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Greed, not wages, responsible for problems in the economy, Sek says

The myth that wages and the cost of living allowance Cola, are to blame for all the problems in the economy are misleading, Sek union said on Wednesday.

According to the union, the problems in the economy derive from low productivity, corruption, lack of competition, wasteful state machinery, tax evasion, and also from the slow administration of justice.

“So those who really care about the progress of the Cypriot economy would do well to focus on correcting these issues and leave labour costs out of it,” Sek said in a statement.

In fact, it said, according to the statistical service, between 2011 to 2018, earnings per capita as a percentage of GDP have been steadily declining while business profits continued to rise.

Employee earnings as a percentage of GDP was 48.1 per cent in 2011 and decreased to 43.4 per cent in 2018, it said. During the same period, the business surplus increased from 18.5 per cent of GDP to 23.3 per cent in the same period.

The union said this was fully in line with what the European Commission identified since 2015… high profit margins for Cypriot businesses as a result of wage reductions.

According to the Sek, it could be safely concluded that employees “in recent years through their sacrifice of wages and benefits have supported in the midst of the financial crisis Cypriot businesses and contributed to their liquidity, something the banking sector couldn’t do.”

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