Overall increase in wages but women still earn less than men
Published: 21 October 2007
This report analyses the main results from national labour statistics for 2004 and from a survey conducted by the Cyprus Labour Institute (INEK) in 2005. Labour statistics 2004 outlines the general situation of workers and the workplace in Cyprus, and covers topics such as pay rates, working hours and occupational accidents. The study finds a persistent gender pay gap in the Cypriot labour market. The INEK survey examines job insecurity among young people and offers policy recommendations aimed at improving their situation.
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This report analyses the main results from national labour statistics for 2004 and from a survey conducted by the Cyprus Labour Institute (INEK) in 2005. Labour statistics 2004 outlines the general situation of workers and the workplace in Cyprus, and covers topics such as pay rates, working hours and occupational accidents. The study finds a persistent gender pay gap in the Cypriot labour market. The INEK survey examines job insecurity among young people and offers policy recommendations aimed at improving their situation.
Introduction
This survey data report on working conditions in Cyprus is based on findings from Labour statistics 2004 and also on a survey conducted by the Cyprus Labour Institute (Ινστιτούτο Εργασίας Κύπρου, INEK) entitled Unemployment, underemployment and flexible employment: Uncertainty and insecurity of young people in Cyprus.
The Statistical Service of Cyprus (Στατιστική Υπηρεσία της Κυπριακής Δημοκρατίας, CYSTAT) has published labour statistics each year since 1982. The annual review presents data on a wide range of topics, namely: employment and unemployment; vacancies and job placements; public sector employees; foreign workers; social insurance statistics; labour disputes; occupational accidents; wages and salaries; the consumer price index and cost-of-living allowance.
Among the issues covered in Labour statistics 2004 were the following: pay rates and earnings distribution; differences in earnings by occupation and sex; working hours; and occupational accidents. This report provides a brief analysis of these elements from the 2004 data.
During 2004–2005, INEK conducted a survey on the extent of employment insecurity among young people. The study examines the types of job insecurity that they experience and the reasons behind this trend; in addition, the INEK report proposes policy guidelines to combat the problem.
Methodology of surveys
CYSTAT survey
The purpose of Labour statistics 2004 was to determine the structure and variations in rates of pay, earnings and working hours of employees, by occupation, sector and sex, in all sectors of the economy in Cyprus.
The labour statistics survey is conducted each year on the basis of a sample taken from the Registration of Establishments, which is held every four to five years. The survey sample is then updated with data from the Employment Survey and other sources, to take into account changes in the structure of employment by sector, occupation and size of establishment. The 2004 survey covered 80,000 employees, that is, about 27% of the total gainfully employed population or about 33% of all employees (excluding self-employed people and unpaid family workers) in all sectors of the economy.
The survey was conducted by offficials of CYSTAT, who visited all the companies included in the sample. The employees of each company, including full-time and part-time staff, were asked to complete a multiple choice questionnaire related to their working hours, and their earnings and allowances. The data refer to the week of 11–17 October 2004 for wage earners and to the month of October 2004 for salary earners.
INEK survey
The INEK survey Unemployment, underemployment and flexible employment: Uncertainty and insecurity of young people in Cyprus consists of two parts: Part A includes research in 2004 and Part B covers 2005. The survey investigates levels of employment insecurity among young people due to unemployment, type of working conditions, the working environment and the general status of young people in Cypriot society.
To ensure a comprehensive assessment of employment insecurity for young people, the survey took into account primary and secondary sources and quantitative as well as qualitative data. It used the following methods: comparative analysis of statistical data and socioeconomic indicators; comparative analysis of institutional regimes and employment policies; focus questionnaires and focus groups of young people.
Rates of pay and earnings
According to Labour statistics 2004, wages and salaries in nominal terms rose by 4.2% in 2004, compared with 6.2% in the previous year. Pay increases were recorded in all sectors of the economy, ranging from 3.1% in the public sector to 5.6% in financial services.
