Is it true that where unemployment is highest, Education is a big part of Why?
By Anthi Kalomiri
In order to understand and examine the Greek case and the correlation between Education and Unemployment, we may see what is happening in the Education sector and business environment of the United States. This is important for two reasons: U.S. is a country where education is thriving; and secondly, because the U.S. has already gone through recession, but the country possesses the mechanism to measure its standards and forecast its future more accurately.
Let’s first examine if it is true for the U.S. that where unemployment is highest, education is a big part of why. According to a study by the Brookings Institution in Washington, cities with greater shortcomings in education also have greater unemployment. The institution looked at online job posting between 2006 and 2012 and measured the average number of years of education required for the openings. Brookings compared that with the data on the average education level of the population in each of those places and found that there is an “education gap”, where the percentage difference between the average years of education in job postings and the average years of education in the area. The study shows that in Stockton California the education gap is 10% and unemployment rate is 14.5%, where in Washington DC is the education gap is just 1% and the unemployment rate is 5.3%. In Miami the gap is 6.8% and the unemployment 8.7%
Why do we have this phenomenon? One explanation is that, following the Great Recession, many employers raised the bar in education requirements since they had a flood of applications for open jobs. They figured out that highly educated workers are stronger candidates because they are easier to train. Also, as longtime workers age out of jobs, employers tend to replace them with more educated people.
A Georgetown University study showed also that workers hardest hit by the recession were those with no more than a high school level education. The Georgetown study showed that since the recession began in late 2007 until early 2012, those who had no degree beyond a high school diploma lost a total of 5.8 million jobs or 10% of the jobs they had previously held. For those with better education, there was either no net job loss or a job gain during the same period.
Though college has become difficult for Americans to afford, these two studies together emphasize the value of education can have in the job market. It makes sense to employers to require a college degree, and they are doing so in increasing numbers. For young people the message remains that it pays to get a college degree.
But what is the message for the people of Greece? If the U.S. case, life and results is not the best Case Study for the suffering Greek Economy and Greek Education then what is?
President Obama has acknowledged that education and the economy are strongly linked and in fact he has said that “Education is the economic issue of our time”. He chose the Yangon University of Myanmar, in order to make his first speech, after his re-election, and he noted that education was the key to America’s future… that “the future of this country will be determined by the education of its youth.”
What does Greece have to do after listening to such strong statements from world leaders urging Education to be put first if we want a healthy and sustainable future?
Is investing in education really worth it?
Students from across the globe enrol in American universities with one goal in mind: to obtain a top-quality education and degree which will open the doors to a successful and fulfilling professional career. They key to really understand and evaluate an education’s worth is looking at its value over a lifetime. People who have obtained a college degree will earn an average of 74% more over the course of their lifetime than people who have not. “These graduates not only have refined skills and expanded opportunities in the job market, but have become a beacon of light for family members and friends who might need extra motivation to change their own circumstances. They change assumptions about education for future generations which changes the economic future,” said Mr. Jayson Boyers, the National Division President of the Chef’s Academy at Harrison College, located in Morrisville, North Carolina and Indianapolis, Indiana at his article “Is higher Education Even Worth It?”
But now let’s see the numbers at an almost jobless Greece. Let’s look at the picture and the real life that these numbers represent, now that we know the U.S. case study and findings from a country whose culture and future is based in the educational advancement of its people.
The numbers at Jobless Greece:
- Unemployment rate has almost tripled since September 2009
- Unemployment climbed to a new record of 26% in September 2012 – from 25.3 % in August of the same year and 18.9% from the previous year – topping that of Spain’s (25.8%) to become the highest in the Eurozone area
- Unemployment among those aged 15 – 24 stood at 56% in September, compared with 22% of the same month, four year ago
- A record 1.3 million Greeks were without work in September 2012, up 38% from the same month of 2011, according to the Greek Agency for Statistics (ELSTAT).
- Unemployment is more that double the euro zone average of 11.6%
- Jobless rate will reach 29% next year, according to the country’s largest labor union, the GSEE
- Greek economy is now in its fifth year of recession and is expected to have shrunk by almost a quarter before recovery begins in 2014, according to Greece’s Central Bank
- Historically, from 1998 until 2012, Greek Unemployment Rate averaged 12.3% reaching an all time high of 26% in August 2012 from a record low of 7.20% in June 2008.
