Even in hi-tech firms, employment is falling

Eurostat figures show the sectors of hi-technology manufacturing in Greece to be saturated in staff absorption, although on the face of it these sectors appear to enjoy high rates of employment. A closer analysis reveals that the high employment rates involve specific domains, mainly knowledge-intensive, in the service sector. However in other domains of hi-tech manufacturing, employment has dropped by around 2 percent annually in recent years. High-level officials at Greek companies agree that there is only scope for absorbing employees in the high-technology service sector. In hi-tech manufacturing and knowledge-intensive companies there has been great demand, but today there is saturation and a trend toward reduction of working staff due to the low returns of equities. The situation is even worse outside Athens, where 40 percent of salary workers live and work, unlike in the other European countries where there is a low but steady flow of employees outside the main cities, mainly in knowledge-intensive firms. In the rest of Europe as well, although the average unemployment rate remains at 8.3 percent, Eurostat discerns signs of saturation in sectors that have shown satisfactory absorption rates. A recent survey has found that 130 million Europeans work in the service sector (66.9 percent of all workers) against just 36 million in manufacturing. Employment in manufacturing dropped in the old EU-15 by 1.2 percent per year in the 1999-2004 period, and by 2 percent annually in the hi-tech sector. Greece, along with several other EU members, has failed to raise hi-tech sector employment above 1 percent of all employees. Long-term drop Greece’s unemployment fell to 9.8 percent in the second quarter of 2005 from 10.4 percent in the same period in 2004 according to Eurostat. The same source suggests that long-term unemployment in Greece has declined marginally but remains among the highest in the EU. The problem is greater among women, where unemployment comes to 15.3 percent against just 5.9 percent in men. Greece in Q2 last year had 465,000 registered unemployed, from which 250,000 were long-term unemployed, that is those who had unsuccessfully sought a job for at least 12 months. Over the same period the percentage of employable people out of the whole population between 15 and 64 years old in Greece rose from 66.5 percent in 2004 to 66.8 percent in 2005, which of course is good news for the social insurance system. Working men outnumber working women by far, with 74.5 percent of men being employed against 46.2 percent of women. Overall, 60.3 percent of Greeks between 15 and 64 work, while the EU-25 average stands at 63.7 percent, broken down into 71.2 percent of men and 56.3 percent of women. Just 4.8 percent of Greeks work part time, against 18.5 percent in the EU as a whole. Understandably, women opt more for part-time jobs (9.1 percent) than men (2.1 percent). In Europe, 32.5 percent of women and 7.3 percent of men are part-timers. Self-employed to survive The risk of unemployment, with its multiple economic, social and psychological effects, has led many Greeks down the road of self-employment and entrepreneurship. According to Alpha Bank, self-employment is particularly common in Greece, reaching about 40.2 percent of the work force in Greece against just 15.6 percent in the EU-25. This helps explain the thousands of medium-sized, small and very small enterprises (SME) in this country which are fighting to survive. That is not easy either. SME entrepreneurs appear pessimistic and believe there is no room for new SMEs in Greece, while quite a few of them dream of a job in the public sector. A local market survey on the competitiveness of SMEs conducted in December found that one in every three entrepreneurs would rather have a job in the public sector and another one in 10 a job in the private sector. About 47 percent of entrepreneurs believe the current conditions of competition do not leave any room for more SMEs. Finally, 49.3 percent of entrepreneurs say they are not at all optimistic about the future of their own enterprise. Inflexibility in the Greek labor market is the main reason for unemployment in Greece, Alpha Bank argues. The factors behind this are: High minimum salaries and very high non-salary labor costs, which render virtually prohibitive the employment of new entrants in the labor market; the job-for-life status of public sector employees and the high cost of compensation for layoffs; and labor mobility from sector to sector, from company to company and from region to region, which is very small, while the degree of flexibility in working hours and part-time employment is minimal.

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