Thanks for this post. Like Alexandros mentions, I find the drop in median very interesting and it does suggest a raise in wealth inequality. I haven't read the sources you reference with respect to that, just wanted to point that out.
Finally, a more "philosophical" question. Your post suggests that there is an improvement in the financial situation of Greek people. However, the Greek reality and day-to-day life, paint a different picture. How do you explain that? Is it just me, who thinks that people actually have a harder time getting by nowadays?
Thanks for your comment. This is a very good question. There are a few things to tackle separately here:
- Wealth vs income: these are separate but interconnected concepts. Data shows that wealth in Greece is in general closer to the EU median but unfortunately (real) income is still low. This means that people in Greece have pretty standard levels of wealth (usually in the form of property ownership) compared to other EU nationals, but much smaller salaries, on average.
- The Greek crisis depressed incomes to very low levels, especially for junior employees. Despite rising steadily, they are still lower than the majority of countries in the EU.
- Inflationary pressures in the post-COVID era (especially after the war in Ukraine) had been very strong and have eaten up a large portion of substantive income increases (both in the minimum wage and in the average salary). Greeks feel this very strongly whenever they purchase groceries and items that cover basic needs, which feel more expensive to them given the rise in inflation. This is an area where Greek citizens are right to feel angry about: many large supermarket chains and multinational conglomerates charge much higher prices in Greece vs other countries (low competition AND enforcement mechanisms) or partake in shrinkflation.
- Greece's growth in the past few years has been both real and substantive, and so has the gradual increase in the salary levels. However, for this to be meaningful for everyone, it needs to be more equitably shared across the population. So far, the largest gains had been concentrated in very specific sectors (i.e. tourism) and have not been diffused to all segments (i.e. salaried employees still feel punished due to high taxes and social security contributions that make their salaries lower).
Thanks. So in your opinion, are Greeks better off today, that they were before the financial crisis, or not? Averages are popular statistical measures, but give little to no insight when it comes to lower (economical) levels of our society.
I personally do not find such comparisons the most useful. Let me explain why: the Greek economy was leaving far beyond its means before the crisis (after years of fiscal profligacy) reaching an artificial top (due to decades of borrowing from its future). This is part of what led to Greece suffering the largest depression on record.
Greeks are better off today than they were since the beginning of the crisis, and have been progressively improving, so that's what matters to me. Is this perfect? Of course not. Can we do more? Certainly. What have we done well after the crisis and what can we improve? This is for me the most interesting question of all.
You are right, it was not a very fair question. I am just surprised by all the metrics showing the greek economy doing well, while the reality feels different.
You are correct: the median wealth levels have dropped, as I also allude to in the article, during the crisis. But wealth/income inequality has been reduced over time and poverty dynamics have improved over time.
Some relevant data:
- Relative median at-risk-of-poverty gap, population at risk of poverty, material and social deprivation have all been improving materially since 2015.
Thanks for this post. Like Alexandros mentions, I find the drop in median very interesting and it does suggest a raise in wealth inequality. I haven't read the sources you reference with respect to that, just wanted to point that out.
Finally, a more "philosophical" question. Your post suggests that there is an improvement in the financial situation of Greek people. However, the Greek reality and day-to-day life, paint a different picture. How do you explain that? Is it just me, who thinks that people actually have a harder time getting by nowadays?
Thanks for your comment. This is a very good question. There are a few things to tackle separately here:
- Wealth vs income: these are separate but interconnected concepts. Data shows that wealth in Greece is in general closer to the EU median but unfortunately (real) income is still low. This means that people in Greece have pretty standard levels of wealth (usually in the form of property ownership) compared to other EU nationals, but much smaller salaries, on average.
- The Greek crisis depressed incomes to very low levels, especially for junior employees. Despite rising steadily, they are still lower than the majority of countries in the EU.
- Inflationary pressures in the post-COVID era (especially after the war in Ukraine) had been very strong and have eaten up a large portion of substantive income increases (both in the minimum wage and in the average salary). Greeks feel this very strongly whenever they purchase groceries and items that cover basic needs, which feel more expensive to them given the rise in inflation. This is an area where Greek citizens are right to feel angry about: many large supermarket chains and multinational conglomerates charge much higher prices in Greece vs other countries (low competition AND enforcement mechanisms) or partake in shrinkflation.
- Greece's growth in the past few years has been both real and substantive, and so has the gradual increase in the salary levels. However, for this to be meaningful for everyone, it needs to be more equitably shared across the population. So far, the largest gains had been concentrated in very specific sectors (i.e. tourism) and have not been diffused to all segments (i.e. salaried employees still feel punished due to high taxes and social security contributions that make their salaries lower).
Thanks. So in your opinion, are Greeks better off today, that they were before the financial crisis, or not? Averages are popular statistical measures, but give little to no insight when it comes to lower (economical) levels of our society.
I personally do not find such comparisons the most useful. Let me explain why: the Greek economy was leaving far beyond its means before the crisis (after years of fiscal profligacy) reaching an artificial top (due to decades of borrowing from its future). This is part of what led to Greece suffering the largest depression on record.
Greeks are better off today than they were since the beginning of the crisis, and have been progressively improving, so that's what matters to me. Is this perfect? Of course not. Can we do more? Certainly. What have we done well after the crisis and what can we improve? This is for me the most interesting question of all.
You are right, it was not a very fair question. I am just surprised by all the metrics showing the greek economy doing well, while the reality feels different.
Hey Alex and thank you for your comment.
You are correct: the median wealth levels have dropped, as I also allude to in the article, during the crisis. But wealth/income inequality has been reduced over time and poverty dynamics have improved over time.
Some relevant data:
- Relative median at-risk-of-poverty gap, population at risk of poverty, material and social deprivation have all been improving materially since 2015.
https://greekanalyst.substack.com/i/121663950/is-greece-becoming-poorer
- Severe material & social deprivation rate going down consistently https://x.com/GreekAnalyst/status/1861436557435036027
- Greece is among the countries with the top reduction in child income poverty rate between 2014 and 2021. https://x.com/GreekAnalyst/status/1732330764782510455
- Greeks feel significantly poorer than they actually are https://x.com/GreekAnalyst/status/1860948467541057893