Greeks flock to informal work as recession deepens
ATHENS, Dec 24, ( RTRS): Greek dietician Reggina knew she had little choice when her boss told her she could keep her job at a health centre only if she agreed to getting part of her salary off the books.
With Greece sinking deeper into recession and no other jobs to be found, she meekly agreed last year to monthly pay of 160 euros in cash and 700 euros on the books — allowing her struggling firm to pay lower social security contributions.
At 26, Reggina had joined the ranks of a growing number of young Greeks resorting to informal work to get by during an economic crisis that has left Greece with a youth unemployment rate of 56 percent — the highest in the euro zone.
“It’s not just psychological war, it’s abuse,” said Reggina, who like others declined to give her full name because of the illegal nature of her work.
“I get fewer social security vouchers and I can’t get a loan because my salary on paper is so low. But they tell us if we talk about this, we’ll lose our jobs.”
Data suggests informal work in Greece — which already has one of the largest grey economies in the euro zone — is rising quickly, fuelled by both cash-strapped businesses trying to save on contributions to the state and desperation among jobseekers.
In the first half of the year informal workers accounted for 35 percent of about 30,000 employees during checks by the SEPE agency that inspects firms, up five percentage points from 2011. More than half of them were Greeks and 41 percent were migrants.
Most of them were employed in the construction sector or in family businesses like restaurants, cafes, bars and shops. The number of self- employed in Greece — another indicator of the rise in informal work — now stands at 31 percent of workers, twice the euro zone average, says Athens-based think-tank IOBE.
“When the recession is so deep, labour rights are among the first to be sacrificed,” said SEPE Director Michalis Kandarakis.
“They become less important for employers.”
Unionists allege businesses have become so innovative in finding ways to cut costs during the crisis that some companies have even deposited salaries but demanded part of the money back in cash a few days later or paid workers in supermarket coupons.
They argue the efforts of Greece’s international lenders to loosen strict labour laws have only made matters worse, allowing employers to use part-time or flexible contracts to pay workers the minimum possible on the books and the rest under the table.
“Many businesses, even profitable ones, are taking advantage of the crisis to make money out of it,” said Nikos Kioutsoukis, general secretary of private sector union GSEE.
“The government’s policies prescribed by the lenders are wrong and push young people to the black market for labour. Informal work will spiral out of control if this continues.”
He estimates as many as 35 percent of Greek workers toil off the books in one form or the other, with some self-employed workers turning to it to avoid high taxes and others forced into it by businesses aware of the limited choice job-seekers have.
At the other end of the spectrum, young Greeks say conditions in the job market are so dire they consider themselves fortunate to have even an informal job — despite not knowing if they will ever get the money they were promised.