Signs of life in the Greek labor mar­ket

Em­ploy­ment and hir­ing fig­ures this year gen­er­ate some cause for hope, but there is plenty to be wary of as well

Kathimerini English - - Focus - BY NICK MALKOUTZIS

ANAL­Y­SIS Now that Greece is on a slightly more cer­tain foot­ing fol­low­ing the June 15 agree­ment be­tween the gov­ern­ment and its cred­i­tors at Lux­em­bourg’s Eurogroup meet­ing, as well as the de­ci­sion last Fri­day by the Euro­pean Sta­bil­ity Mech­a­nism (ESM) to dis­burse the next bailout tranche of 7.7 bil­lion eu­ros, per­haps we can we start to look for signs of a re­cov­ery. On this is­sue, there is a sub­stan­tial dis­crep­ancy be­tween what the gov­ern­ment would like Greeks to see and what public opin­ion ac­tu­ally be­lieves.

First, let us start with some­thing that ev­ery­one can agree on: An eco­nomic re­cov­ery that does not address Greece’s un­em­ploy­ment prob­lem is a false dawn. More than 1 mil­lion jobs lost since the be­gin­ning of the cri­sis eight years ago have yet to reap­pear, youth un­em­ploy­ment stands at 45.5 per­cent and – among al­most 11 mil­lion in­hab­i­tants – only 3.76 mil­lion are ac­tu­ally em­ployed. Un­til the bal­ance en­tailed in such data changes, it will be dif­fi­cult for any­one in Greece to feel that an eco­nomic turn­around is hap­pen­ing.

Looked upon from a dif­fer­ent an­gle, one could say that job cre­ation is the sin­gle most im­por­tant way by which to gauge the ef­fec­tive­ness of any re­cov­ery. The gov­ern­ment wants to point to fall­ing un­em­ploy­ment fig­ures and house­holds want to add to their in­comes as well as see their job­less mem­bers re­turn to work. Their mo­ti­va­tions may be dif­fer­ent but their goal is the same.

Poll­sters work­ing for MRB re­cently asked around 2,000 Greeks to name the three most se­ri­ous prob­lems fac­ing the coun­try. Ac- cord­ing to the re­sults of the poll, pub­lished last Thurs­day, more than two thirds (68.4 per­cent) of re­spon­dents in­cluded un­em­ploy­ment in their an­swers, mak­ing it by far Greece’s big­gest con­cern. The sec­ond on the list was the tax sys­tem with 41.6 per­cent.

This highlights how anx­ious Greek so­ci­ety is about job cre­ation and re­ten­tion. The gov­ern­ment has been try­ing to em­pha­size this month that the sit­u­a­tion has been grad­u­ally im­prov­ing and is sig­nif­i­cantly bet­ter than dur­ing the depths of the cri­sis, when the of­fi­cial un­em­ploy­ment rate all but reached 28 per­cent.

“What we need to fo­cus on is that since 2015, the un­em­ploy­ment rate has fallen by around 5 or 5.5 [per­cent­age] points,” gov­ern­ment spokesman Dim­itris Tzanakopou­los said dur­ing an in­ter­view on Real FM last Fri­day. “Th­ese are num­bers that show a cer­tain mo­men­tum. They show a trend for re­cov­ery in the Greek econ­omy.”

Num­bers game

In fact, the sea­son­ally ad­justed un­em­ploy­ment rate has dropped from 25.8 per­cent in Jan­uary 2015 to 21.7 per­cent at the end of April this year, ac­cord­ing to data pub­lished by the Hel­lenic Sta­tis­ti­cal Author­ity (ELSTAT) last week. A drop of 4.1 points, rather than “around 5 or 5.5 points” but, nev­er­the­less, a siz­able de­cline.

It also needs to be pointed out that the un­em­ploy­ment rate did not be­gin to drop when SYRIZA came to power in Jan­uary 2015. It peaked in July 2013, when it reached 27.9 per­cent and then started to ease slowly.

