Cyprus wages rose 4.8% in Q2 despite recession

While the economy shrank in the second quarter, salary-earners continued to enjoy strong increases in wages, as the average salary rose by 4.8% over the year earlier in the second quarter of 2009 according to preliminary estimates of the Statistical Service Cystat.
Cystat reported that the average monthly earnings of employees during the second quarter of 2009 amounted to EUR 1,833 (males EUR 2,030 and females EUR 1,589).
Of course, the figures exclude “persons employed in private households”, who are predominantly low-paid women from Asia South and East Asia.
Moreover, the figures do not distinguish between the large salaries paid to the public sector, which accounts for around 20% of all employment in Cyprus, and the lower salaries paid in the private sector.
Cystat said that the increase mainly reflected the addition of the Cost of Living Allowance (C.O.L.A.) to the gross earnings of employees, which amounted to 2.28% in July 2008 and 2.15% in January 2009.
COLA is paid to unionised workers and has been heavily criticised by the IMF as reducing competitiveness.
In comparison with the first quarter of 2009 (seasonally adjusted data) there was an increase of 0.2% in the average monthly earnings of employees (males 0.2% and females 0.4%).
The corresponding increase observed during the second quarter of 2008 was 7.4% (unadjusted data) and 1.8% (seasonally adjusted data).
Cystat said this indicated that the rate of increase of the level of earnings in Cyprus is lower in 2009 compared to 2008 (2008 was a presidential election year).