MacroPolis

The Greek government’s economic narrative, built around growth that exceeds 2 pct and unemployment in single digits for the first time since the debt crisis, continues to be tested by non-headline data and the everyday reality faced by most Greek households.

Last month, the European Commission and the Council published the joint employment report for the EU, measuring member states against 17 metrics, grouped in three broad categories, equal opportunities, fair working conditions and social protection and inclusion. 

For Greece, nine indicators were flagged as "critical" or "to watch," suggesting the country faces potential risks to upward social convergence, warranting deeper analysis. 

The report argues that Greece is grappling with significant social and economic challenges amid high inflation and reduced social spending relative to GDP. Key indicators highlight a "critical situation" in social protection and inclusion. Poverty reduction through social transfers (excluding pensions) fell to 18.2 pct, 16.5 percentage points (pps) below the EU average. While the share of people at risk of poverty or social exclusion remained stable at 26.1 pct, it is still higher than the EU average of 21.3 pct. 

Housing cost overburden rose to 28.5 pct, one of the highest in the EU, and unmet medical needs surged to 11.6 pct, far exceeding the EU average of 2.4 pct. Child poverty (28.1 pct) and income inequality (5.3 income quintile ratio) remain high, signalling areas "to watch."

The labour market faces challenges, particularly for women and youth. Despite a 1.1 pps increase in the employment rate to 67.4 pct, it remains well below the EU average of 75.3 pct.

At 57.6 pct, the employment rate for women is among the lowest in the EU, with a significant gender gap of 19.8 pps. Youth not in employment, education, or training (NEET) rose to 15.9 pct, above the EU average of 11.2 pct. While gross disposable household income improved slightly to 81.6 pct of the EU average, it remains among the lowest.

Skills development is critical for Greece’s digital and green transitions, but adult participation in learning dropped to 15.1 pct, one of the lowest in the EU. Basic digital skills (52.4 pct) are near the EU average, but basic skills overall are among the weakest. On a positive note, early school leavers decreased to 3.7 pct, well below the EU average of 9.5 pct, making Greece a "best performer" in this area.

In the run up to the latest round of consultations for the new minimum wage, some troubling data was brought up in the public debate, mostly from the research arm of Greece’s largest union, GSEE.

The data from a GSEE survey shows that one third of Greek households must allocate more than 40 pct of their income to housing, which jumps to 85 pct for the poorest households. This places Greece among the worst in the EU. Rents take up 40.5 pct of incomes, fourth highest in the EU and 23.7 pct for homeowners, the highest in the EU.

Analysis of the wages data for 2023 shows that, based on last year’s minimum wage of 780 euros, 31 pct of workers - or 710,000 people in total - earn up to 800 euros. Some 23 pct of workers are earning between 800 and 1,000 euros, and another 16 pct in the next bracket up to 1,200 euros. This shows that there is a hard ceiling for earnings in Greece at 1,200 euros. Seventy pct of workers earn below that level.

This reflects largely the structural issues of the economy and the labour market as the share of jobs in the secondary sector dropped by almost 5 points to 16.7 pct, whereas services-related jobs have jumped to 73.1 pct of the total. At the same time, high value-added jobs with high skills like technology stand at just 3.4 pct.

INE GSEE and the Union of Working Consumers (EEKE), presented research that shows one in four people in urban areas and one in three in rural areas live at risk of poverty and social exclusion. Price levels on basic goods over the last two years have gone up by 65 pct, which pushes the poverty rate to more than 30 pct, when the EU average is 21.4 pct. This comes to reaffirm the latest OECD report where Greece has the third worst real wage in 35 OECD countries. 

Given these challenging conditions for Greek households, it is no surprise that opinion polls repeatedly indicate that most Greeks do not feel their personal financial situation has improved over the last few years, almost six in ten believe that the economy is moving in the wrong direction and the economy along with the cost of living are by far the biggest issues of concern.