- In just one year 357,000 positions were lost
Bellow you can see the dramatically unemployment raises from the year 2008 to 2012:
“The money being taken out of the economy due to higher (taxes) is driving the recession. So more businesses will close, more people will lose their jobs and fewer graduates will find work”, said Savvas Rombolis, head of GSEE.
But, where some numbers and lives are suffering some other numbers are thriving, showing the great imbalance and dichotomy of Greek society, where we have major segregation of interests, conflicts of interests, of life style and standards. The segregation is so strong that there are no win-win situations and “out of the box” thinking, but each individual and group tries to secure their own place under the sun without looking for cooperation and compromises in order to collectively “get out of the tunnel” and see the light of prosperity, and the results of science, innovation, productivity and competitiveness.
Where does education stand in the midst of this entire dramatic situation? The answer is “in the eye of the cyclone”, where the biggest fights and conflict of interests reside. But let’s see in summary where the paradox in Jobless Greece lies, which also reveals the source of solution:
The Paradox in Jobless Greece
- Taking into consideration that the greater public sector unemployment is virtually non existent, unemployment in the private sector affects close to 1 in 3 employees
- Competitiveness thought has already improved substantially: Greece recovered in the last two years almost 80% of the competitiveness gap that was created during the previous years.
- In 2012, Greece gained 22 positions in the “Doing Business” ranking of the World Bank
- 40% of the government deficit has been slashed
- Greek ship-owners control around 18% of the world fleet
The Tsunami of Greek CV’s
A tsunami of Greek CVs are being sent to Recruiting Agencies for work inside and outside of Greece
Although this tsunami shrank to a simple wave from 2011 to 2012, currently 80% of employees are declaring that they will stay in their current jobs this year, despite last year’s declarations, where 65% were planning to leave Greece, seeking for jobs abroad.
The Talent Paradox worldwide
According to the international research of Deloitte (Deloite Review 2012):
- Despite high unemployment, many companies are increasingly having trouble filling job vacancies. Example: Over 3.2 million job positions remained unfilled in the United States as of July 2011
- The shortages often occur in critical, skilled positions that have high entry barriers and are crucial to a company’s success
The talent paradox is that “while there is a surplus of job seekers, some companies are facing shortages in critical areas where they most need to attract and keep highly skilled talent.” Therefore, high unemployment rates do not mean that the talent you need will be there when you need it.
According to the research, companies face a labor market where, despite high unemployment, they still need to focus on attracting, developing, managing and retaining their critical employees who have opportunities to leave for higher salaries and more varied job roles and experiences. As the economy improves, we expect employees with critical skills will begin to leave their employers in larger numbers based on historical turnover after recessions and recent Deloitte research that suggests only 35% of global employees surveyed expect to stay with their current employers.
This is already happening in Greece, where the most talented and educated professionals are moving out to Europe, Canada, United Arab Emirates etc. Over 16,000 professional have already moved to Germany.
What do the Greek and International HR sectors say:
According to a recent HR research* of ICAP, Greece, we have:
- Continued wage cuts, while reducing working hours or working days is considered the best way to reduce labor costs
- The majority of businesses maintain or increase spending on education, particularly that which is directly related to the job!!!
- The individual performance and the performance of the department is playing an increasingly important role in most production sectors (other than traditional sales field)
- Internal employee satisfaction surveys are proliferated
*The companies who participated in the research where 58% Greek and 42% International with over €100 million turnover, 53% with over 250 employees, 30% of the Service sector, 21% Commercial, 9% financial, 18% pharmaceutical, 15% Fast Moving Consumer Goods, and 6% from technology or other sector.
“While there are continuing changes in employment and wages, there are some elements of stabilization in the area of Human Resources, such as Education and interest of companies to more modern and economic management of Human Resources through electronic HR systems”, said George Haros, Executive Director of ICAP People Solutions.
Daniel Gruneberg, co-founder of the daily deal site Zozi, notes that “there are a lot of ideas, but to actually do it you need someone to build it”.
