Why the jobless rate falls

Official unemployment figures continue to paint a positive picture, with a consistent decline that included the third quarter this year: The jobless rate dropped from 7.9 percent in Q3 2007 to 7.2 percent. Yet this is not compatible with the lack of new jobs being created and the problems in the economy. The answer does not lie in some trick by the National Statistics Service (NSS), but in three paradoxical phenomena of the Greek labor market. Combined, they show that even in a climate of greater layoffs and the loss of full-time jobs, the drop in the jobless rate may well continue in the first half of 2009. These factors are the rise in flexible, low-paid types of work without social security coverage, mainly in the public sector and in the form of «work experience,» the allowances that the Manpower Organization (OAED) pays for the generation of short-term, self-employment jobs and the various aspects of gray economy. According to a recent European Commission report, some 40.7 percent of workers in Greece are self-employed, the second highest number in the European Union after Romania. The EU average stands at 16.6 percent. The definition of «unemployed» in Greece also affects the jobless rate: To the NSS, an unemployed person is someone who «has not worked a single hour during the week [that the survey is conducted], wants to find a job, is seeking work and is determined to become employed.» This does not take into account the vast changes in the labor market: Whether someone works for one hour in the legal job market or one day in the grey economy has exactly the same statistical value as a fully employed worker.

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