The 13,6% decrease in hourly wage costs in Greece after the third quarter of 2009
Hmmm. Let’s improve upon the IMF and look at the facts – Greece already did. No country in Europe comes even close (graph), according to recent data from Eurostat. To no avail, alas, as employment is down 8,5%, compared with a year ago (and again, no country in Europe comes close). Considering a 7% rate of inflation between the third quarter of 2009 and the third quarter of 2011 as well as taking the decline of employment between 2009 and 2010 into account this means that purchasing power of total wages must have declined with about 30% in two years (which is consistent with the comparable decline of retail sales).
Technical niceties: as the EU hourly labor cost data published today for the fourth quarter of 2011 do not cover Greece this country is not shown in the Eurostat press-release graph, which therefore means that this graph does not show the, compared with the other EU countries, epic decline of Greek wages. Data for the third quarter of 2011 are however available. I decided to compare the percentage change of wages between the third quarter of 2009 and the third quarter of 2011. The difference with countries like Germany is a stunning 17% in two years. Mind that these are not contractual wages but (total wages plus other wage costs actually paid) divided by the total number of hours, which means that the data are influenced by changes in the structure of the economy. Mind also that Greece is a country with an unusually large number of self-employed.