Unemployment

by Greek Reporter

If one thing can break a man, it is unemployment. Unemployment not only deprives him of funds to support himself, but alienates him, at least partly, from social life. Now unemployment is not a new thing for the Greek –or for the matter of fact for any country- but during a financial crisis it is one of the first things to affect the average citizen and should be taken care of.

The Specifics of The Situation in Greece

A few days ago new data on unemployment was published. Unemployment rates climbed at a rate of 4% per year, reaching the 16% mark. We are still in the peak of the tourist season, ergo more jobs lost in September. Furthermore, the word is that these are not the actual percentages, since people that work odd and part-time jobs are included in the working numbers.

Additionally, some other indexes are worrying too. Young people & women seem to be hurt the most as their rates hover around 40%. This means that the most productive part of the population is out of the market AND that an explosive economic situation is forming. It directly affects family formation and can even make retirement questionable. Some people speak of a Lost Generation.

Unemployment for older people is high too. In such a competitive labor market, some of them will never find a job again. They will have to make do with odd jobs.

Aside from personal unemployment, the economic crisis is devastating for small businesses. The Greek economy is based on small businesses. These were actually the ones to take the first blow. Right at the start of the crisis, retail sales in the non-primary goods fell. Tens of thousands of small businesses (in a country of 10,000,000) went under. Most owners closed up with outstanding payments. That raised the real unemployment percentage even more.

But this is not the scariest statistic of them all. For the first time the economically active population (this means the people that have a job and pay taxes) is LESS than the inactive one. (i.e. the children, elders & unemployed). That means that the working people have to work harder to support their families and that the state will have even less revenue in the future. To some it seems like a point of no return.

The 3 Safety Nets

I believe we are lucky to have several safety nets for the people that loose their job and find it hard to get a new job quickly.

When an employee is laid off (in accordance with the European practices) the employer, by law, has to pay him a form of compensation. (That is a salary for ever year in service, IIRC). That acts as a safety net for the employee.

Also the state has an unemployed support mechanism related to the number of years on a job. The employee is eligible for a monthly welfare check that is about 40% of a worker's salary. Contrary to popular belief, it can only go as far as 12 months, sometimes even less. (For those laid off from a seasonal job, unemployment benefits are not even guaranteed. They must have a minimum of workdays and then the benefits can not exceed a period of 6 months).

These two measures act supportively for the unemployed during the first months of an almost desperate situation. They may barely make the food and house bills but at least they have that to start over.

Sadly the state has proven itself incapable of managing unemployment, but also of setting a system of matching available workers with open job slots.

The Biggest Safety Net is Family

I will be covering the issue and its savior effect these days in a future installment, but let’s just say that the traditional Greek family is closer to the young than most.

In these troubled times it means direct and indirect financial support (i.e. the Granma’s home becomes the daycare station), moral support, even housing in the extreme situations of unemployment if the new couple loses their house.

Indeed more and more people are starting to move back with their families. In many cases it is also a movement from the cities back to the smaller towns. Family ties are strengthened and a more sensible approach to household economics is taken. Maybe the Greek collapse recuperation mechanism is already at work.

 The Effects

The obvious and direct effect is that less money comes in the hands of the people that need it the most. Unemployment in a closed economy like Greece, predominantly affects cash availability. The effects circulate and grow throughout the economy as less buying leads to less selling which, in turn, leads to even less buying.

The collateral effect seems equally important. As mentioned in the starting paragraph unemployment affects the whole life of the jobless. The effect, that gradually builds up, is the so-called “Social Alienation”. Practically speaking this means the unemployed has not only lost his job, but a large part of his social interactions as well. He is forced to spend less time with friends and fellow workers. Many of the activities that happen in a daily, normal life are lost. He is also constantly subjected to the pressure of supporting a family without a steady job.

Being unemployed can be demeaning, as a person is expected to stay productive and contribute to society. Even though unemployment is not a person’s choosing, the pressure is to find a job. Thankfully, that does not apply too much in Greece because it is not the first time Greece has faced a recession or an economic disaster (which is reminiscent of the after-WWII crippled Greece of the 50s). Because of this, unemployment is not a black mark, but a situation, or if you want a challenge, to live by.

What really scares the unemployed most of is the lack of prospect. Can there be any expectations of a new good job in a time of recession with no end? When it is evident that the rocky path Greece is treading is spreading to the rest of the European countries? When practically there is no alternative?

Greek Reporter - 23 August, 2011