 in 2012, marking a nominal increase of just €370 over a decade. Adjusting for inflation, this equates to a 5.9% decrease in real wages.
This period reflects the adverse impact of austerity measures, excluding the severe cuts from 2010-2011 and the effects of the inflation crisis.
Moreover, Greece has some of the highest social security contributions among OECD countries. Income tax averages slightly above 10%, but combined with employer and employee social security contributions, the total labor tax exceeds 45%. These high contributions reduce disposable income and discourage hiring.
To address these issues, the Greek government plans to reduce social security contributions by 1% in two equal installments: 0.5% in 2025 and another 0.5% in 2027. This move aims to ease the financial burden on employees and stimulate employment.
