ECONOMY

The coming changes imperil the current ‘social contract’

There are two ways to improve our income and standard of living (two non-identical concepts) if we exclude a technological revolution, which is not going to happen in this country. It is difficult enough for us to follow, and take advantage of, the current ones taking place in a globalized economy. One way is to increase what we produce – what we variously call our gross national product (GNP) or gross domestic product (GDP) – either by increasing productivity or by employing more people. The other way is by a redistribution of available and produced wealth, either through tax breaks and bonuses or through an increase in consumption. Recent experience shows that both ways are fraught with serious difficulties. Precisely because it is based on increased investment – initially by the private sector – in modernizing production and through the stock market and then by the public sector (thanks to the availability of funds from the European Union), the high GDP growth observed in recent years has not yet translated into serious productivity growth. Even if certain private sector industries have shown a significant increase in productivity, the public sector remains tradition-bound and at the mercy of political ties that deny it the benefits of higher productivity. In the coming years, a significant increase in disposable income will be the result of very serious, radical changes, of which the biggest will occur in the «social contract» that was consolidated in Greece in the period following the restoration of democracy in 1974. The inflationary boosting of income, through which, according to some people, our incomes will converge with the EU average, is quite simply one more national delusion. The great dilemma to which we must answer – and we are far from being the only ones in Europe facing it – is the choice between employment «security» and a «rational» wage system. The polarization in our society is already great and risks becoming dangerous if it is not resolved in a radical political fashion. We all know that in the competitive parts of the private sector, the demands on work volume, time and psychological commitment have expanded to an often unbearable extent. Changes are often made stealthily, since the official regulatory framework forbids them. Employees are obliged to adapt, either to achieve professional success or live up to the expectations of the dominant consumption model or simply in order to keep their jobs. The same is true for the numerous professionals whose work conditions keep getting more difficult, almost unbearable when they work with (not in) the public sector. Ask managers who have had to manage a badly prepared work force, which suffers either from a lack of ability or understanding of workplace discipline or both. Greece’s public sector is the one that mostly suffers from a lack of progress, corruption and the tyranny of politically backward, party-based, state-fed unions, used, especially since the 1990s, to having a veto on decisions. The Greek «social contract» is endangered by a fall in households’ consumption capacity combined with the expected downward revision in property prices. Our lack of foresight in managing the transition to the euro may turn what should have been an advantage – a hard currency and low interest rates – into a curse.