Foreign immigration and economic development in Greece (1).

• Author: Lazaridis, Gabriella
• Position: Report

Abstract

A country may benefit from foreign immigration because of the increased unavailability of cheap labor, but encounter problems from xenophobia and social unrest. The end result depends on demographic characteristics, qualifications and immigrant skills and the capacity of the host country to absorb foreign labour and benefit from it.

Migrants in Greece comprise about 9% of the population and 12-13% of the labour force. Their influx occurred in a relatively short time, the overwhelming majority entered Greece illegally but after two regularisations, one in 1998 and another one in 2001, about 700,000 have been granted a legal status. Their average age is considerably lower that that of the rapidly aging national population, in hundreds of primary schools their children make up over 10% of the total school population and in some over 30%. About 8 out of 10 are economic immigrants but to a very small extent does their labour appear to substitute for national labour; for many jobs in construction, agriculture, tourism and domestic service their labour tends to become indispensable and as their depended younger family members who joint them come to age they form a continuous flow of young foreign entrants into the labour force.

This paper investigates the main facets of the economic and social development in Greece and benefits and costs of the influx of large numbers of migrants since the late-1980s for the Greek economy and society. The emergence of xenophobia and racisms and the impact of discrimination on migrants' inclusion into the host country will also be looked at, alongside policy responses.

INTRODUCTION

Unlike other western European countries but similar to other southern European member states of the European Union, Greece has started attracting large numbers of third-country migrants only since the late 1980s--early 1990s. Greece has hosted since, nearly one million foreign immigrants (around 9% of the indigenous population and 12%-13% of the labour force). This very visible presence of migrants, has been the subject of social alarm boosted by media attention, and is at odds with the extent of the phenomenon in neighbour Italy, where migrants do not exceed 2% of the population (Mingione and Quassoli, 2000: p.41). More than half of them are migrants from Albania, and most of the remainder arrived from the former socialist countries and from a variety of less developed countries in Africa and Asia. The majority have been undocumented migrants employed almost exclusively in unskilled or low skilled jobs, irrespective of their qualifications and skills. Statistics on the number of migrants, their geographical distribution and spatial mobility as well as their demographic and occupational characteristics are only partially available and problematic in nature (Lazaridis and Romaniszyn, 1998: p.12).

This paper consists of three parts. Part one, looks at the opportunity structure available to migrants under the labour market and overall socio-economic conditions in the host country. In part two, after outlining some of the main characteristics of immigration into Greece, including type of flows and status of migrants, we analyse the short and long-term socio-economic effects of immigration in terms of policy responses. In part three, we try to decipher positive and negative effects of migration into Greece for the host country but also for the migrants themselves.

Unlike those who migrated in the pre-mid-1970s migration period to Fordist societies, migrants who came to Greece could neither 'benefit' from a developing industrial economy requiring large numbers of cheap labour, nor take advantage of sizeable, strongly rooted communities and networks of fellow citizens (at least in the early 1990s) to offset some of the risks of migration (these often serve as a first reference point for mediating the process of social and economic inclusion into the host society and economy). Instead, they were faced with a complex society and informal economy where patronage and familism play a key role in finding a job or getting access to some elementary benefits. Clientelistic practices linked to a corrupt administration and a weak civil society highly restrict policy making and implementation towards particularistic goals.

BACKGROUND

The model of capitalist development followed by Greece is characterised by late industrialisation, the persistence of traditional agrarian social arrangements and high rates of economic growth in the 1960s with a 6.7% of growth of GDP per capita (Sapelli, 1995: p.7). Since the mid-1970s, like other southern European member states of the EU, Greece has experienced a rapid shift to post-fordism, well before industrialisation had deepened and fordist production structures with their accompanying patterns of collective solidarity and universalist social citizenship had been fully developed. This trend has been manifested in the continuing decline of agricultural workers and the rapidly increasing number of service workers (see table 1) without the country having reached a peak of employment in industry, and as high as in the case of its north-west European counterparts. Furthermore, despite the rapid expansion of employment in services in the 1990s, which offered employment opportunities to women, female participation in the labour marked remained relatively low (the activity rate for Greek women being 47% in the mid-1990s, that is below the EU15 average of 57%, as opposed to the activity rate men which was 80%) (Eurostat, 1997; European Commission, 1996, 1997).

In 1945-1973 the net emigration of almost one million Greeks went hand in hand with a 6.3% annual growth rate on average. A gradual transition from unemployment to conditions of full employment and considerable economic restructuring and social development were also attained. Towards the late-1970s, the annual growth dropped to about 3.5%, despite a net annual repatriation of approximately 15,000 persons since the mid-1970s and widespread stagnation or recession in most other European countries. A shift of the policy priorities to the redistribution rather than to the increase of the GDP led unavoidably to a further decline in growth rates to 1.1% in the 1980s. Moreover, in the period 1975-1985, despite the transition from an agricultural economy to a post-fordist one and the opening up of the economy and democratisation of union organisation after the fall of the Junta (1974) as well as preparation of accession to the EC, we have an increase of unemployment rates (Lazaridis and Koumandraki, 2001a) (2); the latter can be explained in terms of: (a) the de-industrialisation in some regions and localities like Lavrion, Magnesia and North Evia; (b) the closing down of 'ailing firms'; (c) stagnation of investments; (d) highly restrictive employment protection legislation (strict rules for dismissals, strong government intervention in the determination of wages and incomes--especially during the 1980s--which made wages inelastic to changes in productivity or unemployment rates and have had negative effects on unit labour costs, strict job demarcations and work schedules); and (e) the role of the family as a buffer against the economic repercussions of unemployment (Lazaridis and Koumandraki, 2001a). Legislation introduced in the early 1990s supporting part-time and fixed-time employment increased flexibility of working time, but its potential effects on reducing the unemployment rate were counterbalanced by the economic stabilisation policy followed since the early 1990s under the pressure of the Maastricht Treaty requirements and the monetary discipline stipulated by the EMU (European Monetary Union) criteria. In addition, from an informal point of view, like other southern European member states, labour flexibility in Greece was and still is high: circumventing of employment regulations often practised by small firms, and the relatively large sector of the underground economic activity (estimated to produce around 30% to 40% of the GDP [Canellopoulos, 1995]) widely foster irregular forms of employment, extensive second-job holding and a complicity between workers and employers to evade juridical rules.

The informalisation of employment plays a crucial role in understanding what the impact of migratory flows are on receiving countries. Since the late-1980s, illegal migration has exacerbated the phenomena of irregular and concealed work in Greece, while a policy of integration of immigrants has only recently started being implemented via two regularisations, the outcome of which is discussed be low. The inflow of hundreds of thousands economic immigrants had no significant effect on the official annual rate of economic growth which increased slightly to over 1.4% (OECD: Economic Surveys for Greece, 1997-2001).

Most migrants, faced with limited opportunities for finding regular jobs, and lacking the kinship and social networks necessary for providing the social and economic resources with which to enter successfully into the formal sector, work in the informal economy. Warren (1994: p.92) has defined the informal economy as 'market activity in legal goods and services that is not registered with the state, not taxed ... and not subject to any other state imposed regulation on business'. According to Katrougalos and Lazaridis (2003: p.41) 'the persistence and expansion of informal economic activities, as an alternative process of income generation, has had profound implications on employment'. Migrants constitute a good source of informal labour for the multitude of micro-firms found in Greece and partially absorb the shock waves caused by post-fordist transformation. Informalisation has repercussions for migrant workers as it reinforces labour market fragmentation and segmentation, which in turn involves the compartmentalisation and isolation of different groups of labour market participants. These features, together with...