In real terms – after allowing for inflation, as measured by the consumer price index – the increase in rates of pay was 1.9%. Actual earnings, including overtime earnings, rose by 4.3% in 2004, compared with 6.3% in the previous year, while in real terms they grew by 1.9%, compared to 2% in 2003.
Over the last 10 years, employees in the financial services sector have received the biggest increase in real earnings, at 52.1% on average. During the same period, those employed in the agricultural sector have received the lowest pay rises, at 20.4% on average. Figure 1 shows the earnings index by sector from 1980 to 2004. A steady increase may be seen in agriculture, manufacturing, construction, financial services and the public sector.
Figure 1: Earnings index in real terms, by sector, 1980–2004
Source: CYSTAT, Labour statistics 2004, 2005
Earnings index in real terms, by sector, 1980–2004
Distribution of rates of pay
In 2004, the lowest paid quartile of the employees surveyed received less than €987 (CY £573, as at 17 January 2007) a month, while the highest paid quartile received more than €2,056 (CY £1,193) (Table 1). The corresponding figures for 2003 were €972 (CY £564) for the lower quartile and €1,979 (CY £1,148) for the upper quartile. In 2004, the median salary, which reflects the midpoint between the lower paid half of the employees and the higher paid half, increased to €1,386 (CY £804) from €1,334 (CY £774) in 2003. Table 1 provides the main summary indicators of the distribution of pay rates for the eight years between 1997 and 2004.
| Type of average | 1997 | 1998 | 1999 | 2000 | 2001 | 2002 | 2003 | 2004 |
|---|---|---|---|---|---|---|---|---|
| Mean | €1,220 £708 | €1,268 £736 | €1,329 £771 | €1,424 £826 | €1,496 £868 | €1,572 £912 | €1,668 £968 | €1,737 £1,008 |
| - Men | €1,374 £797 | €1,417 £822 | €1,482 £860 | €1,586 £920 | €1,667 £967 | €1,744 £1,012 | €1,853 £1,075 | €1,929 £1,119 |
| - Women | €1,005 £583 | €1,053 £611 | €1,087 £631 | €1,175 £682 | €1,236 £717 | €1,306 £758 | €1,386 £804 | €1,444 £838 |
| Median | €1,032 £599 | €1,058 £614 | €1,101 £639 | €1,193 £692 | €1,256 £729 | €1,282 £744 | €1,334 £774 | €1,386 £804 |
| - Men | €1,165 £676 | €1,193 £692 | €1,236 £717 | €1,324 £768 | €1,413 £820 | €1,431 £830 | €1,510 £876 | €1,560 £905 |
| - Women | €832 £483 | €855 £496 | €875 £508 | €958 £556 | €1,044 £606 | €1,053 £611 | €1,101 £639 | €1,150 £667 |
| Lower quartile | €753 £437 | €782 £454 | €796 £462 | €874 £507 | €912 £529 | €939 £545 | €972 £564 | €987 £573 |
| Upper quartile | €1,453 £843 | €1,496 £868 | €1,546 £897 | €1,681 £975 | €1,818 £1,055 | €1,877 £1,089 | €1,979 £1,148 | €2,056 £1,193 |
Note: Average rates of pay are indicative and include newcomers to the labour market, who may be expected to have lower than average rates of pay. Data refer to October of each year. CY £ to € conversion as at 17 January 2007.
Source: CYSTAT, 2005
Gender pay gap
In Cyprus, a variety of pay rates apply, mainly due to the range of occupations, work positions, individual qualifications and also the sex of the employees. According to Labour statistics 2004 and using the International Standard Classification of Occupations (ISCO), the highest occupational group – legislators, senior officials and managers – received the highest rates of pay, followed by professionals, and technicians and associate professionals; workers in unskilled occupations received the least pay. On average, women still receive lower salaries than their male counterparts in the major occupational groups. In 2004, men received 33.5% higher rates of pay than women did, compared to 33.7% in the previous year.
