One in four workers are on low wages, a research institute affiliated with the left-leaning Peo union said on Tuesday outlining how income distribution has tilted away from salaried employees in recent years.

The main findings of the latest report by the Cyprus Institute of Labour, established in 2002, were presented.

Peo head Sotiroulla Charalambous warned of a “precariousness trap” for wage earners unless trade unions and the state step in to ameliorate the situation.

The report found that during 2023 to 2024 increases in nominal wages outweighed the inflationary trends that began in the wake of the Covid-19 pandemic.

This, Charalambous said, was the result of trade unions’ tireless efforts to boost people’s real wages.

On the flipside, the rise in nominal wages did not offset the redistribution of income away from the working classes.

Meanwhile, businesses’ profitability – expressed as return on equity – is 70 per cent higher than 2010 levels.

“Only about half of the labour cost reductions translated into more competitive product pricing,” the trade union boss said.

The unit labour cost, in current prices, is only slightly up – 6 per cent compared to 2010. But in other countries, like Spain and Portugal, the rise in the unit labour cost ranges from 20 to 25 per cent.

Charalambous spoke of “capitalists’ efforts to make their profits permanent, the profits they reaped during the economic crisis via the devaluation of labour, wage and benefits cuts, the expansion of unregulated work and the increase of those facing job insecurity”.

She said that “capital” is reluctant to invest its profits productively. It is only thanks to extra work hours that growth has been achieved.

Charalambous went on to call for a “model decree” regulating minimum wage – one that would create a safety net for the vulnerable sections of the working population.

“The government must assume its responsibilities toward salaried employees, bringing back a balance in labour relations with measures that combat unfair competition among employers in the same sector.”

And she vowed that Peo would continue “the fight with all means necessary, because this concerns both the present and the future of salaried employees”.

The report found that although income redistribution after the Covid pandemic was to the detriment of labourers, this trend slowed down and was even partially reversed during 2023 to 2024.