The bell «tolls» for new unemployed «armies»

The increase of indirect taxes and especially of VAT (from 11 to 13%) will further intensify the recession of the Greek economy, with direct impact on job losses and soaring unemployment.
 
The consequences of this economic policy would adversely affect the revenue of the state, as it will dangerously shrink its tax base. In contrast, a VAT reduction even of 1%, would offer more both in terms of preserving people’s jobs and improving the mood of the market.

So says the statement of the General Confederation of Professional Craftsmen and Traders of Greece, expressing its position on employment and unemployment.
 
It reminds us that recently, August 2010, the Hellenic Statistical Authority published the Labor Force Survey with data on employment and unemployment. This data demonstrates a significant increase in unemployment, from 9% to 12.2% compared to August 2009 (a growth rate of around 38%).
 
More specifically, between August 2009 – August 2010, the number of employed individuals decreased by 165,356 as compared to July 2010 figures (a 40,406 decrease). This shows that the increase of unemployment is progressively more and more due not only to new entries to the market, but job losses as well.
 
This trend, as noted by the Confederation, was anticipated by their last research, according to which for the second semester of 2010, it was estimated that 120,000 jobs would be lost.
 

If this trend continues though, it is very likely that the loss will exceed 120,000 and perhaps reach the 200,000 mark in salaried jobs and the 300,000 mark concerning jobs on total employment (employees, self-employed, employers), as assessed by the Confederation’s research presented in August 2010.
 
In addition, this is quite clear from the continued rise of the unemployment rate in the productive age groups (25-34, 35-44, 45-54). Specifically, as this research shows, the unemployment ratio of the 25-34 age group increased from 11,8% to 16,4% (approximately 40% increase), that of 35-44 from 7,2% to 10,2% (42% increase) and the 45-54 from 6,2% to 8,9% (43,5% increase).
 
Therefore, as the Confederation points out, this unemployment is neither structural nor produced by market rigidities (institutional or otherwise). It’s caused by the recession, which can and must only be combated by means anti-cyclical policies, whether these relate to the financial aspect of economic policy (eg public investment) or a radical redesign of the employment policy, as well as policies that foster or at least will not shrink active demand.