ECONOMY

Proposal to slash unemployment

On Friday noon, yet another tragic news item from the labor front reached the newspaper. It was the fifth deadly incident this year. This one took place at a construction site, a hotel managed by the Daskalantonakis group. The victim was 40 years old, a Romanian citizen. We only learned his first name, Stelios. He was obviously hiding his real name because he was not insured. The fact that the subcontractors responsible for the works disappeared immediately confirms this. Now, if the proposals made last week by the leader-in-waiting of the ruling Panhellenic Socialist Movement (PASOK), George Papandreou, on the exemption of the first four years of work from social security contributions had already been adopted, then the subcontractors would have no reason to vanish. This is one side of the proposal, the one having to do with its ethical and social dimension. it is certain that Papandreou’s aides will provide a full proposal later, detailing how the state budget would cover the costs. ‘Participatory democracy’ However, the fact that PASOK’s new-leader-to-be, an enthusiastic proponent of «participatory democracy,» made no reference to youth sharing in the hard-won benefits of social security for the first years of their career shows the haste with which technocrats attempt to adapt policies already adopted in Europe, on a smaller scale and in the form of job experience programs, widely known as stages. These practices provide short-term relief from high unemployment but, in effect, legitimize starving the social security system from needed resources and point to job precariousness. There is, however, another side to the proposal, designed to appeal mostly to small- and medium-sized enterprises and the young. Which company would react negatively to a government proposal to hire people for four years without paying social security contributions equal to 16.37 percent of the gross wage, while making the commitment to rehire half of them? Few businesspeople would object, even if some found the obligation to hire back 50 percent of their original hirings as too interventionist in labor relations. Young people aged 18-25, eager to enter the job market and little worried about their pension, would also likely welcome the proposal. The response of two people hardly suspected of sympathizing with the present government is indicative. Nikos Analytis, vice president of the Federation of Greek Industries (SEV), places emphasis on the reduction in non-wage labor costs. «Is it possible to give someone something for 100 when it costs 130 and that someone to reject it?» he says. Economist Giorgos Romanias, scientific adviser to the Labor Institute operated by the General Confederation of Greek Labor, calls the proposal «cunning» and says it could help lower the unemployment rate, currently hovering around 9 percent, to at least 6 percent. He says that it could help combat the unemployment of high school and technical school graduates, among whom it is very high. An EU report recently published by the Employment and Social Affairs General Directorate, supervised by commissioner Anna Diamantopoulou, shows that the employment rate among youth aged 15-24 at only 26.5 percent, less than half most of EU countries. EU aid? Romanias estimates that the cost of subsidizing employers’ social security contributions would be 44 billion euros over four years. He says he is certain that Papandreou, before announcing the measure, discussed it with Diamantopoulou and has been assured of obtaining EU funds through the Third Community Support Framework to help finance it. Early estimates show that adopting the measure would help create at least 120,000 jobs. Similar proposals have already been applied in EU countries and the Commission looks at them favorably as pro-active employment policies.