Only 40,000 new jobs are needed to bring the unemployment rate below the 10 percent mark. It will be an event that sparks a lot of debate about the creation of a minimum wage as a “hunted” 2012 memorandum law that banned seniority-based increases in the minimum wage until unemployment falls to single digits is pulled off the shelves. .

The crudely written 2012 memorandum law leaves many questions unanswered for the next government, under whose authority this issue should be resolved. Should the 10% return be made on a monthly basis – which means there could still be weeks or months before the “milestone” – or on an annualized basis, which certainly takes us a little further back in time?

Retrospective or not?

Will the three-year catch-up be retroactive, meaning hundreds of thousands of workers hired since 2012 should automatically get a 30% raise? Will the risk that a sharp increase in wage costs lead to job losses and a return to double-digit unemployment be measured, and how? And, finally, if unemployment falls to single digits, but a new period of its growth sets in, will we not again experience a “freeze” of growth, that is, a “revival” of the memorandum law?

In 2012, when the so-called three-year freeze was voted on, unemployment was 27.5%. This means that the number of employed has fallen – the January 2013 reveal – to 3.56 million, while the number of unemployed has risen sharply to 1.33 million. fall below 500,000. The downward trend in the unemployment rate began in 2015, falling below 20% for the first time in early 2019, and early last week ELSTAT announced that the monthly unemployment rate fell below 11% for the first time since 2009. fewer unemployed (502,000) than in January 2004, a few months before the Olympics. Why did we have such a noticeable drop in unemployment? One reason was improved economic conditions (recovery of GDP, job creation, hiring incentives), another was keeping wages low, and a third (negative but significant) reduction in the workforce.

The sum of employed and unemployed in 2010 amounted to 5 million people, and the unemployment rate at the beginning of the memorandum was 11.1%. Today we have fewer unemployed than in 2010 (502,000 against 557,000 in January 2010), but the number of employed has clearly decreased: only 4,145,000 people. Or more simply: we have lower unemployment than in 2010, in percentage terms, but a much smaller number of people employed. Cause; Dramatic population decline and brain drain, as throughout this period there were more deaths in Greece than births.

Retreat from unemployment

Whether unemployment falls below 10% in the next period of time is obviously judged on the basis of current labor force data. With almost 460,000 unemployed (up from 502,000 in January 2023), unemployment is in single digits. The goal is considered achievable from the moment when, in addition to the prospects for the development of the Greek economy and the next period of time, we also have a number of subsidized programs to create new jobs. With regard to the three-year issue, the decisions will obviously be taken by the next government. The economic impact will be very large – as hundreds of thousands of employees have worked three years between 2012 (when the “freeze” occurred) and now – and this will require extensive dialogue before final decisions are made, given that 3 years will also apply to the new increased minimum wage. which will come into effect on 1 April. In practice, this means that thousands of workers will have to receive – if the measure is applied retroactively – even more than 1,000 euros in total. A three-year unfreeze will almost certainly come into effect once ELSTAT registers a single-digit unemployment rate for the entire year, rather than a month. This means that there should be less than 460,000 unemployed for a full twelve months.

New “freeze”

Regarding the possibility of a new three-year “freeze” in the event of a new increase in unemployment, experts on the topic note that such a forecast does not appear anywhere. As for the retroactive force, the “front” will be very large. If the right to a seniority increase is not recognized retroactively, someone who has been working continuously since 2012 and someone who first enters work in 2024 will have the same salary.