A New Wave of Greek Emigration? Not So, Really.

It is amazing how so many articles about Greece published in foreign papers or magazines are so off the mark - and this article in the New York Times is one of them. It purports to describe and explain a new wave of emigration from Greece to Europe or to the United States, which is completely different from the earlier waves of the '60s and the '70s (and earlier, yet, at the turn between the 19th and 20th century): this time it is mostly university-educated young people, rather than peasants or manual laborers, who go after the challenges, and the higher rewards, of mostly white-collar jobs abroad. There are fears of a brain drain in Greece, fears that its most talented and ambitious young people are leaving, never to return.

Indeed, a lot more people than in the past are considering the possibility of working and living abroad, but not so many, as to drastically alter the composition of the working force in Greece. Moreover, the article is completely wrong in presenting the causes of this surge in people's acceptance of the possibility of emigrating: it attributes this surge in the scandals that have plagued Greek political life the past three or four years and the sense that meritocracy is not to be found in Greece; moreover, the lack of private-sector jobs requiring college-level qualifications in Greece, meaning that most jobs are held by over-qualified employees; hence, if one wishes to fully realize one's potential, then emigration seems like the only solution.

These are only small parts of the explanation. An ever increasing number of Greek students has the opportunity, through the Erasmus student-exchange program, to study abroad, albeit for a semester only, prior to earning their university degree. They get to know first-hand how different life abroad is. Moreover, air travel has become relatively inexpensive - it is not unthinkable for a family of modest means to spend a week, or even a fortnight abroad in vacation. These changes are recent and result in many more young Greeks having travelled abroad and gotten to know how it is out there and even established some connections in foreign markets - coupled with Greeks' propensity to learn foreign languages (practically every university graduate speaks English and many speak at least one more foreign language) they would inevitably lead to more Greeks considering the prospect of spending a large part of their lives away from their homeland.

If there is a catalyst that might lead to spike in emigration, which the article does not mention, it is the consequences of the financial crisis: the possibility that the government might default on its debts and not be able to pay the public servants any more (except at a completely reduced rate) and the hiring freeze in the public sector. The article fails to grasp, much less present, the almost mythical status public service has in Greece - not because it is considered an honorable pursuit, but quite the contrary: because public servants, for all practical purposes, cannot be sacked. Getting a government job is a dream, on which more than one generation has been raised. College and graduate studies help, if anything, to increase the qualifications for applying for a government job and to ensure special salary bonuses. Most people think that they have "made it" by having been hired by the central government or by the local administrations or by any of a large number of smaller government bodies or corporations. Since this option has become unavailable, many more people are preparing for the possibility of finding a job abroad.

Needless to mention that these people are wanting in the qualities that would serve them well abroad: confidence, responsibility, ambition, drive to prove oneself. Many of them still live with their parents and feed on the bank accounts, that had bloated during the years, when the government could still borrow and distribute money at will. But these resources are finite - and, after they are drained, many a Weltanschauung might change.

Jobs by the Government - the Joke's on You!

The communist or communist-tilted parties of Greece have proposed that the government can reduce unemployment by hiring more than 100,000 people in the public sector (Greece has a population of 11,000,000); this was dismissed by everyone here, including other left-wing parties and politicians, as a lame joke, a sign that, while many things are wrong, not all hope is lost yet for our Soviet-style economy to achieve a semblance of a functional, market economy. You can imagine, then, how taken aback I was when I found out that this kind of thinking resonates in the U.S.A. by reading this editorial in the New York Times, and particularly the following passage:

"... states and local governments shed 10,000 more employees in August, for a total of 282,000 lost jobs in the past two years. Rather than supporting the economy in time of trouble, states and localities are a drag on growth" (emphasis added).

So the editorial board of the New York Times considers that economic growth is spurred by the hiring of more civil servants: the government provides more "services", which the market has signaled (via the lack of demand) that it deems unnecessary; it has to increase taxation or borrow: that's a plan for economic growth! And suppose that demand is increased, and not just marginally (although I very much doubt that) and some growth appears to emerge - how will it be sustained? By the constant draining of the economy's financial resources through taxation, in order to keep up a useless bureaucracy?

Real, sustainable growth can only come through private enterprise. If this has not become obvious all through the years, I don't know what, if any, lessons we might have learned from economic history. Curbing entrepreneurship through high taxes or by giving out money, supposedly for jobs, but with the society getting nothing back in return, now that's a real drag on growth.

There are two things this blog will never tire of repeating:

a. Money is best spent by those who earn it, who assess their own needs and show their preference to goods and services offered - not by some wise, benevolent, or whatever, government.

b. It is bordering on the criminal to give people false hopes, particularly on something as crucial for their life and well-being as their jobs. Hiring by the government or with government money going to cover needs, that the market itself has rejected, is not sustainable in the long run. Even if the society, at large, were to decide that it would provide some form of welfare/ assistance to the unemployed or to the otherwise less fortunate of its members, as liberals apparently wish, it could not afford to ill-spend its resources on such glimmers of false hope. 

So, even a liberal or left-oriented approach is completely inconsistent with government hirings just for the sake of reducing unemployment: if you want the government to have money to hand out to those in need (something, which this blog does not subscribe to as a matter of principle, but can accept under some circumstances), then save the money.

And if you want increased tax revenues, then do away with all the counter-incentives to investment - high taxes, over-regulation and the rest. Ronald Reagan put the Laffer curve to the test - and, guess what, it worked - individual income tax revenues almost doubled during his Presidency, rising from $ 244 billion in 1980 to $ 446 billion in 1989!