Employers debate challenge of employment

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In February 2001, Greece's SEV employers' federation held a seminar on "the challenge of employment". With Greek unemployment - in contrast to most other EU Member States - still rising, the employers examined the current situation and prospects and drew up a set of proposals on issues such as: stimulating economic growth to create new jobs; modernising the labour market; improving the quality and quantity of labour; and ensuring social cohesion and reintegration for unemployed people.

On 28 February 2001, the Federation of Greek Industries (SEV) held a seminar entitled The challenge of employment, aimed at analysing the problem of employment/unemployment and drawing up proposals that could improve the performance of the Greek economy. According to the employers' organisation, the context is that, within the framework of current economic developments, employment has come to the fore at both the European and the national level as a major issue requiring a more meaningful approach that will enable the business community and industrial relations system to respond to the new economic conditions. SEV sees holding such seminars as part of its commitment to being responsibly and effectively involved in economic and labour activities taking place in Greece.

At the February seminar, the participants sought to investigate the issue of employment in the light of competitiveness and development, and of education and training, and to examine employment developments and prospects at the national and European levels. Below, we summarise the main findings and proposals of the seminar.

Situation, prospects and challenges

Despite relatively high growth rates in recent years, the Greek economy has deviated from the economies of the other European Union countries in one important area, that of unemployment, which has continued to increase in Greece while falling in most other Member States. This has led to the need for direct measures and the promotion of structural changes in the short term, found the SEV seminar. To absorb the rapidly growing labour force and begin to reduce unemployment, it is necessary to create viable, productive jobs at a rate faster than the rate of increase of the labour force; in other words, there is a need for more rapid growth, in the employers' view.

However, such a development cannot take place without competitive enterprises operating in the framework of a much more competitive state. Therefore it is imperative that the country expands its economic activity, though this activity must be based on investments that have been attracted by productivity and competitiveness, the seminar concluded.

It should also be understood that rapid economic growth is a necessary, but not sufficient, condition for increasing employment. Today's labour market continues to suffer from severe malfunctions, which create discrepancies between supply and demand and are therefore also responsible for unemployment to a great extent. So, for growth to be translated into new jobs, the labour market must function in a way that facilitates a balance between supply and demand, both quantitatively and qualitatively, participants stated.

Particularly with regard to the qualitative aspect, it was commonly believed by those attending the seminar that the quality of the labour force must be improved. The problem of unemployment is made even more difficult in Greece because the system of training and education cannot meet the needs of the "new economy" and fails to equip the labour force with the knowledge and skills demanded by the new technologies and the new organisation of the economy. A many-sided development of knowledge and skills in the labour force is therefore a necessary precondition both for enterprises and for each individual worker effectively to meet future needs.

From these findings, the seminar concluded that the question of employment is a complex problem requiring complex solutions. To deal with it effectively, it is not enough to take piecemeal measures based on political rather than rational criteria. An overall strategy is needed which is aimed at all aspects of the problem, as follows:

• demand for labour - in other words, how to create new jobs through growth;
• supply of labour - that is, methods that will permit enhancement of the quality of the labour force, and increase its size;
• the functioning of the labour market, where supply and demand meet; and
• the creation of an effective network of social cohesion and reintegration for unemployed people.

Finally, it is stressed that, in order to be effective, this policy should seek to create appropriate bodies to undertake its implementation.

The seminar concluded by making proposals in a number of areas, as set out below.

Growth and new jobs

In terms of stimulating economic growth in order to create new jobs, it is primarily necessary to remove the current obstacles to new investment, attract foreign investment, create new enterprises and reduce costs. To do this, according to the seminar's conclusions, it is necessary to:

• reform the system of taxation, aiming for simplification, transparency, stability and reduction of the tax burden on workers and enterprises;
• open up all markets to competition and abolish state monopolies. This will not only have beneficial effects on production costs and therefore on competition as a whole, but will also have a direct impact on employment, since activation of private enterprises in sectors that have heretofore been closed will create new jobs;
• improve radically the institutional environment in which enterprises operate, by simplifying procedures and doing away with many unnecessary laws;
• step up privatisations and thereby free healthy enterprises from the restrictions of the public sector by creating a dynamic of faster development in the sector and at the same time reducing the amount of public funds wasted; and
• reduce labour costs by reducing employers' social security contributions, within the framework of an overall reform of the social insurance system.

Labour market modernisation

The labour market in Greece operates within institutional frameworks which were created and made statutory in bygone times, claimed the seminar participants. Nowadays these frameworks act as an obstacle to employment, as they prevent the market from adapting rapidly to the demands of a modern internationalised economy open to competition. The labour market must be modernised. The following are required:

• a substantial improvement in the information available in the labour market both to job seekers and to enterprises with job vacancies. In this area, restructuring of the Labour Force Employment Organisation (OAED) is an absolute priority; and
• modernisation of the labour market through measures to enhance the flexibility of enterprises and give workers a sense of security. Consequently, new regulations are needed to remedy existing inflexibilities, such as opening up closed occupations, increasing the geographical mobility of the labour force by providing incentives to cover the cost of relocation, encouraging mobility between specialities and between occupations, and deregulation of the operating hours of enterprises.

Improving quality and supply of labour

In view of the changes taking place, education and training systems must be adapted accordingly. The main areas in which changes are required are:

• introducing elements of flexibility and adaptability that will allow education systems to change rapidly and on their own initiative. This can be achieved by introducing new elements of competition and rivalry and by establishing the autonomy of educational institutions within a broader competitive operating framework at all levels of education;
• creating conditions that will allow the knowledge-based content of educational services to adapt constantly to the changing situation;
• creating a positive attitude to labour and competitiveness in the education system;
• recognising the needs of the economy as a decisive factor in creating educational services; and
• encouraging attempts by enterprises to enhance the knowledge of their workforce.

Social cohesion and reintegration

Competitive development is the answer to the question of unemployment, say the employers, but its effects on employment will not be immediate. Society cannot be indifferent to the serious problem of the existence of a great number of unemployed people. That is why it is necessary, in parallel with development, to create a network of social cohesion to support those who cannot be rapidly reintegrated into the process of production.

Commentary

At the February seminar, SEV attempted to look at the issue of employment and unemployment from many sides. When its work was finished, the basic conclusion of all participants was that employment policy must be created through the participation on an equal standing of all the parties involved - workers, employers and the state - in the framework of a broad social dialogue with clear objectives and clear terms of implementation.

Social dialogue is the most appropriate means of addressing the complex, thorny problems of current times in a way that ensures flexibility of enterprises on the one hand and job security on the other. These two conditions constitute the prerequisite for continuing to improve the economic and social climate as well as infrastructures, in order to achieve better competitiveness, increased employment and a higher standard of living. (Anastasia Koutsivitou, SEV)