Greeks work longer hours than any other Europeans, are paid less, and businesses still struggle to find staff with the right skills.
This is the picture painted by the European Commission of the Greek labor market, highlighting the deep structural weaknesses that continue to keep the country from reaching the levels of productivity, income, and competitiveness of the developed economies of the European Union.
Despite the ongoing decline in unemployment and the rise in employment, Greece continues to have some of the lowest average wages in the EU, while workers log the highest weekly working hours, averaging 41 hours.
At the same time, the quality of employment remains problematic: over 40% of workers work on weekends, more than one in three work evening shifts, and temporary and part-time employment continue to be largely not a choice for workers but a necessity.
Nearly half of workers on fixed-term contracts say they do not want this type of employment, while job insecurity remains widespread.
At the same time, the country ranks among the worst performers in Europe in terms of matching skills with the needs of the economy. According to Cedefop’s European Skills Barometer, Greece ranks 30th out of 31 countries in terms of matching skills to job vacancies, 28th in terms of skills development, and 27th in terms of skills activation.
Adult participation in lifelong learning remains low, digital skills lag significantly behind the European average, and the system for forecasting labor market needs is inadequate.
The result is an economy that is unable to fully utilize its human capital. About eight in ten businesses report that the inability to find skilled workers is a serious obstacle to new investment, while labor shortages are now evident in critical sectors, ranging from tourism and construction to technology and scientific fields.
The weaknesses
For the Commission, these weaknesses constitute one of the main reasons why the Greek economy continues to lag in productivity and struggles to converge with Europe’s more developed economies.
Specifically, the Commission acknowledges improvements in key employment indicators, but at the same time points out that the country continues to base its growth more on labor intensification than on productivity growth.
The Commission notes that labor productivity in Greece stands at just 54.6% of the EU average, while Greek workers log the highest number of working hours per employee among member states.
According to Brussels, this reflects a development model that continues to rely on the quantity of work rather than its efficiency. Particular emphasis is placed on the skills gap, as it is noted that the education system does not provide the knowledge and skills sought by businesses, while adult participation in training programs remains low.
As a result, approximately 80% of businesses report that the lack of skilled personnel is a significant barrier to new investments.
Skills
At the same time, Greece ranks among the lowest in Europe in terms of matching skills with job openings, a fact that weighs on the economy’s competitiveness. Brussels also notes that the country continues to have one of the highest rates of overqualification in the European Union, as approximately one in three workers is employed in a position that requires lower qualifications than they possess.
Demographic decline is also a major cause for concern. According to the Commission’s projections, the working-age population is expected to decline by about one-third by 2070, further limiting the availability of labor.
This trend is expected to exacerbate already evident labor shortages in sectors such as tourism, construction, and technical trades, while placing a particularly heavy burden on regional areas facing sharp population decline.
Women and Young People
At the same time, it is noted that, despite the positive steps taken in the employment sector, our country continues to have one of the largest gender employment gaps in the EU. The employment rate for women lags 17.4 percentage points behind that of men, with the Commission attributing the problem primarily to shortages in childcare and eldercare services.
At the same time, young people face difficulties entering the labor market. Employment rates for young people and recent graduates remain significantly lower than the European average, while regional disparities remain pronounced.
Wages and Convergence
The Commission directly links productivity to the quality of employment. Despite wage increases in recent years, average earnings remain among the lowest in Europe, while workers have some of the highest levels of weekly employment.
A significant proportion of workers are employed in temporary or precarious forms of work, often against their will, while undeclared and under-declared work remains a structural problem.
In practice, and despite the Commission’s positive assessments of the Greek economy’s trajectory, there is a major caveat: the decline in unemployment and positive growth rates are not sufficient on their own to ensure the long-term convergence of the Greek economy with the most developed EU countries.
The Commission believes that Greece should accelerate reforms in education, vocational training, the labor market, and family support policies to increase productivity, reduce skill shortages, and make better use of available human capital.
Otherwise, chronic labor market weaknesses risk becoming a permanent obstacle to the country’s efforts to catch up with the levels of prosperity and competitiveness of Europe’s most advanced economies.