Misleading data on the “Greek Crisis”

I recently read an article by a fellow steemian. In essence, the article’s about the long-lasting effects of the latest world economic recession on the Greek economy. If you’re interested in this sort of thing—even if largely ignorant on the subject—I recommend you take a look. The information isn’t new, but the effort put into making it freely available in a concentrated package is admirable.

To give you the TL;DR version of the article, it’s basically a collection of statistical data (in the form of pictures) and assertions about the negative effects of the latest economic recession on the Greek people. Most of it can be found circulating the Internet in bits and pieces, which means the author did some data collection at the very least. I find most of this information to be poorly sourced and potentially misleading, and so decided to write a lengthy reply. The reply was so lengthy, that it naturally evolved into a post.

So why bother replying anyway? The reason is simple: I want more people—especially young and bright Greeks—to realize how easy it is to misinterpret statistical data. This isn't just important in avoiding personal biases, but also crucial in becoming more aware of dangerous rhetoric used by populist politicians. This is especially true for the Greek political scene, which insists in overwhelmingly putting the blame on anyone but the Greek economy itself for the sad state it's still in.

While I'm very much in favor of spreading awareness—especially on platforms like Steemit—about the “Greek Crisis,” I advice caution to all that decide to walk this dangerous path. There's lots of misinformation surrounding this rather sensitive subject, and it's very easy to misinterpret relevant statistical data. We need to reason carefully and draw conservative conclusions, avoiding unnecessary generalizations that polarize audiences unfamiliar with evidence-based and probabilistic reasoning.

So, without further ado, let’s take a closer look at some of the (potentially) misleading points mentioned in the article:

Greek unemployment rates between 18-27 are at 50.5 %

I know this may sound weird, but this figure doesn’t necessarily mean that roughly half of all Greeks aged 18-27 don’t work. It also doesn’t mean that about half of all Greeks in this age group want to work but can’t, which is the kind of idea people get when they see statistics like that being pulled out of a magic hat.

What the above figure actually means, is that statistics based on official records—gathered by, e.g., the National Statistical Authority of Greece—indicate that almost half of all Greek taxpayers aged 18-27 aren’t documented as being employed by a recognized legal entity (business or company). In other words, it doesn’t take undocumented labor into account, which is still a common and widespread phenomenon in Greece.

To see why unemployment figures can be very misleading, let me mention a couple of points here that are relevant to Greece:

1. At age 18-27 the majority of available jobs are in the tertiary sector: basically cafeterias, restaurants, and hotels. These businesses are notorious for not insuring their workers, which, though illegal, is—given the state of the Greek tax system—more desirable for both parties involved.
2. Roughly 40% of all Greek highschool students go into higher education, which lasts 6 years on average. During this period it's considered unusual to work full-time, while part-time jobs are mostly in the tertiary sector, and thus largely undocumented (see point above).

Adjusting for the slight age group difference, I'd actually expect the officially-documented (overall) unemployment rate to be at least 25% for ages 18-27, since most of the (pretty limited) student labor is undocumented. Even if undocumented labor among the remaining (non-student) body is as low as 25% but everyone is actually employed, I’d expect an officially-documented (overall) unemployment rate just north of 40%. Long story short, Greeks are late bloomers when it comes to penetrating the job market.

To summarize my above points, a 50.5% unemployment rate shouldn’t be interpreted as half of all young Greeks wanting but being unable to find a job. Most of this percentage could arguably be attributed to undocumented labor, leaving just a small increase in unemployment that’s probably directly attributable to the latest economic recession. And then there’s the issue of the crisis being global in nature, which means that an increase in unemployment is to be expected.

While I agree that high unemployment is undesirable regardless of interpretation, a more realistic interpretation reveals a number of concrete suggestions for reducing it:

1. Push for further tax reforms, so that: (a) small businesses can better deal with the bureaucracy of insuring their workers, (b) workers can afford losing a small percentage of their income to get insured, and (c) people get insurance with tangible benefits, making it a desirable option.
2. Push for reforms in higher education, so that the 6-year average student education reduces to 3 or 4 years, which is the norm in Europe. This would put more pressure on students to start actively looking for a job at a younger age.
3. Allow at least some private money to flow into public schools and universities, and give businesses room to scout for talented students. Unfortunately, daring to even suggest allowing private interests to enter the Greek education system is (still) met with fierce opposition.

Strangely enough, that’s more or less what most other EU countries have been consistently calling for since 2009: reforms, reforms, reforms. Education and tax reforms are absolutely crucial, and yet every regime since then (Papandreou, Papademos, Samaras, Tsipras) has failed to make a tangible breakthrough.

First quarter reports say that 70000 jobs were lost.
Americans would be on the streets by now.

I'm not so sure about the latter. Scaling up for population, a loss of 70 thousand jobs in Greece is equivalent to roughly 2 million jobs in the US (assuming “Americans” refers to US citizens). What are the corresponding data for the US during the same period?

According to at least one source I could find, the number of jobs lost in the US during the various quarters of '08 and '09 measured in the millions. So no, I don't think Americans would be on the streets if they happened to get hit by a (properly scaled-up) Greek-style economic crisis, because a lighter version of it is essentially what they got. The “Greek Crisis” wasn't a uniquely Greek thing: the Greek economy was just too weak to handle the aftermath of a global recession.

28 billions were given to the banks.
Wont even comment on that

Well, scaling up, that’s like saying the US went for a 1-trillion-$ bailout package. Which isn’t that far from the actual value (700 billion or so), demonstrating yet again that loss of jobs and bailout packages aren’t a uniquely Greek thing. What is uniquely Greek about the number quoted above, is that Greece’s economy couldn’t handle it: A disproportionately large (adjusting for population) cash injection was needed to stop it from crashing.

Alcohol consumption,suicide rates,violence and mental disorders rose to all time heights.
Probably the saddest of all

Not trying to be a dick here, but not including relevant sources is kind of unfair. In fact, according to the World Health Organization (WHO), Greece has one of the lowest suicide rates per 100,000 people in the world. And that's based on 2015 data, so well into the latest economic crisis. So in terms of not committing suicide, we're in the top 10% or so, both before as well as after the latest recession. That's hardly reason to celebrate, of course, as there's still people taking their lives.

But this shows that the “Greek Crisis” didn't increase the suicide rate to very high levels like South Korea (about 4 times higher than Greece's post-crisis figure). So maybe the problem is that the latest recession caused a big percentage increase in the suicide rate? According to one (open) article I could find, the suicide rate in Greece jumped by about 35% because of the latest recession. For the UK, the increase was about 14%. Is such a difference really so significant as to warrant playing the Greek victim card?

I didn’t bother researching the change in alcohol consumption, violence (how do you measure something that broadly-defined, anyway?) and mental disorders. The rest of the article also mentions the migrant crisis, but going into that direction would require an article of its own. By now you’re hopefully starting to see the pattern, though: Pieces of information like the ones I tackled conjure up images of Greece suffering at the hands of evil.

Nobody really denies that, in quite a few cases, the latest economic crisis caused some extra damage to Greece compared to other countries around the world. Since this is a systematic effect, people instinctively see it as part of a sinister plan. But as long as this hypothetical enemy doesn't reveal itself and remains undefined by the people who vow for its existence, it makes little sense to keep chasing hypothetical shadows.

I think it's time Greeks started realizing no one's after them. No one's even expecting something special from them just because they're Greeks. Everyone has their own things to do, and most countries have recovered from the latest recession. At some point, Greece has to get its act together and start doing what desperately needs to be done: extensive, long-term tax and education reforms. Otherwise she'll be left behind in a world that keeps moving forward at an ever-accelerating pace.