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Home Opinion The young precariat in Greece: what happened to Generation 700 euros?
Greece • Precarity • Youth

The young precariat in Greece: what happened to Generation 700 euros?

Thanassis Gouglas - 05 February 2014

Troika mandated structural adjustments have forced the Greek government to reduce the state’s pension burden – a policy which will start to alleviate intergenerational conflicts in the long-run. Yet high youth unemployment in the short term has destroyed younger voters support for the two traditional mainstream parties

Just before the unfolding of the debt crisis of 2010, “generation 700 Euros” was widely adopted and used as a term best codifying the challenges young people in Greece faced at the time. The term was coined in January 2007 by G700, a political advocacy, “net-root” organisation, and it refers to a silent majority of young Greeks aged between 25 and 35, who are overworked, underpaid, overtaxed, debt-ridden and insecure, if lucky to even have a job. “Generation 700 Euros” and the political activism associated with it before the crisis, has not been unique to Greece. Since 2000 a number of similar “generations” has sprung up in many European countries: the “iPod” (Insecure, Pressurised, Over-Taxed and Debt Ridden) generation in the UK, the “Milleuristas” in Spain, the “Generazione 1000 Euros” in Italy, the “Generation Précaire” in France, the Generation “Praktikum” in Austria.

In contrast to what their titles may suggest, there is much more to these “generations” than simply low wages and the lack of jobs. Europe has long since been facing the emergence of a “young precariat”, widely defined as a young generation the members of which experience “precarity” and generational tension. Precarity, as defined by Guy Standing in his work The Precariat: the New Dangerous Class, refers to a situation where an individual faces most or some of seven fundamental forms of labour-related insecurity: labour market, employment, job, work, skill reproduction, income and representation insecurity. Generational tension does not refer to conventional notions of generation gap, but to unbalanced intergenerational relations, mainly due to unequal intergenerational transfers and outcomes in the public sphere. One such outcome is the break-down of the upward social mobility ladder. However, where intergenerational inequality takes gigantic dimensions, is in age-related public spending. The coming demographic storm associated with a declining young population and ageing throws the burden of financing the system upon the shoulders of the younger generation. Put in this way, the challenge of the young generation in Europe is not just the problem of youth employment for those in the cohort 15-24. It is about rebalancing the generational game through adequately addressing the problems of “precarity” and generational tension. It is an issue of social and generational justice.

While the problems besetting the young generation predate the crisis, the cataclysmic events of 2008 and 2010 have led to new challenges for social and generational justice. How are EU nations coping with those? The Greek case, despite being extreme, is also indicative of how the generational game is being rebalanced especially in Europe’s south. In our recent study we take a broader more sociological view of the young generation, rejecting conventional definitions of it consisting of anyone aged between 15 and 29. The young generation under pressure, and consequently our unit of analysis here consists of all those born between the late ‘70s and the late ‘90s (15-34 age cohort) who except for been stuck in the reality or prospect of a prolonged period of economic dependency, potentially lasting till their mid ‘30s, also face “precarity”, generational tension beyond conventional notions of generational gap and the momentous formative event of the 2010 debt crisis. In the case of the Greek young generation two contrasting forces seem to be at work. On the one hand, there is a precarity spike, which is detrimental for its members. On the other hand, we observe a rebalancing of the generational game in the field of old age spending to the benefit of the young generation. What is happening?

The Precarity Spike

The precarity spike refers to the deterioration of labour related security on three fundamental fronts.

A) Labour market insecurity and the unemployment epidemic

Standing at 43.63% in 2012, the unemployment rate for the 19-34 age group has almost tripled in comparison to the already high 20.2% in 2008, just before the crisis. Attempting a cross-generational comparison, we see that in 1981, after three years of recession since the second oil crisis, the 15-34 age-group, comprising of the then baby boom demographic cohort and those of Generation X born till the mid-1960s, unemployment stood at 8.5%, two times lower than for today’s young generation. The comparison with the 6.9% unemployment rate of the baby boom generation, then aged 20-34 is even more telling. Equally big are differences in unemployment among the highly politicised generational units of 114 & Polytechneio (1960s and 1970s democracy movement), 4.2%, and their contemporaries of Generation 700 Euros, 32%.

