The expansion of flexible labor led to the creation of 150,000 new jobs in the country from the second quarter of 2014 to the first of 2017, according to National Bank of Greece’s monthly economic bulletin.
Following a period when private sector employment shrank dramatically – 1.1 million jobs were lost from 2009 to 2013 – and the labor market underwent a painful restructuring, the NBG analysis discerns the potential for the creation of as many as 230,000 jobs up to 2019. It does set a condition for that, which is the recovery of business investments.
According to the bulletin, employment in the private sector grew by 5.2 percent within three years, with the average growth rate at 1.5 percent per year, in a period when gross domestic product remained practically stagnant. Of the 1.1 million workers who lost their jobs from 2009 to 2013, 780,000 were salary workers and 320,000 were self-employed professionals and unpaid workers employed in family enterprises.
The analysis stresses the considerable role of flexible forms of labor with a relatively low number of working hours per week and often unstable features. It does note, however, that given the very high jobless rate and the flight of some 450,000 Greeks abroad in the last eight years, priority must be placed on the economy’s capacity to create jobs in the private sector at a growing rate. Crucially, job market growth will stem the brain drain if the creation of new jobs is accompanied by an improvement in the quality of employment.
NBG notes that for the momentum to grow, the labor market requires an immediate rebound in productive investments following several years of divestment that has driven the ratio of the employment index to business investment to 23 percent, with negative consequences for productivity.
A sustainable correction in the labor market will require a minimum of five years with an increase in capital investment averaging at least 8 percent per annum, the analysis states.