EU wants lower taxes on labor

BRUSSELS – Low wages and the related issue of high deductions, along with the permanent problem of unemployment, are the main factors leading Greeks into moonlighting, or unregistered work, according to a Eurobarometer poll released by the European Commission in Brussels yesterday. To be sure, there are no indisputable data about unregistered labor, given the nature of the phenomenon. The last such study in Greece dates back to 1998 and it estimated that moonlighting accounted for at least 20 percent of the country’s gross domestic product, the highest in Europe. A poll such as the one whose results were released yesterday of course has its own peculiarities, the main difficulty being eliciting honest answers. And so only 4 percent of Greeks and an average of 5 percent of European Union citizens admit to having worked in the last 12 months without paying the corresponding taxes and social security contributions. But the European Commission accepts that such low rates are unlikely to reflect reality. In the poll, the Danes appear the least law-abiding, with 18 percent, and the Cypriots the most legal, with 2 percent. Rather incongruously, but not surprisingly, 47 percent of Greek respondents replied affirmatively to the question of whether they knew anyone who had engaged in unregistered work, against an average of 38 percent in the rest of the EU. The Dutch topped the list with 66 percent, with the Danes second on 65 percent. Additionally, 17 percent of Greeks, 11 percent of Europeans on average, 27 percent of Danes and Dutch, and only 2 percent of Cypriots admitted to having received or bought goods and services on the black market. In general, such transactions involve both small sums, less than -50, and large sums, of more than -500. The sectors in which this mostly happens are retail (22 percent), household services (17 percent), construction (16 percent), repairs of all types (11 percent) and personal services, such as hairdressing and private tuition (8 percent). Responding to the question of why one engages in under-the-table employment, 30 percent of Greeks said it was due to the low wages, 12 percent due to high taxes, 23 percent blamed the state for lack of effective control and 11 percent unemployment and the lack of a lawful alternative. On the basis of the results of the survey, the Commission presented a batch of proposals for dealing with the phenomenon which would hurt all government budgets. The first such proposal is the reduction of taxes on labor, followed by deregulation of the labor market (including encouraging migration and the so-called «flexisecurity») and administrative measures, including the improved coordination of workplace inspections.