Table 1: Comparing unemployment rates across time, youth, age-groups, “actual generations” and “generational units”



Source: ELSTAT Monthly Labour Force Surveys 2008-2012, Census 1981

B) Income insecurity: from “generation 700 Euros” to legally poor

In 2011, under the strict policy conditionality of the First Economic Adjustment Program, the wage floor in the National General Collective Agreement was reduced by 32% for workers below 25, resulting to a minimum wage of 510.95 euros gross per month. From income insecure, the “young generation” was pulled into becoming legally poor. This happened against a background of Greece already projecting the highest incidence (57%for 2006) of low pay in working youth across the OECD. The reduction has generated a wave of media reaction and a new generational narrative, where a new “generation 300 euros” has now taken the place of the previously “prosperous generation 700 euros”. The very term “generation 700 Euros” has come to sound at least like a euphemism. Political activism under this title is now considered the old youth politics; a luxury of the pre-crisis society.

C) Employment and work insecurity: from “rigid-anomy” to “flex-anarchy” in a segmented labour market

In a labour market segmented into a protected insider category (mainly comprising public sector workers), a less protected insider category (workers in large and medium sized private sector companies) and an unprotected outsider category (workers in micro and small enterprises), the young generation in Greece has traditionally belonged to the latter. This is where “rigid-anomy” has been more prominent. By “rigid-anomy”, a term coined by the G700 netroot activists we mean the combination of a rigid employment protection legislation and an inflexible labour market, along with the reality of a labour market jungle, where none or very few of the formal rules apply (anomy = anomia in Greek meaning lawlessness). After two years of consecutive attempts to create a less segmented and at the same time a more flexible labour market, indications are strong that at least in the short and medium terms, the market is moving towards high statutory flexibility, combined with continuous breaches of even the new minimal employment protection legislation. At the same time, as the resistance of state owned companies (SEOs) to align with existing private sector regulation shows, labour market segmentation persists. Furthermore, there is the paradox of the private sector being burdened with the core of the internal devaluation policy, especially lay-offs, while the public sector still remains protected in most fields, with the exception of wages, where cuts have been indeed extremely severe. Finally, as the Troika reports on the Economic Adjustment Program, themselves show, the fight against undeclared work does not seem to be yielding significant results. We termed this scandalous new state of affairs “flex-anarchy” in a persistent segmented labour market background.

Generational rebalancing: off “Vampires and Cannibals”

In contrast to the “precarity spike” the burden associated with age related spending has decreased. The “cannibals” of the young generation appear to be winning the battle against the “vampires” of their parents’ generation. The confrontation that Mimis Androulakis so eloquently envisaged in his 2004 book Vampires and Cannibals: the risk of a new clash of generations, though evident in public discourse with slogans such as “eat your parents”, did not lead to any significant breaches of the “political cartel-vampire parties” and the “omerta” projected around the issue of pensions and old age spending.

It is the crisis and the pension system reforms under the strict policy conditionality of the Economic Adjustment Programs that dealt a blow to the grey status quo. In 2007, Greece belonged to the group of states whose pension expenditure stood at 11.7% of GDP, the fourth highest among the EU-27. Even worse, public pension expenditure was projected to approach 24.1% of GDP by 2060. This would have been the second largest increase in the EU-27, whose average was projected to approach 12.5%.  According to the European Commission’s Ageing Report for 2012, reforms in Greece are having visible positive impacts, sharply reducing the projected increase in public pension expenditure, diminishing the budgetary impact of ageing. Public expenditure in 2060 is projected to reach only 14.6% in comparison to 24.1%. Because of this progress on the pensions front, the overall increase in age-related public spending will also be more moderate, 4 p.p. of GDP or less, placing Greece in the group of countries with the lowest such burden along with Bulgaria, Denmark, Estonia, France, Italy, Latvia, Poland, Portugal, Sweden and the United Kingdom.

