The great divide

Today’s graph compares inflation-adjusted public pensions per head with compensation per employee. Across Europe, public pensions have risen significantly faster than salaries.

In particular, countries hit hardest by the Eurozone crisis — such as Greece, Italy, and Spain — have seen stagnating or even falling wages. Interestingly, the burden of internal devaluation to regain competitiveness was carried mainly by the working population, not as much by public retirees.

In Luxembourg, public old-age pensions have increased by 25% since 2008, compared with a 15% rise in salaries over the same period — a gap that highlights the growing divergence between income groups.