Sunday, January 9, 2011

Harmonization of Salaries and Pensions in the Eurozone!

I originally come from one country of the Euro-zone and I am living in another! My family still lives in Greece, while I am making my living in Ireland. Every time I visit home, we discuss with my friends and family how each of us we make ends meet financially.

One thing that I realize is how most things cost about the same in the Euro-zone. Of course you will say, that is one of the main reasons we do have the euro and one of its benefits. Yes, but then why our salaries are so different?

While Greece's minimum wage before the crisis reached about 700 € and now it got to just under the 600 €, Ireland's minimum wage still hovers around 1200 €. But if you go to any supermarket or a department store, the prices of the goods do not differ much.

A few differences exist of course: to rent or buy a property in Ireland costs up to three or more times the cost of one apartment in Greece (in the Irish case it was the property boom that led to those prices, and we all now realize that economies like these are not worth having; few people benefit, most lose and end up paying for the winners), transportation and tobacco prices are also considerably higher.

How can people in Greece have a decent living if you think about it, when they earn less than half of what their Irish fellow Europeans earn, but the prices of food, clothing and other necessary goods are the same?

The difference in the rents can not justify such unequal reality. If a Greek family earns between the two parents around 1500 € on average, they will have to spend at least 500€ for their rent. While in Ireland a family will earn on average around 3000€ between the two parents while the rent will cost them around half of that. In other words a family in Ireland has at least 500€ more to spend on the basic goods, with only the price of tobacco, petrol and transportation being more expensive.

And this is not just between Greece and Ireland. I have traveled in many European countries, mainly in the Euro-zone and the prices do not differ much; the wages though do. How can anyone justify that Europeans must be paid differently for doing exactly the same job? The labor of one EU citizen is valued half of what another EU citizen is earning!

Why should an Irish person that works in a check out in a super market earn more than a Greek, and a Greek more than a Romanian? Since we have the same currency and a common market, common prices for most goods why do we still have unequal wages? And not just the wages but our pensions too! An Irish pensioner is earning more than 800 € per month, while a pensioner in Greece about 400 € on average.

Different economies you will say of course, make a necessity such inequality. Each country controls its taxes, fiscal policies, wages etc. But what if we had one common European economy? Besides isn't the differences in our economies that make the existence of the Euro more complicated? We see that it creates problems that when manipulated by some groups of organizations, can create situations like the crisis we are now dealing with.

Europe has one currency, one market perhaps we should start thinking about harmonization of our salaries as well. Why create such inequality in our working force? Imagine if Poland had the Euro and the Polish workers earned as much in Poland as in Ireland, why would they migrate en-mass?

Immigration within the EU would be for reasons like learning another language, acquiring new skills, studying, experiencing a new lifestyle and widening your horizons, or simply just for fun!

But perhaps our business and political elites need those inequalities so they can always find a cheap labor force. If an Irish man won't do the job for less, perhaps a Polish or a Romanian will! We are segregating Europe in a two-tier continent with half of it being rich while the other half poor.

The needs of the rich part would be always fulfilled by the cheaper labor of the poorer. Is that the "united" Europe that we want to create? With the expansion of the Euro-zone perhaps we should be putting the bases for salary and pension harmonization that will eventually take place in all Euro-zone members.

The people would welcome such move. The goods that we need are getting more and more expensive with the Euro anyway, how come we can share a currency with Germany but not the German wages? How come we can pay the same for a bottle of milk but not earn the same?

We have a common and free market but some nations are being forced into having less to spend, while others are given more. If Greece has lower wages shouldn't the Greeks pay lower prices as well? Then the German tourists would really find things cheaper in their holidays, but to their surprise Greece is a very expensive country.

In that way the Greeks are losing out twice: not just by not earning the same as the Germans and not having the same to spend and travel as much as them, but losing out in tourism as well as the Germans prefer to go to Tunisia or other cheaper holiday destinations. So why is Greece in the Euro-zone in the first place?

If we make the sacrifice of not being able to devalue our currency and attract tourism, then shouldn't we be given equal wages with other Europeans and similar economies to them? Industrialization and technology, invest in research in fields like green energy and agriculture is what we need and would help us achieve this goal. Why are we given half the benefits of EU and Euro membership?

If you think that is fair to be paid half of a person in a nearby country for doing the same job, and while belonging to the same "European family", same market and using the same currency then perhaps we should stick with this situation.

But imagine if everyone in Europe had the same opportunity in prosperity, progress and development, same salaries and money to spent, was paying the same prices for the same goods; wouldn't that mean equality and all the things that EU is boasting for? I personally do not want to be a second class EU citizen.