In Greece – according to the latest findings of the Randstad Workmonitor survey for the 4th Quarter 2012, explored employee expectations for 2013 – the economic situation is still clearly dramatic. More or less all employees (98%) in Greece indicate that the situation is bad compared to the global average of 61%. Employees in other countries where they believe that their situation is also bad are Spain (96%), Hungary and Italy (both at 94%). Generally European countries outside the Eurozone are performing considerably better and agree to the statement that the economic situation in their country is ‘good’, particularly in Norway (94%), Switzerland (87%) and Sweden (74%).
- Only 12% of Greek employees expect the situation to improve. In Greece, 44% of employees surveyed believe their employer is performing well and only 32% expect that the financial performance of their employer will improve in 2013 compared to 2012.
- Only 14% of employees expect a pay raise in 2013. Based on their performance in 2012, 68% state they deserve a reward and only 15% expect to receive it in Greece.
Confidence in finding a new job in Greece
Of those surveyed locally, 36.7% expect that they will be able to find a comparable job within the next six months which is very similar to the Q3 result of 35.7%. Over the past three years we have noticed a drop of 21% in the confidence levels of employees believing they will be able to find a comparable job from 58% in 2010, 44% in 2011 and 37% in 2012.
The latest Workmonitor survey found that 52% of Greek employees are satisfied about working with their current employer, a decrease of 2% from the last quarter. Women continue to be the most satisfied (58%) as opposed to men (49%).
The sample size in Greece was 405 interviews, using Survey Sampling International. Research for the fourth wave in 2012 was conducted from 18 October to 6 November 2012.
What does the Organization for Economic Co-operation and Development (OECD) recommend for Greece’s sustainable recovery?
Let’s see first Greece’s picture in the OECD’s Science and Innovation map. It shows where Greece stands. Greece’s pros and cons are evident, and why the country has so many cons in Science and Innovation. The answers are obvious.
In 2011, Science is below mid-range of OECD values, but we reached the median level in Publications in the top-quartile journal (per GDP). And there is an explanation for the last one. The Ministry of Education made a great effort in this sector by appointing a Deputy Minister with Science and Innovation portfolio, along with the responsibility to reform the system of Higher Education in Greece.
OECD – Competences and Capacity to Innovation in Greece
But in the Business Sector, the R&D and Innovation in Greece hit rock bottom, when in Entrepreneurship Greece is just on the edge before touching the bottom grey area.
What is the Interaction and Human Resources for Innovation in Greece?
In the Internet and Innovation sectors, Greece is in the bottom half of OECD rankings, very close to the mid-range for Fixed broadband subscribers and Wireless broadband subscribers (per population), but on the other side very close to the bottom on Networks and E-government readiness index. For the last one, we have to admit that Greece for the fist time in her history and within almost two years, introduced to the public sector the E-government procedure (OpenGov, the digital school, electronic applications for the National Examination System, established the “Diavgeia” (Clarity) and “Diafaneia” (Transparency) to public and financial transactions in Government, Public Sector, Medicine Prescription System, etc.)
In Knowledge Flow and Commercialization, Greece is in a safe bottom half place for Industry-financed public R&D expenditures and International co-authorship, but she hit the bottom in Patents filed by universities and the public. The good news is that International co-Patenting is the only sector that Greece is well positioned (above the OECD middle range) and close to the top.
As for Human Resources, Greece is in the middle of the bottom half in the Adult population at Tertiary education level and close to the bottom – in the middle of the bottom area – in S&T occupation in total employment. As for the 15-year-old performance in science, Greece is unfortunately in the grey area of the bottom. So Science and Technology teaching in Greek High Schools are very poor, where the Doctoral graduation rate in science and engineering is close to the end.
For a sort glance in the above analysis, see the table bellow:
OECD – Interaction and Human Resources for Innovation
According to OECD, Greece is still in a deep and protracted economic recession. In response, the Greek government has embarked on fiscal consolidation and structural reforms. Improving framework conditions for innovation and overcoming serious weaknesses in the innovation system are critical for regaining competitiveness and sustainable growth.
The National Strategic Plan for Research and Development 2007 – 2013 defined as the main STI policy priorities the improvement of R&D capabilities (investment, human capital, infrastructures) and promotion of links between research and industry to accelerate the dissemination of innovation. It also aimed at increasing participation in international (especially European) programs.
According to OECD, the Greek governance system shows weaknesses in policy co-ordination and evaluation. Institutional changes in 2009 include the move of the General Secretariat for Research and Technology (GSRT) to the Ministry of Education, with a view to building a unified area of education and research.
