BUSINESS

Measures to contain unemployment spike

THANOS TSIROS

TAGS: Economy

The government is seeking to contain the rise in unemployment through a broad and generous program of corporate subsidies encouraging businesses to hire more employees, and by extending a ban on layoffs for any professionals benefitting from the pandemic support measures.

In practical terms, the scheme represents a new social contract with employers and will take immediate effect: The state will cover a large part of non-salary costs in the coming months for those who make hirings, mainly subsidizing social security contributions. Those benefitting from this program or other measures will not be able to dismiss any staff.

For example, a new round of cheap state loans known as the “Deposit To Be Returned“ prohibits recipients from making any layoffs until the end of the year, while the first two rounds had imposed a ban on layoffs only until end-October. The ministerial decision with the eligibility criteria, including the layoff ban until end-December, is expected after September 21 when applications by employees will be completed.

The damage wreaked by the lockdown and slowdown on the labor market is already being felt, while harder times are still to come. The number of people who are employed has dropped by more than 200,000 during the pandemic, if one factors in the fact that employees on furlough for up to three months continue to be considered employed despite receiving the monthly allowance of 534 euros.

Analytical data from the Hellenic Statistical Authority (ELSTAT) on the labor market in the second quarter due to be released this week will show a significant decline in employment hours. This index reflects with more detail the consequences of the pandemic on the labor market, as its counts lost days of labor, which already amount to tens of millions.

Available data have so far shown that the number of people employed in June came to 3.744 million, against 3.918 million a year earlier, but they include those in contract suspension for up to three months. According to Labor Ministry data, there were at least 50,000 workers on furlough in June, without whom the people employed would number fewer than 3.7 million.

The number of the unemployed came to around 836,600 in June, according to ELSTAT.

Online