Where does this analysis leave us? Moving beyond sensational language, slogans, fancy frames and codifications, the young generation in Greece may be seen as a broader challenge of social and generational justice. This is as crucial today, as it was before the eruption of the economic crisis. However, while the economy seems to tell a story of potential generational rebalancing in favour of the younger generation in the long-term, politics, grasping the short-term anxiety of the young generation tell a story of direct confrontation with the political establishment.   

The Economy

On the labour and welfare front, the crisis does not have a single linear effect to the issue of the young generation. As much as the grim picture of insecurity, lack of prospects and pessimism overtops any sense of hope in the short term due to the precarity spike, there are also reasons for greater optimism in the medium and long terms. The destruction of the old Greek growth model, based among others on generationally and socially unbalanced relations, is indeed a long awaited and much needed process that in the long run should work to the benefit of the young generations and even more so to that of the future generations. Having said that, the conditions under which a full generational rebalancing might take place are not yet present. Re-balancing the generational game needs to be founded on a strong labour market, while it also needs to touch upon broader issues of environmental sustainability and provision of quality public goods. More importantly, much will depend upon whether Greece manages to rebalance growth and exit the deep recession, pick up the pace of structural change, change its productive paradigm on time, while maintaining sustainable public finances in the coming years.

Politics

On the politics front, the widespread sense of a lost generation, facing massive unemployment, a labour market jungle, lack of prospects and the need to migrate abroad, has dominated the public discourse. It is this generation that since the beginning of the crisis turned its back on mainstream politics, verging increasingly to populist and extremism political choices situated in both ends of the political continuum. The evolution of voting behaviour and intentions of the 18-34 age group from 2007 to November 2013 is indicative of this new reality.  

The Young vote

At the parliamentary elections of 2007, six months after the whole generation 700 euros issue had entered public discourse parallel to a university and pension reform, about 36% of voters aged 18–34 voted for PASOK, while 39% for New Democracy, which then won the election. The two mainstream parties of the left and the right respectively gathered an impressive 65% of the total vote in that age group. The Greek Communists, KKE and the radical left SYRIZA polled poorly at 8% and 9% respectively, with the populist right LAOS at 4%.

A similar pattern was repeated in the 2009 election. This time the roles were reversed with PASOK polling at 41.5% in the 18-34 age group and New Democracy 30%. PASOK won that election by a historical landslide victory of more than 10%. In the 2009 election the Greek Communists, KKE and the radical left SYRIZA polled poorly at 8% and 6% respectively, the Greens reached an impressive 4%, while the populist right stayed at similar levels at 5%. In 2009 the two mainstream parties in Greece polled at the impressive 71.5% in the young generation.

However, the crisis drastically changed those voting patterns. At the last parliamentary elections in June 2012, polling at 31.5% in the 18-24 age group, SYRIZA won this category by a landslide. The election winners, conservative New Democracy polled at 21.5%, while coalition partners PASOK, in an age group that has traditionally been a stronghold for socialists, polled a mere 6.5%. The fate of the Greek Communists, as well as of the new Democratic Left followed that of the established parties with both polling at 5%.  What is impressive in the June 2012 election is the rise of the right wing extremists, Golden Dawn, polling at 11.5%, followed closely by the populist right, Independent Greeks (ANEL), polling at 11%.

