Thursday, December 16, 2010

Meet the Protestors

Athens is paralyzed this week by protests, chiefly from employees in state-owned enterprises (SOEs) and particularly those in transportation. People who shut down streets and who complain loudly – you should know these people, not personally of course but in aggregate. Here, then, are the employees in SOEs.

There are 52 SOEs in Greece and, in 1H 2010, they employed about 21,967 people or ~0.5% of all people employed in Greece (four companies did not report employee numbers). Of those, almost half work in two companies, ΕΘΕΛ and ΕΔΙΣΥ, the former being responsible for bus transport, the latter for maintaining the rail network. Add the next five largest companies and they make up 84% of the workforce in SOEs. (Here for some more info)

Since the size distribution is skewed, the government has focused its attention on the 11 largest loss making SOEs. In 2009, these companies generated total revenues of €1.5 billion. They lost, however, €1.7 billion, and their cumulative losses over time amounted to €13 billion. To put these numbers in context, remember that Greece’s 2010 deficit will reach around €22 billion – so annual losses of €1.7 billion make up almost 8% of the country’s annual fiscal deficit. 

SOEs suffer from two problems: too many people and too high a payroll. In 2008, the last year for which we have fully comparable data, the Ministry of Finance noted that employees in SOEs earned on average €38,287 a year versus just €19,147 in the private sector. Even relative to other public sector employees, SOE workers earned almost 50% more. More recent data on (a) the salaries of SOE employees in 1H 2010 and (b) the average hourly cost of labor for the whole country show that this trend has hardly changed since 2008.

These are averages, of course, and they mask significant differences between the SOEs. In ΗΣΑΠ (one of the two metros in Athens), the average salary is €56,554, which is equal and often more than what many of my classmates with advances degrees can expect to earn in the United States. On the low end, the €28.609 earned by employees of TEO (highway company), is still considerably above private sector wages.

Usefully the Ministry of Finance has also published the distribution of earnings. In a sample that covers around 70% of all employees, 10% earned over €48,000 while 17% earned from €39,000 to €48,000. Following that is the majority of the employees – 66% – from €19,000 to €39,000. So 93% of SOE employees earn more than the average private sector salary. Add to that the effective lifelong tenure (at least until recent legislation) of these employees, and these numbers are clearly unsustainable, especially given the poor state of services for the bulk of these SOEs.

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.