Cash-strapped Greek firms have started paying employees in kind, mainly with supermarket coupons. Employees faced with the highest unemployment in the European Union are complaining but often have little recourse.At the age of 42, George had been out of work for over a year and struggling to make ends meet, before landing a job at a local supermarket. Months into his new gig, however, the father of two faced an unorthodox company notice: part of employees’ salaries would now be paid in kind, not cash.
“I really had no option,” he said, refusing to divulge his surname and company details for fear of reprisals. “I just shrugged my shoulders and agreed. I didn’t want to face unemployment again.”
With cash-strapped Greek firms struggling to cope with rising payroll costs and social security contributions, payments in kind are skyrocketing, feeding a black market which already accounts for more than a quarter of the county’s official economy.
Yet with one in three Greeks facing rising rates of unemployment, payments in kind are encouraging other nefarious practices. This is throwing the country’s already ailing labor market into further chaos, warns GSEE, Greece’s largest umbrella trade union which represents about 1.8 million private sector employees.
“Even if payment were being offered in bars of gold, this would all be terribly illegal,” said GSEE Secretary Dimitris Kalogeropoulos in a recent interview with DW. “A mafia-style mentality in work relations is taking hold.”
Talks with international creditors continue
For months, Athens and its international creditors have been locked in acrimonious debate over the terms of a bailout that would free up more rescue funds to keep the Greek economy afloat. An agreement is anticipated by April, but the scale of concessions that the leftist government of Alexis Tsipras may backfire domestically.
Greeks have been reeling from seven years of brutal budget cuts that have seen one in three businesses shut. The economy shrank by 25 percent, and 1.2 million workers were pushed into unemployment lines. Demands by creditors to ease up the labor market, making it simpler for companies to hire and fire, have voters and lawmakers balking at the reforms.
Since the start of the financial crisis, collective labor agreements have been sort of eclipsed, giving way instead to dodgy business contracts ensuring nominal pay and no benefits to employees.
In 2016, just 45.3 percent of the country’s private sector workforce worked full time – a dramatic drop from the near 80 percent recorded before the Greek economy skid off the fiscal cliff in 2009.
Salaries, meantime, have swooned. About 70 percent of private sector workers are now being paid less than 800 euros ($862) a month. Of these about 25 percent receive between 500 and 699 euros per month, according to surveys released earlier this week.
“Add on firms and companies distributing coupons rather than cash to their workers, and the most fortunate employees end up with just over half of the salaries deposited into their bank accounts each month,” says Karageorgopoulos. “It’s crazy and it’s getting worse.”
Before the financial crisis, some firms issued employees with vouchers to reward them for outstanding service. Treats included all-inclusive stays at sun-kissed holiday resorts to free theater tickets and meals at exclusive restaurants.
But now, all of that has been dropped and coupons, mostly issued by Ticket Restaurant, include lackluster pay in kind vouchers for supermarket supplies. What’s more, nastier labor practices have emerged.
In one such budding trend, private security guards escort company employees to ATM machines at night, forcing them to withdraw and hand back to their employers as much as a third of their deposited pay.
“It’s part of dodgy, under the table transactions that many employees have agreed to for the sake of securing a job,” Kalogeropoulos says.
This mafia-style practice has become more popular since December 2016, when a new government decree forced companies to pay all employers’ salaries via bank transfers – a move designed to crack down on widespread tax evasion and undeclared labor. Surprisingly, though, authorities remain oblivious.
The government refuses to take action
In fact, despite mounting complaints, no official investigation has been launched into the nefarious labor practices. Neither have companies been publicly named or shamed for their illegal practices. Last week, GSEE revealed that it had received thousands of complaints in recent months centered on a group of telecommunications companies, security firms, cleaning and collection companies which operate across the country.
Labor and Finance Ministry officials refused to comment. For millions of Greeks, though, the trend strikes another blow to their battered dignity.
“It’s not just the poor or struggling folks that are now being forced to use these vouchers,” says Eleni Dorania, a supermarket employee in the north of Athens. “It’s everyone. And it’s sad watching many respectable people secretly pull them out for reimbursement. They feel like they are on food stamps.”