Since the June 2012 parliamentary elections it seems as if the shift in voting intentions in the age group 18-34 has acquired permanent characteristics. In a poll carried out in November by Metron Analysis, SYRIZA is leading in the young generation in terms of voting intentions, polling at 23.6%. The incumbent New Democracy comes second with 18%, while coalition partner PASOK struggles at 4.1%. To the right of the political continuum the extreme right sits comfortably at third place with 7.9% followed by the Independent Greeks (ANEL) at 5.7%.

It is evident from the available data on voting behaviour and voting intentions from 2009 to 2013 that the two mainstream political parties, PASOK and ND have suffered a heavy blow in the young generation. From 71.5% of the total vote in that age group just before the crisis to 22.1% on November 2013, lower than SYRIZA. PASOK in particular has seen the annihilation of its electoral appeal in the young generation, polling from 41.5% before the crisis to only 4.1% in November 2013.  

The Grey vote

In the 2007 parliamentary PASOK and New Democracy, as they had always done in the past, dominated the vote in the 55+ category, polling at 40% and 50% respectively. In 2009 the percentage became 46% and 39% respectively with PASOK taking the lead. In both elections the two mainstream parties got more than 85% of the grey vote. This pattern is largely unaffected for the conservative New Democracy, which in June 2012 polled at 40% in the 55+ age group, indicating clearly where its demographic stronghold lies. PASOK too polled higher in that category, at 18%, than in comparison to its national vote of about 13%. The real winner of the June 2012 parliamentary election SYRIZA, polling equally with PASOK in the grey vote at 19%, performed significantly lower in comparison to the young vote. ANEL at the populist right polled poorly at 4%. The extremist right Golden Dawn polled at only 3%. It is interesting to point here that the Greek Communists, perceived as an established party, polled better at 6%. The picture has not significantly changed since June 2012. On November 2013, ND polled first at 25.8%, followed by SYRIZA, always stuck at around 18%. PASOK, despite its further deterioration appears to be holding a solid percentage of the grey vote at 10.35%. Same as before, the populist right struggles to get its message across older voters with ANEL polling at 3.6% and Golden Dawn at 5.9%. Overall, we see from analysing the available data that the higher the age, the more mainstream the vote. Greece’s dismal demographics seem to be good for mainstream politics.

Where does this analysis leave us?
    
In view of these political trends it is not only the Greek mainstream parties that should be worried. Europe too, especially political leaders calling the shots in the European Council and the Council of Ministers, need to awaken in face of a grave double danger: first, losing a whole generation in a decade of growth-less and job-less incremental structural change. This of course would be catastrophic, not only for the economy, but also for democratic politics. Populism and extremism are already on the rise with traditional political heavyweights like New Democracy and even more so the social democratic PASOK witnessing the annihilation of their youth electoral support. The young generation should also be worried. Life under the leadership of the populist extremes might prove to be even more precarious than before. The crisis should be seen as an opportunity for more paradigmatic generational and socially just change, not retrenchment.

Thanassis Gouglas is a researcher at KU Leuven Public Management Institute and a former Political & Policy Adviser at the Ministry of Regional Development and Competitiveness in Greece

This is a contribution to Policy Network's work on Social Policy and Changing Welfare States.

Tags: Opinion , Thanassis Gouglas , Greece , Austerity , Fascism , Nationalism , Extremism , Euro , Eurozone , EZ , , Crisis , Fincncial , Economic , Banking , Sovereign Debt , Financial Crisis , Economic Crisis , Banking Crisis , Sovereign Debt Crisis , EU , European Union , Populism , Golden Dawn , National Dawn , Left Wing , Right Wing , Neo-Nazism , Far-Right , Immigration , Democracy , DIMAR , PASOK , Austerity , Eurozone , EU , European Union , Europe , Euro , EU/IMF/ECB Troika , Troika , International Monetary Fund , European Central Bank , Precarity , Intergenerational Conflict , Unemployment , Jobs , Mobility , Poverty , Homelessness , Youth Unemployment , NEET , Not in Education Employment or Training , Education , Voting , Emmigration , Generation 700 Euros ,

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