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The increase in salaries does not automatically increase prices and inflationary pressures, estimates the scientific associate of the Cyprus Labor Institute – PEO (INEK-PEO) Elias Ioakeimoglou, thus restoring the position of the Institute for the adoption of a new GDP growth strategy, driven by rising employee incomes.
Mr. Iokeimoglou spoke during yesterday's presentation of the INEK – PEO report on the economy and employment in 2021, which was made online, due to the restrictions due to the pandemic.
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In the context of the presentation of the report and responding to the argument for further increase of inflation in case of wage increase – a position that is often expressed by employers' organizations, justifying their request for abolition of the ATA – Mr. Iokimoglou stated that, among labor costs and prices, the profit margin is inserted. If there is room to cut profits, then wages can be raised without raising inflation, he said. According to a relevant announcement of the Institute, this year's report, starting from the fact of the deterioration of salaries (which is sufficiently documented by the report announced yesterday) and the need to prevent further devaluation of labor, brings back to the table for discussion the proposal worked out last year. INEK “for a new strategy of sustainable GDP growth, which presupposes public anti-recession economic and labor intervention to be directed in a direction where economic growth will be driven by increases in wage incomes, which is known internationally bibliography as wage-led growth ».
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