The Unemployment Nightmare in Greece

According to the Organization for Economic Cooperation and Development (OECD), Greek unemployment is nearing 14 percent… but on-the-ground accounts peg joblessness closer to 90 percent in some regions.

The Greek government belt-tightening, in the form of austerity measures, should bolster the long-term economic health of the nation. However, in the near term many regions are hard hit by the stalled economy, including a suburban dock area called “the zone.”

From Global Geopolitics & Political Economy:

“‘This is not the worst of days,’ [Makis Kistikidis, a steel worker] says. ‘Very often, there are no jobs at all. Many of these people haven’t had more than five or six days of work since the beginning of this year, and no more than 100 working days since 2008.’

“While public debate is Greece is focused on austerity measures to cut the country’s ballooning budget deficit, little attention has been paid to the societal impact of growing unemployment and how these harsh measures are squeezing salaries of ordinary citizens.

“The zone, once a strong industry employing over 5,000 people on a daily basis, is now a vivid example of Greece’s economic collapse. Its slow demise, as Kistikidis explains, began when the lure of cheap labour in China and the Far East propelled ship owners away from the shores of Greece.

“The global financial crisis in the last two years has slowed down commerce further. Unemployment has hit the workers very hard. ‘Today unemployment in the Zone is above 90 percent,’ says Kistikidis. ‘Check out the dates of registration in the unemployment list. You’ll see how many people are stuck here since the beginning of the year or even before that.'”

The article cites how increasing leverage in the hands of business owners has made severe punishment for worker mistakes more common. One boss, for example, imposed a hefty 100 euro fine on a baker who spoiled only several euros worth of cakes. After refusing to pay the fee, the baker was promptly fired and, no doubt, a replacement for his position quickly found.

The Greek Ministry of Labor is encouraging workers to have faith that the positive impact of austerity will materialize, but many Greeks appear to be losing hope. As to be expected, deleveraging isn’t a quick or easy process. You can read more details in Global Geopolitics & Political Economy coverage of Greek society cracking under harsh measures.


Rocky Vega,
The Daily Reckoning

The Daily Reckoning