Introducing a Safety Net: The Effects of Neoliberal Policy on Welfare, Poverty, and the Net Social Wage during the Greek Crisis

Abstract

The combined effects of internal devaluation and fiscal consolidation policies implemented in Greece between 2010 and 2019 are reflected in substantial levels of income contraction and unequal distribution of the financial burden. Neoliberal policy responses are examined through a safety net that allocates scarce fiscal resources to persons in extreme need, subject to high primary budget surplus targets. The safety net operates in this manner when social pressure upon the worker class intensifies. Further, the essay explores two supplementary aspects. First, a modified measure of poverty using the conventional approach of differentiated income poverty lines is considered. Second, net social wage variations are examined. Results indicate Greek workers have suffered substantially and that neoliberal policies have placed disproportionate burdens on persons most in need.