As we go through the second lockdown to mitigate the spread of Covid-19, it is important to remember the experience of the previous round of restrictive measures in the labor market, both in Greece and in other European countries.
This experience has shown that not all types of workers are affected equally. In most European countries, full-time workers are more likely to keep their jobs, switch to telework, or enter short-time working schemes that allow them to retain a significant part of their salary and their job. Consequently, these workers can save up more, as restrictive measures reduce consumption significantly as well. Conversely, a portion of employees engages in less typical forms of work (including temporary workers, contract workers, artists, seasonal workers, and others), or is self-employed. These workers are more exposed to restrictive measures, as they have limited access to the social safety net, a more complicated process of joining unemployment insurance, and it is technically difficult for them to join short-time employment schemes. Therefore, the probability of losing part of their income due to reduced work is increased and their economic standing is more vulnerable.
What is the prevalence of informal employment in European countries and what is the extent of self-employment? The chart shows two relevant OECD indicators for 2019: the share of the self-employed in total employment (blue bars) and the share of short-term contract workers in total dependent employment (red bars). As shown in the diagram, the share of self-employed in Greece exceeds 30% and is the largest observed in Europe. Greece is followed by Italy (23.7%), Poland (20%) and Portugal (17%). Regarding the share of employees working under a temporary contract, Spain comes first (26%), followed by Poland (21%) and Portugal (20.8%). Greece is in the middle of the ranking as only 12.5% of employees work on temporary contracts. These shares reflect to some extent the vulnerability of the labor market to social distancing measures in each country.
It is important to emphasize that there is a significant number of employees, whose employment falls between the categories of standard and non-standard employment and who are not always recorded in the above indicators, such as employees on electronic platforms (uber, Airbnb, etc.), certain categories of seasonal workers, but also full-time employees who are systematically dismissed and re-employed in agreement with their company. Finally, there is a significant share of workers, especially in Greece, who work in the ‘shadow economy’ and cannot benefit from the welfare measures that have been activated to mitigate the impact of the pandemic on the labor market.