In the name of “competitiveness,” now even Greeks working in the private sector are being pressured to accept wage cuts. (Reductions in public sector salaries and state-funded pensions are a foregone conclusion.) Competitiveness is jargon for reducing the prices of Greek goods and services, so that more of them can be sold. The assumption is that if Greek firms could pay their workers less, then firms could lower prices to match or beat those of imported goods, sell more of their wares, increase revenues, expand their enterprises by hiring more workers, pay more taxes, and generally create a free market utopia. To say it another way, Greece isn’t the entrepreneurial wonderland it ought to be because workers apparently get paid more than workers in other countries. So to increase competitiveness also means that Greek workers must vie with workers elsewhere producing similar goods and services. In such discussions, people like to cite tourism as the one industry where Greeks could increase competitiveness so they can outdo their counterparts in say Turkey, Italy, or Croatia, which all offer tourists a Mediterranean vacation. But the competition isn’t just regional; it’s global. So Greek waiters and hotel maids are ostensibly competing with waiters and maids in Vietnam and Mexico and every other place.
What’s not clear in this economic calculus is when exactly Greece, or any other country, is competitive enough. When are private-sector salaries low enough? When is the competition won? And who decides? The International Monetary Fund and the Hellenic Federation of Enterprises, long known as champions of social justice, have been the most vocal advocates of the wage cuts. Let’s leave it to them.