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Our View: CoLA should apply only to low earners

cost of living
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Unions refuse to accept defeat on the issue of CoLA. Having failed to force any change to the existing regime, which provides for an adjustment of wages at 50 per cent of the annual rise of the cost-of-living index, they have now modified their demands.

Before the presidential elections, all the big unions united in demanding the full restoration of CoLA from the start of 2023 – that is adjustment of wages based on the rise of the cost-of-living index. Labour minister at the time, Kyriakos Koushos, tried to find some compromise but the representatives of employers’ groups refused to play ball. In fact they demanded the complete scrapping of CoLA. A national two-hour strike was staged in protest and while there were threats of more industrial action, these never materialised.

Before the elections, President Nikos Christodoulides had promised to deal with the issue of CoLA if he were elected. This may be the main reason the Sek union federation publicly supported his candidacy. Now it expects the government to deliver and the new labour minister, Yiannis Panayiotou, has been considering what to do. The reality is that there is no room for compromise given that employers’ groups insist they would not accept “anything that increases the costs for the employer.”

On Tuesday after a meeting of the Sek general council, its general secretary Andreas Matsas announced the union did not give up its objective of full restoration of CoLA, even if this was achieved in stages. Although he did not say what was acceptable, press reports indicated that unions would be happy with a 60-65 per cent CoLA for this year. The government has stayed mum, refusing to be dragged into a dispute for which a compromise requires the consent of employers who are not budging from their position. There is also concern about the increase in the public payroll – full restoration of CoLA would increase it by more than €100 million.

The unions need to change tack, if their priority is to help workers who are having trouble coping with rising prices. They should propose a ‘progressive’ CoLA that is granted to people earning a gross monthly wage up to €1,500. This would strengthen their argument about CoLA helping people cope with the rising cost of living. The fat cats of the public sector and semi-governmental organisations on three, four, five or six thousand euros a month plus automatic annual pay increases, should not be eligible to any CoLA.

Not only would this save the taxpayer a significant amount of money and help those genuinely in need, but it would also curtail the inflationary effect of the measure.

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