Economic growth fails lower-paid workers, union warns

More than 188,000 employees in Cyprus earn less than €1,500 a month, trade union PEO said on Tuesday, arguing that the country’s economic growth has done too little to improve the finances of ordinary workers.

The figure, equivalent to more than one in three salaried employees, has sharpened the union’s demands for higher wages, shorter working hours and stronger protection against rising living costs, with a fresh round of collective bargaining approaching in 2027.

PEO said the growing cost of housing, everyday essentials and other household expenses was leaving many workers struggling financially, despite the increase in wealth generated by the economy.

The union’s position follows a meeting of its general council on Monday, which reviewed this year’s collective bargaining results and set out its priorities for the next round of negotiations.

So far, 174 collective agreements covering 104,183 employees have been renewed, securing average increases of more than 3 per cent in wages and other benefits, on top of the automatic cost-of-living adjustment (CoLA).

Those agreements have also delivered improvements beyond pay, including shorter working weeks in sectors where employees previously worked more than 38 hours, higher contributions to provident funds and better compensation for parental and paternity leave.

PEO considers the results encouraging, although it believes the improvements are insufficient to address the financial pressures facing lower-paid households.

The next challenge, therefore, will be to secure further increases in basic pay, particularly for those at the bottom of the wage scale.

A central demand for 2027 is the introduction of a 38-hour working week across the board, without any loss of earnings, together with higher starting salaries and better pension-related benefits through provident funds.

The union also wants stronger collective bargaining arrangements, with sector-wide agreements carrying greater legal weight and employers required to honour agreed minimum wages and employment conditions.

This would be accompanied by tighter enforcement, particularly where collective agreements are breached, and wider trade union representation.

Meanwhile, PEO is seeking changes to the rules governing the employment of workers from countries outside the EU. Under its proposals, work permits would be linked more closely to employers’ compliance with collective agreements, backed by effective inspections.

Family benefits also feature prominently in the demands, with the union pressing for full financial compensation during maternity, paternity, parental and carers’ leave, alongside improvements to welfare and provident funds.

But the dispute over wages extends beyond collective agreements. With negotiations on the next national minimum wage due to begin in 2027, PEO intends to push for a substantial increase that takes account of the cost of living.

It has also called on the government to fulfil its commitment to express the minimum wage as an hourly rate, an issue the union wants addressed without further delay.

The wider concern is that wage increases are failing to keep pace with the expenses facing households, particularly those paying high rents or mortgages.

Housing, consequently, forms an important part of PEO’s proposals. The union wants more social and affordable homes, supported by a rental subsidy scheme aimed at households meeting specific income and social criteria.

On energy costs, it is calling for a permanent cut in VAT on electricity and an end to double taxation on fuel.

It also wants higher social benefits, including the Guaranteed Minimum Income (GMI), together with targeted assistance for pensioners, vulnerable households and low earners struggling with heating bills.

PEO believes additional public support should be accompanied by changes to taxation, including measures aimed at large fortunes and excess profits.

Healthcare is another priority, with the union seeking improvements to the General Healthcare System (Gesy) and public hospitals to ensure better access to medical services.

The general council also examined pension reform, which remains part of the broader debate over workers’ long-term financial security.