April 25, 2024

Work below cost | eKathimerini.com

Work below cost

The upgrading of the Greek economy and Greek banks has led to a de-escalation of spreads in recent weeks; notably the corresponding Tier II issued by National Bank in 2019 with an interest rate of 8.25% is currently priced at close to 5.29% from 5.60% two weeks ago and 7% last July.

How strong is the Greek economy, really? Whatever may have been said, there are some safe criteria by which to assess its state. It is only as strong as the labor market, the jobs created and the wages offered. 

Regarding the first, we have the second highest unemployment among the 27 members of the European Union. As for the second, data published last Tuesday from the Labor Ministry’s Ergani database that monitors hirings were very revealing: About a third of salaried employees are only paid 800 euros or less per month (gross, not net). A total of 53% have a gross salary of 1,000 euros or less, and only 10% of them have a gross salary of more than 2,000 euros. What does this mean?

It means that the Greek economy is massively producing the new poor. People who are poor not because they are unemployed, but because they work in low-paying jobs, which dominate the labor market and are widely reproduced. Among them are young men and women of the best educated generation that our country has ever had. Tens of thousands of qualified people aged between 30 and 40, with good studies, master’s degrees and doctorates have to work for starvation wages in the private sector, in universities and hospitals.

I agree with those who argue that the loss of 500,000 young brains from the country is not that big. If the laws of supply and demand operated unhindered by geographic and social constraints, many more would have left – and more are certain to leave. Because in Greece, the economic model supported by powerful political and social forces, and still lingering today, is the model of cheap wage labor: with low wages and low-cost social services, wage labor tends to be priced significantly below the cost of reproduction. This is insupportable – especially when there is a lot of money and excessive consumption going around at the same time.

It was thanks to the devaluation of labor that the competitiveness of the Greek economy improved in the years of the deep debt crisis – and it bore the heaviest burden. And it was this devaluation that many of what seem to be great achievements are based on today. The only categories of exports with appreciable growth are essentially those of labor-intensive industries (agricultural products and tourism services), because labor is cheaper. As far as the much-vaunted foreign investments are concerned, the vast majority of them are speculators in real estate and the bad debt market who come to Greece to exploit cheap labor, like data centers, for which we roll out a red carpet, while other European countries have expelled them.

What is new in recent years is that a very large redistribution of wealth and power is taking place. Cheap labor becomes cheaper because of the explosive rise in prices. The purchasing power of wages is dissipating, as there is no strong polity and no significant union power to support wage labor, while business profits, overt and undeclared, are growing at impressive rates. The most impressive of all is that this redistribution of wealth takes place almost without any resistance.

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