Greece Implements Bold 48-Hour Work Week to Combat Labor Shortages Starting July 1, Becoming the new China in Europe

Greece's New Labor Law: 48-Hour Work Week Begins July 1

In a bold move to tackle labor shortages and economic challenges, Greece is set to implement a new labor regulation starting July 1, 2024. This regulation will extend the standard workweek from five to six days, allowing certain sectors to adopt a 48-hour workweek instead of the previous 40 hours. The changes, as highlighted by Emmanouil Savoidakis from Politis & Partners law firm, will apply to specific industrial and manufacturing facilities, as well as businesses providing 24/7 services. However, industries like tourism and food services are excluded from this new arrangement.

Prime Minister Kyriakos Mitsotakis and other government officials believe these changes will address labor shortages, reduce black market labor, and enhance economic productivity. The legislation aims to simplify administrative procedures, reduce probation periods to six months, and regulate overtime more effectively. The new law also includes incentives for employee training to help workers adapt to evolving market demands.

Key Takeaways:

1. Extended Work Hours: The new regulation will officially extend the workweek to 48 hours for specific sectors, potentially increasing workers' earnings.
2. Economic Recovery: The government hopes this move will boost productivity, enhance competitiveness, and support economic recovery.
3. Labor Market Impact: The legislation aims to combat undeclared work and fill skilled-labor gaps with improved training and upskilling initiatives.
4. Selective Implementation: The six-day workweek will not be universally applied but restricted to certain business sectors experiencing labor shortages.
5. Potential Challenges: The changes may lead to increased health risks, diminished quality of life, and potential exploitation of workers.

Analysis:

The decision to extend working hours in Greece comes amidst a backdrop of economic recovery efforts and persistent labor market challenges. Greece has faced significant economic struggles since the debt crisis that began in 2009. The country’s economy, while showing signs of growth with a GDP increase projected at 2.2% this year, still grapples with high unemployment rates and a shrinking population.

The rationale behind the new labor law includes boosting productivity, enhancing economic output, and attracting foreign investment by demonstrating a commitment to higher productivity. However, the approach has sparked concerns about worker exploitation, health risks, and overall well-being. Prolonged working hours are associated with higher risks of physical and mental health issues, including stress and burnout, which could ultimately reduce productivity and innovation in the long run.

Critics argue that longer working hours are a short-term fix and do not address the underlying structural issues in Greece's economy. Instead, they advocate for investing in technology, enhancing workplace innovation, and implementing fair wages and benefits to improve workers' financial well-being without resorting to excessive work hours. Additionally, promoting policies that support work-life balance and diversifying the economy to reduce reliance on a few sectors could provide more sustainable economic growth.

Did You Know?

1. Greece’s Long Working Hours: Greeks already work some of the longest hours in Europe. According to the OECD, Greeks work significantly more hours annually compared to their counterparts in the UK, the US, and Germany.

2. Historical Context: During Greece's debt crisis, lenders demanded increased work hours as part of austerity measures. Although a six-day workweek was considered, it was not implemented at that time.

3. Minimum Wage Increases: Despite the push for longer work hours, Greece has seen recent increases in the minimum wage, rising from €650 in 2019 to €830 in April 2024, with further plans to increase it to €1,500 by 2027.

4. Comparative Experiments: Several European countries, including Germany, Belgium, and the UK, are experimenting with shorter workweeks. For example, Germany's national railway company has plans to reduce the standard workweek from 38 to 35 hours.

5. China’s “996” Work Culture: China, which has long relied on extensive labor input, is known for its “996” work culture (9 a.m. to 9 p.m., 6 days a week), reflecting the intense pressure to maintain economic output and competitiveness. This model has faced criticism for its toll on workers' health and well-being.

As Greece embarks on this new labor regulation, it remains to be seen whether this approach will yield the desired economic benefits or exacerbate existing challenges. The move could serve as a case study for other countries grappling with similar labor market issues.