The gender pay gap is narrower for legislators, senior officials and managers, and is widest among machine operators and service and sales workers. These differences are attributable to differences in qualifications, years of service, duties and sector of activity as well as possible discrimination in some occupations. Table 2 shows the average rates of pay for men and women in each occupational group.
| Occupational group (ISCO) | Men (€) | Women (€) |
|---|---|---|
| Legislators, managers | 5,050 | 4,500 |
| Professionals | 2,900 | 2,350 |
| Technicians | 2,300 | 1,700 |
| Clerks | 1,600 | 1,250 |
| Service workers | 1,490 | 1,000 |
| Agricultural workers | 1,440 | 1,380 |
| Craft workers | 1,450 | 1,050 |
| Machine operators | 1,300 | 800 |
| Unskilled occupations | 1,200 | 950 |
| Average | 2,080 | 1,660 |
Source: CYSTAT, 2005
In 2002, the overall average monthly wage amounted to €1,322 (CY £767). However, the average wage for men was higher than the overall average, at €1,487 (CY £863), while the average wage for women was only €1,100 (CY £638). Thus, women received 74% of the wage that men received.
Efforts have been made in recent years to address the problem of unequal pay. In 1988, the average monthly wages of men and women were €646 (£375) and €401 (£233) respectively, and women’s salary amounted to only 62% of men’s salary. The following year, measures were taken to curtail this significant inequality by passing a law on equal pay for work of equal value, which came into force three years later. Moreover, the terms ‘male worker’ and ‘female worker’ were abandoned and the trade union movement began to demand higher salary increases for women than for men in order to achieve pay equality. In 2002, Cyprus passed a new law (N177(I)/2002) adopting relevant EU directives such as Directive 2002/73/EC amending Council Directive 76/207/EEC on the implementation of the principle of equal treatment for men and women as regards access to employment, vocational training and promotion, and working conditions.
Despite these initiatives to eliminate gender discrimination in the workplace, the situation persists in working conditions in Cyprus. Table 3 presents the average pay rates in the key sectors of the economy, indicating developments in relation to the gender pay gap.
| Year | Primary sector (civil service) | Secondary sector | Tertiary sector | |||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Manufacturing | Construction | Tourism | Other services | |||||||
| Men | Women | Men | Women | Men | Women | Men | Women | Men | Women | |
| 1994 | 1,308 | 756 | 1,478 | 873 | 1,838 | 987 | 1,408 | 1,061 | 1,717 | 1,180 |
| 1995 | 1,034 | 812 | 1,538 | 891 | 1,847 | 1,010 | 1,403 | 1,068 | 1,789 | 1,238 |
| 1996 | 1,273 | 770 | 1,570 | 915 | 1,754 | 1,082 | 1,400 | 1,068 | 1,892 | 1,342 |
| 1997 | 1,270 | 796 | 1,578 | 915 | 1,835 | 1,094 | 1,417 | 1,108 | 1,973 | 1,414 |
| 1998 | 1,215 | 836 | 1,538 | 892 | 2,091 | 1,422 | 1,378 | 1,075 | 2,026 | 1,456 |
| 1999 | 1,166 | 833 | 1,571 | 945 | 2,077 | 1,508 | 1,405 | 1,075 | 2,084 | 1,503 |
| 2000 | 1,412 | 901 | 1,542 | 921 | 1,992 | 1,114 | 1,412 | 1,107 | 2,103 | 1,485 |
| 2001 | 1.440 | 889 | 1,538 | 936 | 2,043 | 1,140 | 1,480 | 1,131 | 2,214 | 1,603 |
| 2002 | 1,212 | 798.20 | 1,598 | 952 | 2,045 | 1,266 | 1,380 | 1,035 | 2,256 | 1,624 |
| 2003 | 1,226 | 798.40 | 1,600 | 973 | 2,138 | 1,264 | 1,408 | 1,000 | 2,347 | 1,705 |
Source: CYSTAT, Statistical data 1993–2003
Minimum wage
The minimum wage for new entrants in most of the economic sectors is defined through collective agreements that are signed by trade unions and employers. However, in certain sectors, such as the retail trade and various services with a limited trade union presence, the issue of minimum pay rates is mainly regulated through legislation after consultation between the government, trade unions and employers. From 1974 to 1990, the legislative bill for the lowest rates of pay covered only lower-level clerks and salespersons. Since 1990, the scope of application of this bill has been extended and it now sets the minimum salaries and wages in six occupations: sales staff, clerical workers, auxiliary healthcare staff and auxiliary staff in nursery schools, crèches and schools.
