Tackling our high unemployment rate
There is an explanation for the fact that the Greek economy has the second-highest growth rate of the countries in the eurozone while also having the highest rate of unemployment. High growth rates are based on a significant increase in consumption (which, in turn, is based on credit expansion) and primarily on a high level of construction activity. Construction activity creates job opportunities but these do not correspond to the skills and aims of the Greek labor force, which explains the prolonged residence of economic migrants. The growth of our economy produces jobs that Greek workers do not favor. On the other hand, when it comes to highly specialized sectors, there is a discrepancy between young people’s education and market demand; tertiary education does not prepare them to meet the demands of the job market. Indeed, it seems that our universities and colleges are issuing young people with certificates that testify to a broad education but fail to get them a job. Moreover, the fact that unemployed citizens are remaining jobless for longer shows that efforts to re-educate the jobless have failed. But the biggest problem is with the inflexibilities of Greece’s labor market. The draconian legislation governing the labor market is a disincentive to employers. No businessman will go ahead with hirings when the law essentially prevents him from using labor resources to benefit his enterprise to as great an extent as possible. Statistics show that countries with the most flexible labor relations (such as the USA, Ireland and Britain) have the lowest unemployment indicators. Statistics also show that, in contrast to the rest of Europe, Greece has a problem with structural unemployment. Such a serious problem cannot be solved with half-measures; it needs a comprehensive plan, including changes to labor legislation and higher education as well as policies to attract investors who would create new jobs.
