ATHENS, Jan. 28 (Xinhua) -- Greek Prime Minister Alexis Tsipras announced at a cabinet meeting on Monday the increase of the minimum salary level from 586 euros (670 U.S. dollars) to 650 euros per month in the private sector.

The measure, which constitutes an increase of over 11 percent, will start applying as of Feb. 1.

Meanwhile the government is abolishing the so-called subminimum salary that applied to workers aged under 25. The 650 euros/month rate will apply to them too.

"This is just one step on the long course to reversing the injustices to the construction of a society of equality and solidarity," said Tsipras, adding that "we aspire to continue on this course."

The minimum salary was reduced to 586 euros in 2012 as a means of boosting the country's competitiveness.

Employer associations have warned that an increase to the minimum salary would be damaging to the small and mini enterprises, which form the backbone of Greek economy.

Ioannis Cholezas, a labor researcher at the Center of Planning and Economic Research (KEPE), a state-supported think tank, told Xinhua that "it is fair to say smaller enterprises stand to suffer most because they have a significant share of their staff paid the minimum salary."

"It remains to be seen which financial domains and sections of the workforce will be affected, but in theory the increase in costs may affect the employment of young people, women and those with low education, who will not be as attractive to employers as before the hike," Cholezas explained, citing also the possibility of an increase in undeclared labor.

On the abolition of the subminimum salary, Cholezas said he considered the reduced level for the youth as "a useful instrument for the employment of young people and their obtaining of work experience that employers always desire", but "could also lead to a distorted use and be damaging in certain cases".