For us economists this offers an interesting case study for theories of technological change and highlights the importance of demand growth and labor costs as fundamental determinants of productivity growth. 8/8

On the other hand, these activities are characterized by low productivity and are associated with broader challenges such as environmental degradation, cultural erosion, and rising living costs (think of overtourism, Airbnb, etc.). 7/8

The café economy presents a core dilemma. On the one hand, the Greek economy has become increasingly dependent on it as a key source of employment and foreign income. 6/8

The recent adoption of the 13-hour workday goes in the same direction. 5/8

In fact, the reduction in real wages (as a result of labor market reforms) has contributed to this productivity stagnation. Economic theory tells us that when labor is cheap, firms have little incentive to innovate or “save on labor” - it is cheaper to just hire more people. 4/8

This outcome contradicts the stated goals of the numerous “structural reforms” adopted in Greece since 2010, which were intended to foster higher productivity growth. 3/8

These were to begin with low productivity activities, whose productivity also has decreased around 40% over the last 15 years.
The transformation explains the decline and stagnation in the overall productivity which has not followed the economic recovery of the past decade. 2/8

Followed by brilliant work by @mnikiforos.bsky.social @cpierros.bsky.social & others on the incredible proliferation of the food/accommodation sector in Greece after the crisis, its contradictions & consequences that further undermine talk of “recovery” or expressed goals of the structural reforms.