ATHENS Dec 21 Greek dietician Reggina knew she
had little choice when her boss told her she could keep her job
at a health centre only if she agreed to getting part of her
salary off the books.
With Greece sinking deeper into recession and no other jobs
to be found, she meekly agreed last year to monthly pay of 160
euros in cash and 700 euros on the books - allowing her
struggling firm to pay lower social security contributions.
At 26, Reggina had joined the ranks of a growing number of
young Greeks resorting to informal work to get by during an
economic crisis that has left Greece with a youth unemployment
rate of 56 percent - the highest in the euro zone.
"It's not just psychological war, it's abuse," said Reggina,
who like others declined to give her full name because of the
illegal nature of her work.
"I get fewer social security vouchers and I can't get a loan
because my salary on paper is so low. But they tell us if we
talk about this, we'll lose our jobs."
Data suggests informal work in Greece - which already has
one of the largest grey economies in the euro zone - is rising
quickly, fuelled by both cash-strapped businesses trying to save
on contributions to the state and desperation among job-seekers.
In the first half of the year informal workers accounted for
35 percent of about 30,000 employees during checks by the SEPE
agency that inspects firms, up five percentage points from 2011.
More than half of them were Greeks and 41 percent were migrants.
Most of them were employed in the construction sector or in
family businesses like restaurants, cafes, bars and shops. The
number of self-employed in Greece - another indicator of the
rise in informal work - now stands at 31 percent of workers,
twice the euro zone average, says Athens-based think-tank IOBE.
"When the recession is so deep, labour rights are among the
first to be sacrificed," said SEPE Director Michalis Kandarakis.
"They become less important for employers."
Unionists allege businesses have become so innovative in
finding ways to cut costs during the crisis that some companies
have even deposited salaries but demanded part of the money back
in cash a few days later or paid workers in supermarket coupons.
They argue the efforts of Greece's international lenders to
loosen strict labour laws have only made matters worse, allowing
employers to use part-time or flexible contracts to pay workers
the minimum possible on the books and the rest under the table.
"Many businesses, even profitable ones, are taking advantage
of the crisis to make money out of it," said Nikos Kioutsoukis,
general secretary of private sector union GSEE.
"The government's policies prescribed by the lenders are
wrong and push young people to the black market for labour.
Informal work will spiral out of control if this continues."
He estimates as many as 35 percent of Greek workers toil off
the books in one form or the other, with some self-employed
workers turning to it to avoid high taxes and others forced into
it by businesses aware of the limited choice job-seekers have.
At the other end of the spectrum, young Greeks say
conditions in the job market are so dire they consider
themselves fortunate to have even an informal job - despite not
knowing if they will ever get the money they were promised.
Costas, a 23-year-old university student, became a waiter
this summer on the agreement he would get a paltry 35 euros for
working an 8-hour day. In the end, he says he was only paid 70
euros a week and kicked out three months later when he spoke up.
"When I dared to speak up I was simply fired. There are so
many people looking for a job out there, why should they keep
me?" he said.
"The negotiation with every potential employer starts from
the amount that he is willing to give, not the contract terms.
I t's obvious that it will be off the books."
AN UPHILL BATTLE
The rising levels of informal work come at a heavy price for
a cash-strapped state reliant on aid loans to stay afloat.
With unemployment and informal work both rising, the
country's largest pension fund IKA-ETAM expects welfare
contributions to fall about 7.5 percent this year - depriving
the state of about 800 million euros compared to a year earlier.
A report by an EU task force this week also cited undeclared
work as a "major issue" affecting Greece, saying it "endangered"
the viability of the country's social security system.
Greece's conservative-led coalition - under pressure from
lenders to boost tax revenues - has promised to crack down on
the phenomenon by increasing fines and reinforcing the SEPE
agency that inspects businesses on compliance with labour laws.
"We have declared war against informal work and benefits
evasion," Labour Minister Yannis Vroutsis told Reuters.
"The crisis cannot be an alibi for those violating the law.
Businesses breaking the rules have no excuse anymore."
But the government is fighting an uphill battle.
Despite reforms making it easier to hire and fire workers
and lowering the minimum wage, Greeks still pay the highest
social security contributions in Europe - giving them an
incentive to sidestep formal labour contracts, IOBE says.
Lack of trust in a political system seen as corrupt and
unfair, strong family bonds that encourage work in family
businesses and a long history of a flourishing grey economy have
all allowed informal work to grow, IOBE says.
Yannis, a 38-year old construction worker who has always
worked informally, is one Greek who sees no incentive to change.
"We all work like this and so do I. We can't keep paying a
state that takes 40 or even 50 percent off our wages through
taxes," he said. "I'm sorry but I have children and I have to
pay to feed and dress them."
Others like Reggina still bristle at the ignominy of being
paid under the table. But a lack of alternative jobs has meant
she too has moved further into the same informal economy she
blames for her misfortunes.
"Now I do it myself: I see clients at home and don't give
them receipts," she said. "I'm not ashamed about this, I have no