The site bankar.me dealt with the low wages and the small purchasing power of the Balkans and especially of Greece. The website dealing with finance in Montenegro reported about Greece, regarding the recent survey:
"Taking into account the Purchasing Power Standard (PPS), the gap in average annual full-time wages across the EU is smaller than in nominal terms." Estimate according to a Euronews survey.
Have you ever wondered which ones? countries do they pay better in Europe? There are various indicators for comparing salaries and wages. Eurostat's new calculation, the average annual adjusted full-time wage per employee, stands out as particularly useful. It is calculated from the average annual gross earnings for a full-time job.
According to Eurostat, in 2023, the average annual adjusted wage per full-time worker had differences.
It ranged from €13.503 in Bulgaria to €81.064 in Luxembourg. The average in the EU is 37.863 euros.
Nine Member States reported wages above the EU average. Instead 17 countries were below him. The Netherlands is not included in the data due to differences in methodology.
Apart from Luxembourg, the average salary exceeded €50.000 in five other countries. These are: Denmark (67.604 euros), Ireland (58.679 euros), Belgium (57.989 euros), Austria (54.508 euros) and Germany (50.988 euros).
India, Sweden and France also rank above the EU average.
At the bottom, Bulgaria is followed by Hungary (16.895 euros), Greece (17.013 euros), Romania (17.739 euros), Poland (18.054 euros) and Slovakia (19.001 euros).
The annual salaries of these countries did not exceed 20.000 euros. Italy and Spain are below the EU average, with annual wages of around €32.500.
How do the differences change when adjusted for purchasing power standards?
Average wages at purchasing power level (PPS) allow a fairer comparison, as the cost of living, especially the cost of housing, varies significantly across European countries.
Purchasing power parity (PPP) eliminates the impact of price differences between countries. PPS is an “artificial currency”, where a unit PPS can theoretically buy the same amount of goods and services in each country.
When analyzing the average full-time annual wage adjusted by PPS worker, the differences are much smaller compared to the nominal amounts.
However, significant differences remain across the EU. For example, in nominal terms, the highest average wage was six times the lowest. This ratio dropped to 2,5 times when adjusted for PPP (Purchasing Power Equivalent Units).
Greece is in the lowest position
The average annual full-time salary adjusted per employee, measured in PPS, ranged from €20.525 in Greece to €53.745 in Luxembourg.
In nominal terms, Greece was third from the bottom of the table, but had the worst result in PPS.
Of the seven countries that had a salary above the EU average, apart from Luxembourg, Belgium, Denmark, Germany and Austria had salaries above PPS 45.000.
Ireland and France were the other two countries above the EU average, with average wages of €41.581 and €39.110 respectively.
Italy had the lowest wage among the EU's 'big four', at 33.723 MAD, while Spain recorded a slightly higher figure of 35.774 MAD, both below the EU average.
How have average salaries changed since 2022 at 2023?
Among the 26 EU countries, the average annual full-time wage adjusted per employee fell only in Sweden between 2022 and 2023.
In Sweden, the average salary fell by 1.817 euros, representing a 4% drop.
However, this drop is due to the conversion of the Swedish krona to the euro. In local currency, wages rose slightly. In the EU, wages increased by 2.225 euros or 6%.
In nominal terms, Luxembourg, Belgium and Ireland saw the biggest increases, each by more than €4.000. Average wages in Malta, Greece and Italy rose by less than €1.000.
Looking at percentage changes, Romania, Hungary, Poland, Latvia and Croatia saw the biggest increases. There they saw wages increase by more than 15%.
In contrast, increases were below 5% in Malta, Italy, Greece, Denmark, Finland and Cyprus.
Sufficient salary for a decent life in the EU
Eurostat started calculating "average annual wages per full-time worker" after the adoption of the Blue Card Directive in 2021.
This indicator serves as a threshold for granting work permits to highly skilled workers at the national level.
According to Eurostat metadata: "In practice, this indicator represents a salary sufficient for a decent life in the Member State."
The wage is adjusted by converting part-time wages to full-time gross equivalent. Part-time work is still an important trend in Europe.
In 2023, 17% of workers in the EU age20 to 64-year-olds worked part-time according to Eurostat. This percentage was even higher in some countries, such as Germany with 29 percent and the Netherlands with 39 percent."
It is important to note that when wages are adjusted for purchasing power (PPS), differences between countries are reduced.
But they remain important. For example, the highest wage is six times the lowest in nominal terms.
But it is only 2,5 times larger when adjusted for purchasing power.
Overall, Western and Northern European countries tend to offer higher average wages compared to those in Eastern and Southern Europe.
A trend that reflects differences in economic development and living standards.