In 2004, the cabinet passed an order increasing the minimum pay levels in these six occupations. Thus, in that year, the bill raised monthly minimum wages for new entrants in the six aforementioned occupational categories from €551 (£320) in 2003 to €594 (£345), representing an increase of 7.8%. The amount of the increase is in keeping with Ministerial Decision No. 55.535 of 24 April 2002, which set the objective of gradually bringing minimum wages up to 50% of the level of the national average wage by 2008. In this context, a 5.3% rise in the national average wage over the following five years was taken into account when calculating the relevant increases.
Working hours
Normal working hours in 2004 remained at approximately the same levels as the previous year and reached on average 38.4 hours a week in 2004 compared to 38.3 hours in 2003.
Employees in the education sector had the least number of working hours, at 36 hours a week (Table 4). Workers in the electricity, gas and water supply sector had the second lowest, at 37.5 hours a week. Civil servants, healthcare staff, financial services employees and manufacturing workers were among those reporting around 38 hours a week. The longest work schedules were found in sectors such as retail trade, and real estate, renting and business activities, at 39.5 hours a week.
| Economic activity | Average |
|---|---|
| Agriculture, hunting and forestry (NACE A) | 39.8 |
| Fishing (NACE B) | 38.0 |
| Mining and quarrying (NACE C) | 38.0 |
| Manufacturing (NACE D) | 38.1 |
| Electricity, gas and water supply (NACE E) | 37.5 |
| Construction (NACE F) | 37.8 |
| Wholesale and retail trade (NACE G) | 39.5 |
| Hotels and restaurants (NACE H) | 39.0 |
| Transport, storage and communication (NACE I) | 38.7 |
| Financial services (NACE J) | 38.1 |
| Real estate, renting and business activities (NACE K) | 39.5 |
| Public administration and defence (NACE L) | 37.9 |
| Education (NACE M) | 36.0 |
| Health and social work (NACE N) | 38.0 |
| Other community, social and personal services (NACE O) | 38.2 |
| Average | 38.4 |
Source: CYSTAT, 2005, p. 248
Occupational accidents
The number of persons involved in occupational accidents in Cyprus increased to 2,172 workers in 2004, compared with 2,086 in the previous year. About 29% of the accidents occurred in the manufacturing sector, 28% in construction, 13% in the wholesale and retail trade sector, and 12% in hotels and restaurants.
Figure 2 shows that, overall, the trend in fatal accidents is declining, especially since 1990. Across all sectors, 10 fatal accidents were reported per 100,000 workers in the period 1987–1989, compared with about four such accidents per 100,000 workers during the subsequent 15 years. This trend reflects improvements in working conditions and safety measures.
Figure 2: Rates of fatal accidents in selected sectors, 1989–2004 (per 100,000 workers)
Source: CYSTAT, 2005
Rates of fatal accidents in selected sectors, 1989–2004 (per 100,000 workers)
Employment insecurity among young people
Young people are considered to be one of the most vulnerable groups in the employment market. The INEK survey Unemployment, underemployment and flexible employment: Uncertainty and insecurity of young people in Cyprus has identified several reasons for their job insecurity.
Within the framework of this research, young people are classified as aged between 15 and 35 years, thus including those who are still in education and young adults who are actively involved in the labour market. The survey also presents statistical data concerning youth employment and unemployment in Cyprus.
Individuals in the 15–34 year age group are estimated to number around 212,800 persons, corresponding to 29**%** of the total population, yet they constitute the majority of unemployed people, accounting for 51% of those unemployed in Cyprus. Persons unemployed under the age of 25 years represent 12.1% of all those unemployed.
