Gosh, John, I had no idea of the depth of your expertise in this matter! Still don’t, come to think of it, so, if you’ve got a minute…
[QUOTE=elucidator]
I am sure that we who sympathize with the Occupy movement appreciate your kindly condescension for our frailties.
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It was my pleasure, as always old boy! Anytime.
-XT
[quote=“CJJ, post:15, topic:612730”]
[li]Across the board wage cuts in the private sector averaging 22%. This includes cutting the minimum wage[/li][/QUOTE]
How, it there a government deal to cut private sector wages by 22%? Or, does “private sector” mean something else in Greece? Is this some kind of Union/Government type “private sector” deal?
New York Times:
"In a highly political climate ahead of elections expected as early as April, the leaders agreed to a range of unpopular measures, including cutting the minimum wage on which all private-sector contracts are based by 22 percent. . . "
So, they’re cutting the minimum wage by 22%. . . how many Greeks work for minimum wage? In the US, most average service workers make over the minimum wage. I’ve worked plenty of low-scale jobs and I’ve never worked for minimum wage.
"including cutting the minimum wage on which all private-sector contracts are based by 22 percent. . . "
Emphasis mine.
May be in Greece, it’s standard for contracts to to go something like “Salary: 3.5 times minimum wage”. In that case, lowering minimum wages impacts quite a lot of people.
No, but in Greece wages for many private sector jobs are apparently indexed to the minimum wage.
And it is not unique to Greece.
I actually work for a company in the US where our union workers all get raises when the minimum wage goes up. It’s called “decompression” and ensures that there is some differential between the lowest paid worker and the workers with some seniority, higher paid job classification, etc. This happens even if no employees are actually at the minimum wage before or after the increase. They don’t get a penny-for-penny increase exactly, but a good part of the increase does go to all the workers under the contracts.
Because collective bargaining in Greece takes place at the national, industrial, and specific-company levels, the minimum wage set in the national phase is often used as an index for other collective bargaining agreements at the industrial and company level (agreements which are re-negotiated more frequently than the national).
ETA: What TheMightyAtlas said
Yeah, they’re just whiners. Who wouldn’t see the wisdom in handing your country over to unelected technocrats who’s policies have just made the problem worse? Or appeasing rich foreigners who gasp and faint at the possibility that a small uptick in inflation will diminish their profits?
Greece bears a good bit of the blame for getting into this situation, but the solution is wholly biased in favor of outsiders–and this after Greeks have already endured two years of an austerity medicine that is killing the patient. Greece should default, quit the Euro and inflate their currency; it worked for Argentina and Iceland…
Apart from anything else, 150,000 public jobs have to go in 2 years - it’s just too high a price to pay to remain in the new German Empire.
Indeed. Always be wary of Greeks sharing grifts.
How did it work for Argentina? Inflation ran at 20%, Argentinian government assets were regularly seized by foreign bondholders (at one point the Swiss Supreme Court had to step in to stop the Argentinian central bank’s buildings in Switzerland from being seized), crime increased massively, the government tried instituting price controls to rein in the runaway prices causing mass shortages of goods, and the Argentinians have still not been able to return to the bond markets a decade after they defaulted. If Greece defaults then they are immediately kicked out of the Euro, and the EU along with it. Whatever exports they have now have no market. The second they reintroduce the Drachma there’s going to be a bloodbath. Food and fuel prices are going to go through the roof.
[QUOTE=CJJ*]
Yeah, they’re just whiners. Who wouldn’t see the wisdom in handing your country over to unelected technocrats who’s policies have just made the problem worse? Or appeasing rich foreigners who gasp and faint at the possibility that a small uptick in inflation will diminish their profits?
[/QUOTE]
Did I mention that they were ‘whiners’? I don’t see anything about that in what I wrote there, so I’m unsure who you are agreeing with.
As for the rest, it’s a pretty interesting spin on what’s going on, and sort of makes the point about reality verse perception.
shrug It’s biased in favor of reality. They are pretty much at the end of their tether wrt solvency, and they can’t borrow more. It sucks that they have had 2 years of austerity so far, and that there is no end in sight. I mean that…it DOES suck. Sadly, when you are broke and can’t borrow any more, you are broke and can’t borrow any more. You either have to figure out some way to generate new capital, or you need to cut back. I don’t see Greece being able to generate new revenue streams (do you?), so cutting back is pretty much their only viable option. You can’t just wish the problems away, and they can’t just bull through them by borrowing more to keep things going. Reality sucks.
-XT
Nobody screwed over Greece other than the Greeks. 6 out of 10 Greeks were tax invading, the black economy is 27% of the size of the visible economy, retirement ages were ridiculous with public servants retiring after having worked for a few decades, minimum wages even after the cuts announced this week are still higher than in Spain, the elected Greek government falsified their accounts to gain entry into the Euro and then went on a massive spending spree, there’s still a ridiculous level of militarisation in South Eastern Europe due to the bizarre rivalry that they have with Turkey, unions are out of control with unions preventing the government from collecting more tax revenue by simply refusing to implement required changes, and so on. In short public spending was way too high, tax receipts were not coming in, and all this in a country that doesn’t really produce much of anything other than sunshine and beaches. Something had to snap at somepoint.
I wouldn’t call the rivalry between the Greece and Turkey “bizarre”; after all, the Greeks and the Turks have been enemies since the Battle of Manzikert in 1071. Old countries have longer memories.
They’re both ostensibly allied as members of NATO, joining in the same year, and have been for 60 years.
Exactly! What’s 60 years compared to 10 centuries of hatred? As far as they’re concerned, all they’ve done is take a brief pause in the fighting.
But at the same time, Greek taxes were often quite onerous, such that people frequently needed to evade them just to get by. Meanwhile the countries regulations were so tight they choked off whole industries (I recall some private individual who needed 14 years to get approval to bottle tea, because he also operated a brewery.)
That said, I can sympathize with most of the parties in this transaction. The EU was a terrible idea, and a lot of people are going to get hurt off of it. AT this point, however, there’s no real solution other than to take the pain. That’s coming no matterwhat political decisions are made.
I think the consensus would be that they got what they voted for and it bit them in the ass.
The EU isn’t a terrible idea. Tethering widely divergent economies in Europe under a single currency was a terrible idea, and will impoverish more Europeans than anything since the Second World War.
What came first? The tax evasion or the onerous taxes?
[QUOTE=Capt. Ridley’s Shooting Party]
What came first? The tax evasion or the onerous taxes?
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Tax evasion is a long and honored tradition in Greece, but it’s a good question. I think they go hand in hand…there are onerous taxes, so folks try and evade them, so taxes have to be increased because of shortfalls, which means folks evade all the harder…rinse and repeat. It’s probably a chicken and egg scenario in this case.
-XT