Greece’s labor market is producing better headline numbers, but for many young Greeks the recovery looks far less impressive from behind a paycheck.
Youth unemployment has fallen sharply from the extraordinary levels reached during the debt crisis, while the share of young people outside employment, education or training has roughly halved over the past decade. Yet those gains conceal a deeper problem: Greece is creating jobs without creating enough good jobs.
A study by Germany’s Friedrich Ebert Foundation, or FES, describes a labor market caught in a double mismatch. Greece produces large numbers of highly educated young people, but its economy struggles to absorb their qualifications. At the same time, many available jobs offer wages, security and career prospects insufficient to support an independent middle-class life.
ΔΙΑΒΑΣΤΕ ΕΠΙΣΗΣ
The problem, therefore, isn't simply a shortage of skills or excessive expectations among younger workers. Real wages remain well below the European Union average, while inflation and rising housing, energy and food costs have eroded purchasing power. Minimum-wage increases have provided relief, but have largely compensated for lost purchasing power rather than delivered a significant improvement in living standards.
Wage compression compounds the problem. Pay for university graduates and skilled employees can sit relatively close to the minimum wage, weakening the financial return on education and specialization. The result is an expanding class of workers who have jobs but still struggle to cover basic expenses.
Employment conditions remain another weakness. Part-time work, fixed-term contracts and other flexible arrangements are widespread, while collective bargaining remains limited. FES estimates that collective agreements cover less than roughly 25% to 30% of workers, far below the European Union’s 80% benchmark for promoting collective-bargaining coverage.
Brain Drain
The deeper issue is Greece’s economic structure. Tourism, hospitality and retail remain major engines of employment, but tend to generate large numbers of seasonal and relatively low-paid positions. Technology, advanced manufacturing, research and other higher-value industries haven't expanded fast enough to absorb Greece’s educated workforce.
That helps explain why the country can simultaneously experience labor shortages and brain drain. Employers can struggle to recruit workers in tourism while engineers, researchers and other professionals look abroad for better-paid careers.
For Greece, the danger is self-reinforcing: the country educates skilled workers who then contribute their most productive years to other economies. Reducing unemployment was the first stage of Greece’s post-crisis recovery. The next will be harder. It requires stronger collective bargaining, better enforcement of labor rules and, above all, investment capable of shifting the economy toward higher-productivity industries.
The question facing Greece is no longer simply whether its young people can find work. It is whether they can find work worth staying for.
