No positive impact from cutting minimum wage in Greece, 'Der Spiegel' reports

21:59 7/7/2014 - Πηγή: E-Typos

Reducing the minimum wage did not bring any practical benefits in Greece, according to an article appearing in the German magazine "Der Spiegel" on Monday.
In an article prompted by the introduction of a minimum wage of 8.50 euros an hour in Germany from the start of 2015, the magazine noted that cutting the minimum wage had no positive impact on employment levels in Greece, where unemployment increased from 25 pct

to 28 pct after the minimum wage was cut in 2012, though it was now predicted to ease off to 25 or 26 pct by the end of the year.
On the contrary, the cut in wages from 751.39 euros a month to 586.08 euros a month caused a further slump in consumption that forced many retailers and medium-sized businesses to close. The even lower minimum wage for young people under 25 - at 510.94 euros a month - similarly had little impact on a youth unemployment rate running at 58 pct in Greece, the report said.
The Der Spiegel report also highlighted other problems, such as the fact that unemployment benefit was only paid for one year in Greece or the lack of effective regulation of compliance with the minimum wage law. As a result, many Greeks ended up working for only part of the legal minimum wage while others were listed as part-time employees but forced to work full-time for part-time salaries, it said.