Repertoire: Flexible Labour Markets, Unemployment, and Trade Union Decline in Contemporary Greece

The first part of this paper briefly examines the merits of neo-classical arguments regarding the causes of the recent upsurge in Greek unemployment. It shows that the view according to which high unemployment in Greece is caused by high wages rests on a weak empirical foundation. Moreover, by examining features of the Greek labour market (especially the large and eminently ‘flexible ’ informal sector) it suggests that the experience of Greece casts doubt on the view that labour-market flexibility can serve as a cure to unemployment. The second, and major part, examines trade union decline. Unlike the situation in most European countries, rising unemployment has not affected the mobilizing capacity of the Greek labour movement. More than a century after its emergence, however, this movement has yet to overcome its historically embedded low trade-union density. This does not prevent the outbreak of militant strikes, but hampers their effectiveness. In recent years union leaders have attempted to address this problem by trying to curb the movement’s traditional penchant for confrontational action, in favour of a co-operative model of industrial relations. In the background of a weak and retrenching welfare state, however, this has led to concession bargaining which, instead of improving, has further worsened the problem of declining union credibility and density. The paper ends with some tentative suggestions on how to reverse this process