The prob­lem is that this de­cline has hardly reg­is­tered with Greek house­holds and has pro­duced no im­me­di­ately vis­i­ble change. One rea­son is that the un­em­ploy­ment rate re­mains ex­cep­tion­ally high by Euro­pean stan­dards. The eu­ro­zone’s av­er­age un­em­ploy­ment rate was 9.3 per­cent in May, while youth un­em­ploy­ment stood at 18.9 per­cent. Greece still sticks out like a sore thumb when the eu­ro­zone job­less rates are lined up. The near­est coun­try is Spain with a rate of 17.7 per­cent.

Try­ing to con­vince Greeks that some­thing pos­i­tive is hap­pen­ing in such an en­vi­ron­ment is a thank­less task. Un­der­stand­ably, what they see is that just over one in five of their friends and rel­a­tives are out of work, that no other coun­try us­ing the sin­gle cur­rency is ex­pe­ri­enc­ing this level of job­less­ness and that prospects for young peo­ple are still poor.

To em­pha­size this last point, a re­port pub­lished last week by the Foun­da­tion for Eco­nomic and In­dus­trial Re­search (IOBE) in­di­cated that 36 per­cent of those who grad­u­ated from univer­sity since 2011 are cur­rently un­em­ployed, which means that the per­cent­age of Greek ter­tiary ed­u­ca­tion grad­u­ates who are em­ployed is the low­est in the EU. Also, 73 per­cent of those who have grad­u­ated since 2011 earn un­der 800 eu­ros a month, with more than a quar­ter mak­ing less than 400 eu­ros a month.

It is no surprise, then, that the pos­i­tive hir­ing fig­ures pub­lished by the Labor Min­istry on Fri­day have failed to regis­ter in Greece in any mean­ing­ful way. Ac­cord­ing to the min­istry’s Er­gani data­base, there were al­most 100,000 net hir­ings (hir­ings over dis­missals and de­par­tures) in June alone, which has been the high­est fig­ure seen for this par­tic­u­lar month since 2001. The data also show that since the be­gin­ning of the year, there have been al­most 256,000 net hir­ings.

Flex­i­ble labor

How­ever, an­other im­por­tant fac­tor in damp­en­ing what would oth­er­wise be con­sid­ered pos­i­tive news is the pre­car­i­ous­ness of th­ese jobs. Of the record hir­ings reg­is­tered in June, for in­stance, 42 per­cent in­volved part-time work and an­other 17 per­cent shift work, so that only half of the new jobs were full-time ones.

There is also, un­der­stand­ably, a dis­tinct sea­son­al­ity to many of the hir­ings that were made in June. Food ser­vice, ac­com­mo­da­tion and re­tail were the three sec­tors with the big­gest net con­tri­bu­tion to the jobs made avail­able. What is ex­pected to be an­other record year for tourism ar­rivals has a sig­nif­i­cant part to play in this de­vel­op­ment.

So, if we try to take a bal­anced view of the Greek labor mar­ket at the mo­ment, the en­cour­ag­ing signs are that the un­em­ploy­ment rate con­tin­ues to drop and that there has been a rise in hir­ings. The rea­sons for cau­tion are that the pro­por­tion of peo­ple in Greece with­out jobs con­tin­ues to be ex­ceed­ingly high, the work­ing con­di­tions for young Greeks who are able to find jobs are mostly poor, and many of the po­si­tions avail­able to job­seek­ers of all ages are not full-time.

We can take heart from the in­di­ca­tions that the sit­u­a­tion in the Greek labor mar­ket ap­pears to be chang­ing for the bet­ter, but we should be aware that more job qual­ity and quan­tity will be needed be­fore the coun­try can start to feel any sense of re­lief.

An IOBE re­port pub­lished last week in­di­cated that 36 per­cent of univer­sity grad­u­ates since 2011 are cur­rently un­em­ployed.

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