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Undeclared work in Greece is 30%

07 December 2012 / 20:12:46  GRReporter
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Undeclared work in Greece is 30% as shown by the results of a specialized study conducted by the Foundation for Economic and Industrial Research (IOBE). Analysts point out that it is directly related to the informal economy, the volume of which is estimated at almost 25% of GDP. The high unemployment and the changes in labour relations in the country facilitate the expansion of illegal work.

The National Statistics Office reports that the unemployment rate reached 26% in September 2012. These results rank Greece first in unemployment among the eurozone countries. Under these conditions, people more readily agree to work illegally without receiving health or pension insurance. In addition, experts say that people have very low confidence in the effectiveness of public administration and government activities.

The most significant reasons for the surge in black labour is considered not to be the cost of labour in the country, which has dropped by an average of 20% since the beginning of the crisis, but the rising costs of health and social security and the tax burden, which has been seriously increased.  Combined with the lack of effective control practices by the state this makes the phenomenon of undeclared work uncontrollable. The Foundation for Economic and Industrial Research emphasizes that the enterprises that do not declare their employees not only deprive the state budget and insurance funds from revenue, but exercise unfair competition as well.

The most frequent victims of undeclared work are the immigrants with invalid documents for stay and work in the country and the long-term unemployed, who have lost their place in the labour market. These social groups are not able to negotiate with the employers the terms of the work offered and it is not easy for them to defend their basic labour rights.

Meanwhile, the Union of Traders in Greece has announced that more than 68 thousand companies in the sector have closed over the last two years. The recession, the reduced monthly income of citizens and the high taxes are the main causes of mass bankruptcies. The number of officially registered unemployed from the commercial sector is almost 800 thousand. Of these, only 185 thousand are entitled to social benefits from the labour offices, which amount to 360 euro per month. The increasing unemployment in the second quarter of this year cost the insurance fund around four billion euro and the negative trend is expected to continue.

The workforce of Greece totals approximately 3.7 million people. In September, the number of unemployed reached 1.3 million people. The difficulties in the labour market make the people accept unfavourable conditions of undeclared work in order to secure some income during the year. The highest unemployment rate, 56%, is that among young people aged 24 followed by the age group between 25 and 34 years with 35%. In people of middle and retirement age, the problem of unemployment is not that serious. Analysts explain this phenomenon with the fact that the public sector remains the major employer in the country. Permanent service in public administration or public enterprises guarantees security that private sector employees cannot have.

Tags: EconomyMarketsUnemploymentUndeclared activity
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