This will be a short post looking into Greek household income trends based on Ameco data: Greek household income

Household income is broken into main sources, mainly gross wages and salaries, current transfers received and net property income. These sources do not include income of self-employed persons and should mainly be used to examine the income flows of wage earners/pensioners.

Looking into nominal figures, current transfers during 2013 will be back to 2007 levels while wages to 2003 levels. Only net property income appears as a stabilizing factor. Taking into account the more than threefold increase in the unemployment rate since 2007-2008, the fall in wages is easily justified by the loss of employment as well as the implemented drops in legislated wages (both in the public and private sector). What appears quite out of line is the drop in current transfers which should be attributed to austerity measures, heavily tilted on pensions and unemployment benefits.

Net annual changes clearly show why the 2009 recession was rather thin as well as the magnitude of income losses since 2010. Gross income stands for the sum of current transfers, gross wages and salaries and net property income. Both wages and current transfers are expected to take a severe hit during 2013 while the increase of net property income will be much lower. The drop of more than €9bn in gross income during 2013 (4.6% of 2012 GDP) is another element pointing to the fact that the projected 2013 recession figures (around -4.5%) are quite optimistic.

Regarding % of gross disposable income, all elements show clear stationary characteristics. Current transfers are quite elevated due to the deep recession while wages are quite far from their mean (37% during 2000 – 2007 compared to 33% for 2012 onwards. Personally, I am not so sure how the Greek economy can return to a growth path without the wage share returning to its previous mean.