Labour productivity in Greece fell by 16% between 2009 and 2024, and real wages declined by 26%–35% overall and by 60% in tourism, according to an LSE study titled “The café economy.”
The decline is attributed to a structural shift toward the accommodation and food service sector (AFSA), while jobs in more productive industries have disappeared — and have not been replaced by positions in high-tech or innovation-driven fields.
Between 2009 and 2023, the AFSA sector grew sharply, with employment rising by 87% and its Gross Value Added (GVA) increasing by 11%. However, 86% of workers in the sector are considered “overeducated” for their roles.
High-productivity work refers to employment that significantly contributes to a country’s overall productivity growth, typically in sectors such as technology.
The study describes the Greek growth model as becoming “dual,” a structure it calls a “historical regression,” typical of less advanced or transitional economies, such as those in the developing world.
In a dual economy, growth relies on low-productivity sectors that absorb unemployment through cheap labour and wage compression.
The researchers argue that the three bailout programs implemented between 2010 and 2018, rather than boosting competitiveness, triggered a deep recession from which the Greek economy has yet to fully recover. They also recall that the IMF itself later issued an apology for underestimating the effects of such a sharp fiscal contraction.
Source: in.gr
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