What are the major issues in Greece’s educational system?
Participation rates in early childhood education and care are low, reflecting supply and quality problems as well as social preferences for home care. Weak PISA scores (OECD score system for International Student Assessment), point to quality problems at primary and secondary levels. Problems reflect poor incentives for teachers and the lack of rigorous requirements for “in-service teacher training”. They are reinforced by shortcomings in the curricula of key competencies, which lack preparation to students for their post-school life, especially in vocational and technical education.
OECD Recommendations for Greece’s Education and Sustainable Economy
High educational outcomes are of major importance for raising productivity and living standards, thus ultimately allowing Greece to realize its economic potential. Despite progress over the past decades, reforms remain necessary to improve education quality in all key levels of education. Recommendations rely on Early Childhood Education and Care, Primary and Secondary School reform and Tertiary Education:
Early childhood education and care
- Proceed with the implementation of recent steps to develop a regulatory framework and modernize the operation of the childcare sector by setting technical standards for premises, and developing a pedagogical program for pre-school education
- The supply of services, especially for children under 3 years old, can be increased by eliminating bottlenecks that limit the daily hours of operation and the diversity of services.
- Providing universal access to early chilhood education for 4 year-olds would be in line with international trends and would ensure an affordable place for all children who need it.
Primary and secondary school reform:
- Increase primary and secondary school autonomy and accountability, as well as teacher incentives and accountability. For instance, by increasing the low student to teacher ratio could release resources to reward good teachers
- Improve the curriculum in secondary and vocational education, better equipping students with the competencies to succeed in their post-school life
- Upgrading upper secondary school curricula and changing the system for entering university are of great importance
- Enhance competition in the higher education sector through an amendment of the Constitution to allow operation of private universities. Introduce reforms to improve the way education systems are financed: The funding of institutions could be related to simple and transparent indicators of performance, helping to boost efficiency. Looking at different options that emphasize the focus on diversification of resources and equity issues, as a means to ensure that access by less affluent students is eased.
For sustainable Recovery:
- Place a greater emphasis on activating the unemployed, especially youth and women.
- Higher participation in job-search training should be required and the mutual obligations principle should be applied
- Target existing employment subsidies on the most disadvantaged youth and ensure training is offered by the employer
Education is the only way to break the cycle of generational poverty. An education gives people an understanding of what they can do for themselves and how they can make needed changes in their lives. Simply giving away money never teaches the skills of principles that come with obtaining an education, according to Mr. Jayson Boyers. “Education is the single greatest catalyst for lasting change on our society. We must commit to obtaining our own, and helping others gain access to quality education. It is the only way for sustained personal and professional success.”
- http://www.forbes.com , “Where Unemployement Is Highest, Education Is A Big Part of Why”, by Susan Adams, August 29, 2012
- Huffington Post, Education, “Education Is a Viable Solution to the Jobs Crisis”, by Michell Asha Cooper, PhD, President of the Institute of Higher Education Policy, December 8, 2012
- Huffington Post, Education, “Is Higher Education Even Worth It?” by Jayson Boyers, President of the Chef’s Academy at Harrison College, October 30, 2012
- www.universityworldnews.com , “Obama visit to Yangon University boosts revival plans”, by Naw Say Phaw, November 22, 2012
- Deloite Review, “The Talent Paradox: Critical Skills, Recession and the Illusion of Plentitude”, by Robin Erickson, Jeff Schwartz and Josh Ensell, issue 10, 2012
- www.oecd.org Organization for Economic Co-operation and Development:
- Education at Glance 2011,
- OECD Science, Technology and Industry Outlook 2012:Greece country profile
- Greece at glance: Policy for Sustainable recovery
- Education Policy Advise for Greece
- ICAP Group, HR Pulse Issue: Training and HR Technology trends are stabilizing”, October 18, 2012
- ICAP Group, Press Release: “Education is stabilized and HR Technology develops”, October 2, 2012
- ICAP Group, Employment Study: “For the First time, fewer than 4 million at work in Greece:, November 7, 2012
- Randstad Hellas, http://www.randstad.gr/en.php?pageid=145, December 12, 2012
- www.morningwhistel.com , “Greece seeks deeper cooperation with China”, by Chen Xiaoyi, November 30, 2012
- Ta Nea Online, November 28, 2012
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