Labor productivity deficit in Greece

Labor productivity in Greece is about a third lower than the average of its member-states, the Organization for Economic Cooperation and Development (OECD) said last week.

The details, as revealed by the special chapter of its annual Economic Outlook report, on Greece, are even more disappointing: Not only is productivity low, but it has fallen slightly in recent years. In addition, Greece ranks last in terms of productivity levels among European OECD members and fourth from bottom among OECD member-countries overall.

Labor productivity, calculated in gross domestic product per hour of work was $34.5 in Greece in 2022 (latest data available) compared to $53.8 in the OECD – i.e. it is at 64.1% of the OECD average.

Compared to the eurozone, where productivity is $60.8, Greek productivity is just over half, while in the European Union productivity is $55.7. This performance places Greece last among European countries and fourth from the bottom among OECD member-countries. Only Mexico, Colombia and Chile are in a worse position.

In 2022 labor productivity in Greece increased, but overall in the period 2015-2022 it showed a slight decrease (it is at 99.76% of 2015). In contrast, the OECD countries as a whole are 6.76% higher than in 2015, the EU by 4.68%.

Compared to 2000, the distance of the productivity level from the OECD average grew in Greece, as well as in Israel, Japan, Mexico and New Zealand. Most other countries, especially the least developed, were converging. As the OECD points out, labor productivity only partially reflects workers’ personal abilities or effort intensity. The index is highly dependent on the presence and use of other inputs, such as capital, technology, organizational changes, and economies of scale.

As noted last December by the Greek Productivity Council of the Center of Planning and Economic Research (KEPE), “key conditions for the realization of the expected growth potential of the Greek economy is, on the one hand, the increase in the utilization of the workforce, and, on the one hand, the significant increase in fixed capital investment.”

Kathimerini