One in every three private sector workers has found themselves out of a job since the start of the crisis, while salaries have gone down by 22 percent and are expected to shrink another 6 percent in 2013, according to a National Bank report published on Thursday.
While employment has declined sharply and salaries have been slashed, prices have not dropped in tandem and are only seen falling 5 percent over the next couple of years.
The study on the Greek economy and the impact of the adjustment program on it concludes that the economy’s reaction to the austerity measures was slow in the first year, 2010, and it was only in the following year that the results of the policy applied started to become apparent.
It applauds the “significant and often underestimated progress recorded in the first part of the strategy of internal devaluation,” which concerns labor costs.
Attributed to the front-loaded application of fiscal measures and the uncertainty over the country’s future course, the economic contraction is expected to add up to 21 percent by the end of this year (2.9 percent in 2009, 4.8 percent in 2010, 7.1 percent last year and 6.7 percent this year), with another 4.7 percent anticipated in 2013.
In this context, after a slow start in 2010, the adjustment of the labor market “was exceptionally violent in 2011 and 2012,” according to the bank’s analysts, who estimate that over the course of just three years the unemployment rate has risen by about 16 percentage points, with total jobs lost exceeding 750,000, or over 17 percent of the work force.
Crucially, given the near-zero layoffs in the broader public sector and the very low unemployment rate among the self-employed, the report concludes that “the unemployment level among salary workers in the private sector stands at 33 percent.”