Greece Financial Crisis: How It Would Look in America

July 1, 2015 1:51 PM EDT

Greece is in the middle of a fresh round of economic tumult as its leaders try to negotiate terms for a new bailout package to keep the country financially afloat. Since 2010, Greece has been receiving money from the European Union and the International Monetary Fund in exchange for agreeing to harsh spending cuts and tax increases. The steep cost-cutting measures, known as austerity, have become a common practice across Europe as the continent has struggled to regain its economic footing following the global financial crisis of 2008.

But Greece’s case has been especially extreme. With steep slashes to health funding, salaries and pensions along with huge tax increases, Greek unemployment has skyrocketed, as have the number of people in poverty. As of Tuesday night, Greece had defaulted on a $1.7 billion payment to the International Monetary Fund, and the financial future of the country is looking increasingly dire. Greece will have to agree to even more spending cuts to continue to receive funding.

To place the severity of Greece’s austerity measures over the last several years in perspective, here’s an idea for how the same types of cuts would impact the United States.

Greece’s minimum monthly wage was cut by 22% in 2012, from 751 euros to 586 euros. A similar cut in the U.S. would drop the hourly minimum wage from $7.25 to $5.66.

In 2009 and 2010 Greece implemented a variety of cuts to salaries for public sector workers that worked out to an average pay cut of about 15%. In the U.S. that would decrease the average government employee’s pay from $51,340 per year to $43,639, using 2012 figures.

Pension cuts have been an especially controversial pain point in Greece, and the combined cuts have lead to a 40% decrease in pension funding since 2009, according to the Associated Press. A similar drop in Social Security payouts in the U.S. would mean the average senior citizen’s monthly would mean a drop in Social Security payouts from $1,294 per month on average to $776 per month.

Greece’s national health budget has been slashed by about 40% since 2008, according to the New York Times. Using U.S. health spending figures from 2013, that would drop federal, state and local government spending on health care from $1.25 trillion ($3,980 per person) to $725 billion ($2,388 per person).

In 2010 Greece increased the tax on cigarettes by about 20 percent. That would increase the tax on a pack of cigarettes in New York from $6.86 to $7.89.

Here’s What Greek Austerity Would Look Like in America

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