ECONOMY

ILO report warns Greece of prolonged social crisis unless steps are taken in employment

The International Labor Organization this week warned that Greece faces a prolonged social crisis unless steps are taken to improve the “anemic” pace of job creation.

In a report titled “Productive Jobs for Greece” published on Monday, the Geneva-based organization cited figures suggesting that 70 percent of the country’s almost 1.3 million unemployed have been out of a job for more than a year and that the number of Greeks facing poverty has grown from 20 percent in 2008 to over 44 percent in 2013, to urge measures boosting employment.

“Greece is at a critical juncture and to set the country on a sustainable recovery path, urgent measures to support people and firms are needed. Such measures should be defined in a tripartite setting bringing together government, employers and workers,” ILO Director-General Guy Ryder said in the report.

“The structural challenges of the Greek economy still remain and need to be addressed through more profound initiatives than hitherto taken,” Ryder said. “The overarching goal is to fight high unemployment, while addressing the needs of the most vulnerable.”

The report goes on to note that the policy being pursued – ie boosting competitiveness through lower wages and fiscal consolidation – is flawed, adding that while it has helped restore public finances it “has not achieved the expected results in terms of a sustainable economic and employment recovery.”

The ILO suggests five long-term policy measures:

* Broadening the economic base by facilitating the expansion of sustainable enterprises, boosting the linkages between tourism and agro-food, and fostering employment-enhancing investments;

* Tackling undeclared work and working poverty through a broader tax base and improved incentives for low-paid work while shifting the tax burden away from labor, small firms and consumption of basic needs towards other bases like property. This, along with much-needed mobilization of the resources of the European Investment Bank, would also widen the policy space for the growth and employment strategy;

* Ensuring adequate coverage of the social protection system;

* Enhancing human capital by designing skill programs in partnership with firms, workers and education providers; leveraging further apprenticeships and work-related experience for youth; and reinforcing public employment services and active labor market programs;

* Rebuilding social dialogue between government, employers and workers and addressing fragmentation of collective bargaining and gaps in coverage, so as to nurture a balanced recovery.