BUSINESS

Worrying picture behind Greece's hiring figures

NICK MALKOUTZIS

Greece’s tourism sector, which is again set to break its record for the number of arrivals this year, appears to be the key driver for the apparent rise in hirings.

TAGS: Analysis, Economy, Business

“Facts are stubborn things, but statistics are pliable,” Mark Twain wrote many years ago. Today, where economic statistics have become such a mainstay of our lives and a key element in decision making, politicians have become adept at bending figures to suit their agenda. However, perhaps the greatest difference with Twain’s era is that there is now such a wealth and diversity of data that anyone wanting to get a true picture – to establish the facts in other words – is usually able to do so.

For instance, those who backed the Leave campaign in Britain’s recent referendum on European Union membership, banishing warnings of the damaging economic impact of Brexit, may have been encouraged last week by figures indicating that UK unemployment remained at an 11-year low in the second quarter of this year.

The Office for National Statistics (ONS), the UK equivalent of the Hellenic Statistical Authority (ELSTAT), said that the headline unemployment rate remained at 4.9 percent, while the employment rate was at 74.5 percent, which is the highest it has been since records began in 1971.

Brexiters were advised to put champagne on ice, though. Firstly, the referendum was held on June 23 so, as David Freeman of the ONS pointed out, little of the data “cover the period since the result of the EU referendum became known.” Another blow to the theory that the victory for Leave will not have a detrimental effect on the economy, and employment, lies in the indication that UK businesses are changing their hiring plans as a result of the vote’s outcome.

The percentage of employers expecting to increase staff levels over the next three months dropped from 40 percent before the Brexit vote to 36 percent in July, while 33 percent of employers expect Brexit will increase their costs according to a survey by the CIPD, the professional body for human resources, and Adecco, an employment agency.

Furthermore, experts pointed out that the increase (by 172,000) in the number of people entering the UK labor force in the second quarter of the year was largely driven by a rise in the number of self-employed rather than a surge in hirings by companies. “The number of employees rose by 73K – less than the 106K average of the previous three years – with self-employment making up most of the remainder,” Samuel Tombs at Pantheon, an economic intelligence firm, told the Financial Times.

This particular debate is very relevant to Greece, especially as hiring figures published in Athens last week suggest the economy is looking rosier than it has in recent years. According to the Greek Labor Ministry’s Ergani system for monitoring the employment balance, there were net hirings of 19,281 in July. This is a significant swing from a year earlier when, in the midst of Greece’s referendum and the imposition of capital controls, 16,658 more people lost their jobs than were hired. This July’s figure for difference between hirings and dismissals is the highest since 2001.

Before we get too excited or hopeful about this record upswing, we need to take a closer look at what the data show. In this case, as with the UK’s employment figures, there is cause for concern rather than celebration. According to Ergani, less than half of the people taken on in July were given full-time jobs. In fact, 39 percent gained part-time positions and 15 percent were offered shift work. It is no surprise, therefore, that the highest net hirings were in the younger age groups, where people are more willing and able to make compromises.

Worryingly, in the 30-44 age group, which includes many Greeks who have dependants, the hiring balance was negative. There were 4,088 more departures than hirings.

Another factor to curb our enthusiasm is that the tourism sector, which is again set to break its record for the number of arrivals, appears to be the key driver for the seemingly encouraging figures. The highest net hirings in July were in the food service, accommodation and food industry sectors, underlying the seasonal nature of Greece’s job market.

The figures also highlight the relatively meager opportunities that are available to young Greeks beyond part-time work in the summer. This was driven home by newly published statistics from another source, the European Commission’s statistical agency, Eurostat.

According to the Brussels-based organization, 26.1 percent of young Greeks aged 20 to 24 were classified as being neither in employment nor in education or training in 2015. This was the second highest figure in the EU after Italy and represented a rise of 9.3 percentage points over a decade during which few member-states saw dramatic increases. Eurostat’s figures also show that the proportion of 20- to 24-year-old Greeks exclusively in employment plummeted from 35.4 percent to 19.5 percent between 2006 and 2015. During this period, there was no great increase in young Greeks exclusively in education or working and studying, suggesting that many of them have simply drifted to the margins or left the country.

What we can discern from all these numbers is that although the Greek economy appears to be benefiting from a period of relative calm, especially after last year’s trauma, there are still deep structural problems preventing the kind of convincing recovery that creates secure and lasting employment. We are sustaining ourselves mostly on short-term, part-time jobs that are linked to the one sector of the economy that has found a way to forge ahead: tourism. There is nothing in the figures to suggest that this is sustainable in economic or social terms over a long period of time.

No matter how much we may be tempted to bend the statistics, there is no escaping from this fact.

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