Unemployment in Greece has remained at a double-digit rate for last 14 years and has failed to drop below 10%.
Even in the last 18 months of contraction, it has failed to drop below 10%, with experts pointing to a pool of 500,000 unemployed at the hard core of the phenomenon.
Its rate may have decreased last March to 10.2% from 10.8% in February, but it remained above the 10% “psychological” barrier.
Experts say the main reason for unemployment remaining around 10% is the lack of investment, which would lead to the growth of the economy and new jobs, but also the mismatch in the supply and demand of skills. They also emphasize that the typical unemployed person is a woman aged up to 24, jobless for over a year, reported daily kathimerini.
Main distortions in the Greek labor market
The decrease in the rate of unemployment is problematic, with the rate “stuck” above the psychological limit of 10% (10.2% in March). At the same time, there is a huge problem, as many companies are looking for labor, to no avail. Although the forecasts of both domestic and international analysts indicate that the downward trend will continue, however, the halt in the pace raises questions regarding what will happen next.
At the same time, challenges in the labor market are increasing. According to the Foundation for Economic & Industrial Research (IOBE). the decrease in the unemployment rate makes it more difficult to find staff, resulting in increased tightness in the labor market, especially in the construction, tourism, manufacturing and primary sectors.
Despite the noticeable reduction in unemployment in recent years, several distortions continue to exist, as the unemployment rates of women, young people and the long-term unemployed remain significantly higher than the EU average.
According to IOBE analysis citing data form the Bank of Greece, unemployment is estimated to be close to 13%, twice as much as in many EU countries, which is an indication of the existence of serious distortions and structural problems in the labor market.
The Central Bank is also ringing the bell for the so-called narrowness of the labor market which, as it emphasizes, can threaten the country’s development prospects.
It refers to the phenomenon where while there is a demand for work, there is not a workforce to fill it, especially in labor-intensive industries such as catering, tourism and trade.
This, according to the BoE, is an indication of the existence of serious distortions and structural problems that require incentives to increase employment, such as reducing insurance contributions for employers, increasing the participation of young people and women in the labor market, and training the unemployed in new skills .
The BoG also proposes incentives for the return of scientists who emigrated during the crisis period (brain regain), but also the influx and integration of qualified economic immigrants.
At the same time, Greece is in the worst position among the 27 EU member countries in a negative ranking for young people. The country has the largest mismatch between educational training and the type of employment of young workers aged 20 to 34.
The problem in the field of employment is twofold, as on the one hand high unemployment that exceeded 10% at the end of 2023 and low participation in the labor market (61.8%), well below the European average (70.5%) and on the other hand, severe shortages of workers and a mismatch between the supply and demand of professions are observed.
At the same time, 38% of this age group work in lower-level occupations than they could pursue based on their educational level, according to Eurostat data.
Flexible forms of work and pay
Among the negative aspects of the labor market is the explosive rise of flexible forms of employment, whose contracts cover – approximately – 50% of new hires.
Specifically, in 2023 – according to the data of the ERGANI information system – 3,214,205 new hires were registered, of which 1,651,220 were full-time and 1,562,985 related to flexible forms of employment.
At the same time, more than one in two workers – a total of 1,233,031 people, a percentage of 53.68% received a salary lower than 1,000 euros gross.
In the ranking according to the fees they receive, the most numerous is the group of those who are paid 1,000 and 1,200 euros. These are 373,163 workers who make up 16.25% of all workers in the private sector of the country which reaches 2,296,845 people.
A large number of 284,134 workers receive less than 500 euros per month.
Obviously, these are workers with flexible forms of employment, the total number of which is smaller by 52,266 people compared to 2022, economic daily oikonomikos taxydromos noticed in its lengthy report.
double digit unemployment… but at the same time they say they ‘need’ to bring in ever more foreigners to fill jobs… and the same mantra is repeated over and over.. almost as if it’s deliberate.
Elsewhere, the headline says that farm workers from Egypt are needed to fill the labour shortage. Something not right here. A big obstacle to investment from outside is the level of corruption generally and the dysfunctional legal system.
Does anybody know where exactly the educational mismatches with the labor demand are?
It is the level of education (for instance ‘over-educated’) or the wrong subject of education (too many people with anthropology degrees for instance, to name just one)?
PS with the onset of AI, many jobs such as administrative jobs, book keepers, etc. will be axed. And not only repetitive jobs but also highly qualified jobs such as programming.
There will always be jobs that require adaptive hand and mechanical (fine) skills such as plumbing, metal and woodwork, etc. Masonry not so much, there are already brick laying machines but anything that requires imaginative hand skills will be demand for.
Exactly, countries can’t run properly if all thier over entitled youth think they are going to be doctors or lawyers, reality is ,nobody is going into construction but we are getting are coffee served by undergraduate baristas .
This doesn’t happen in northern Europe because they respect their trades people , and treat them with respect.