Furthermore, young workers comprise 43% of part-time employees, with some 40% of these holding university qualifications. This high percentage can be explained by the predominance of young people in more flexible forms of work. In all, 57% of temporary employees belong to the 15–34 year age group and 54% of these are working on a temporary contract because they were unable to find a permanent position.
According to the INEK survey, the main reasons for job insecurity among young people in Cyprus are twofold, namely:
insecurity caused by social exclusion and marginalisation. This situation is more common among people who have insufficient capital in economic, educational and social terms. These deficits make it difficult for them to participate fully in the labour market, which in turn adds to the problem;
insecurity due to a mismatch between the person’s aims and expectations, on the one hand, and the actual wages or working conditions, on the other.
Young people in Cyprus are subject to different forms and degrees of employment insecurity, which derives from the following factors:
the status of youth in Cypriot society, which assigns young people a vulnerable position based on age discrimination;
the precarious work positions and types of employment, such as being underemployed, working part time, or holding a temporary or flexible job contract.
The INEK survey identifies another kind of job insecurity, which concerns individuals with low educational levels employed in unskilled or low-skilled work and who feel threatened by increasing competition from migrant labour. Conversely, young workers with a high educational level but on low pay also experience insecurity due to the imbalance between their qualifications and income.
Young people can develop a sense of insecurity not only through a material deficit but also by comparing their working status with older people who already have higher positions. As a result, young people feel that they do not earn the respect and the job satisfaction they expected to have; this feeling is particularly acute among the most educated.
The study proposes general policy guidelines for combating job insecurity. The main policy guidelines are as follows:
to formulate specific research programmes and institutions to deal with all issues concerning young people;
to conduct a special survey on those who drop out of school in order to identify the reasons for this trend;
to draft legislative and institutional regulations focusing on youth issues;
to inform the public about the issues that concern young people;
to undertake political initiatives and institutional reform in order to promote youth participation in the decision-making process.
Conclusions
This report outlines the main results from Labour statistics 2004 and from the 2004–2005 INEK survey Unemployment, underemployment and flexible employment: Uncertainty and insecurity of young people in Cyprus. The data presented reveal that the expansion of economic activity in 2004, mainly as a result of the higher growth rate of the services sectors, had an impact on the labour market. In 2004, the pay rates in Cyprus increased by 4.2% in nominal terms and by 1.9% in real terms, and the median salary rose to €1,386 (£804) in 2004 from €1,334 (£774) in 2003.
A crucial issue that emerges from the CYSTAT survey is the different rate of pay between men and women. Several initiatives have tried to eliminate gender discrimination in the workplace, including legislation and trade union intervention; nevertheless, this situation persists in Cyprus. The INEK survey reveals a further sensitive issue: the employment insecurity of young people. It proposes general policy guidelines for combating this problem.
The studies show that that working conditions in Cyprus have improved in some respects, particularly in relation to better health and safety measures. However, despite a strengthened economic situation, inequalities persist in terms of pay between men and women. In addition, new challenges have arisen in the labour market, impacting particularly on the job security of young people.
References
Cyprus Labour Institute (Ινστιτούτο Εργασίας Κύπρου, ΙΝΕΚ), Unemployment, underemployment and flexible employment: Uncertainty and insecurity of young people in Cyprus, 2004–2005.
Cyprus Labour Institute (Ινστιτούτο Εργασίας Κύπρου, ΙΝΕΚ), Cyprus economy and employment, annual report 2004, 2005.
Statistical Service of Cyprus (Στατιστική Υπηρεσία της Κυπριακής Δημοκρατίας, CYSTAT), Labour statistics 2004, Printing office of the Republic of Cyprus, 2005.
Polina Stavrou, Cyprus Labour Institute (INEK-PEO)
EF/07/95/EN
Eurofound recommends citing this publication in the following way.
Eurofound (2007), Overall increase in wages but women still earn less than men, article.
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