BUSINESS

Greece unemployment to remain near 27 pct through 2015, OECD predicts

Greece's unemployment rate will remain around 27 percent through to the end of 2015, according to OECD estimates made public on Wednesday.

“Despite moderate signs of recovery across many OECD countries in 2014, the unemployment rate in Greece remains stuck at close to its highest level since the onset of the economic crisis (27.2 percent as of May 2014),” the Paris-based organization said in its 2014 Economic Outlook.

“OECD projections suggest that the expected joblessness rate in Greece will remain high (around 27 percent) through to the end of 2015,” the report said.

According to OECD data, debt-hit Greece shows one of the highest shares of long-term unemployment among OECD economies with the figure soaring from 49 percent to 71 percent between Q4 2007 and Q1 2014.

Long-term unemployment, the report warned, is a contributing factor to structural unemployment as a result of skill depreciation and diminishing motivation to look for a job.

The report said Greece – particularly the private sector – saw one of the biggest drops in real wages across OECD countries, more than 5 percent per year on average since the first quarter or 2009.

“While the sharp decline of wages contributed to partially reverse the gap in unit labor costs with Germany, and restore external competitiveness, hourly labor productivity growth has remained stubbornly negative since the onset of the crisis,” it said.

The report also took issue with labor market security and the quality of working environment in Greece. It said the country ranked near the bottom (31st place) of the OECD table.

“Greek workers face excessive job demands with insufficient resources to meet their work requirements. This situation not only hinders productivity but can have strong negative effects on workers' health,” it said.

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