Social Economy and Employment

Social Economy and Employment

The phenomenon of unemployment emerged at the same time as salaried labour, as a symptom of the mechanisation of production during a period of rampant competition among the industrial states of western Europe in the 19th century. This was considered a “temporary inconvenience” (Smith, Malthus, J.S. Mill), while the economic and political elite blamed the unemployed themselves for their situation. As a term, “Social Economy” was first encountered in 1830 in “Nouveau traité d’économie sociale” by French economist Charles Dunoyer, while in 1896, Leon Walras stated in his “Études d’ Économie Sociale” that the SE is an area of activity of cooperatives and mutual insurance associations. Efforts to establish cooperative entities had succeeded in the past, initially in Great Britain and, more specifically, at industrial centres with a view to ensuring food would be available to low prices for the workers and unemployed living in such areas.

In the 20th century, after the two World Wars, Europe was gradually recovering until the late 1970s. However, new economic turmoil and international crises led to a significant decrease in employment, creating stagflation. The field of Social Economy was instituted during this period of economic and social problems. Initially, in France, an interministerial delegation on the SE (Délégation interministérielle à l´ Économie. Sociale – DIES) was established in 1981 during the presidency of François Mitterrand and the first text on SE was prepared. This was followed by decrees and decisions of the European Union on the SE and Social Entrepreneurship, while many Member States adopted relevant laws, linking the SE with labour integration. Today, according to European Commission and Social Economy Europe[1] data, there are 2.8 million social economy enterprises (SEEs) in the European Union, accounting for 10% of all enterprises. SEEs employ approximately 14 million workers, i.e. accounting for 6.3% of employment and producing 8% of the EU’s GDP. 

In Greece, approximately 1,800 Social and Solidarity Economy (SSE – KALO) entities appear to be currently in operation and, under the applicable Law 4430/2016, include Social Cooperative limited liability enterprises (KoinSEp and KoiSPE) and Workers’ Cooperatives, as well as other non-profit volunteer bodies, such as Civil Non-Profit Associations (AmKE), various foundations and associations. As established by field research and a recent qualitative study carried out in 2019 (S. Katomeris, 2022), KoinSEp and KoiSPE, in particular, are established and operate with a view to the labour integration of their vulnerable members (persons with motor, sensory and mental disabilities) and/or special groups (long-term unemployed, single-parent families, middle-aged and young unemployed persons, abused persons, etc.). 

At present, despite the adoption of two laws since 2011, the majority of SSE entities are facing operational and viability problems, in contrast to the progress achieved by entities in the rest of Europe. More specifically, according to a recent (31 May 2020) report of the Ministry of Labour[2] on the Social and Solidarity Economy and its status at that time, entities appear to be economically weak, with poor labour integration results (2020:67-8). The report found (Table 1) that in 2018, over half the entities (56.9%), i.e. 366 out of 643, declared zero or very low turnover (0 to €10,000), while only 14% (92 out of 643 entities) declared a turnover exceeding €50,000.

The same report underlines that of the 92 entities with a turnover exceeding €50,000, 65 were Collective and Social Benefit KoinSEps (out of a total of 1,564), 15 were KoiSPEs, 7 were AmKEs, 2 were Vulnerable Group Integration KoinSEps and 2 were Civil Cooperatives under Law 1667/1986.

The results of the report also highlight the limited employment capabilities within SSE entities, mainly due to the reported economic challenges they face in their operation. More specifically, out of a total of 1,419 entities measured, 1,018 (i.e. 71%) declared no workers (table 2). Of the remaining 401 entities with employment capabilities in 2019 (being, in fact, 223 fewer than the 624 measured in 2018), 255 employ 1 to 3 workers, 123 employ 4 to 10 and just 23 entities employ more than 10 workers (2020:61). Employment (until 31 May 2020) corresponded to 1,577 annual work units (AWUs: full year-round employment) and does not suffice to employ all 9,319 members of these entities. The average of 1.1 AWUs clearly demonstrates the failure to achieve the key objective of employing the entities’ members, as the average per entity is approximately 6.6 members.

Table 2. Number of SSE entities and employment in May 2020

Today, in Greece, the results of the SSE sector seem, in contrast to the EU average, virtually undetectable, as social enterprises account for just 0.8% of all enterprises, 0.03% of the GDP and 0.07% of employment. During a period when the unemployment rate in Greece is, according to Eurostat, double the EU average (2021: EU-27 7%; Greece 14.7%), the effective operation of SSE entities is more vital than ever.

The aforesaid negative trend of the SSE sector and its entities (mainly Social Enterprises) seems to be due to numerous factors. However, the most significant factor is the failure — by the Greek State — to implement Law 4430/2016 and, more specifically, application by the public sector and local government authorities of institutional regulations and the specific provisions of Chapter III ‘Support measures for Social and Solidarity Economy entities’. For example, the provisions on cooperation between SSE entities and local government bodies and bodies governed by public law (programme agreements, concession of fixed assets, etc.) are not being implemented. With very few exceptions, civil servants and persons elected to local government seem ignorant, unprepared and uninformed with regard to the necessity, capabilities and benefits of the public sector – SSE entity cooperation provided for in law.

In summary, a survey completed in 2020 indicates that the adverse situation and general operating deficits of entities have three root causes: a) failure by the Greek State to implement the SSE institutional framework; b) information gaps among society, civil servants and local government officials on Social Enterprises and their role; and c) the current under-representation of entities at the regional and national level by multilevel bodies for the purpose of engaging in dialogue with the state and seeking the implementation of the institutional framework (Katomeris, 2022).

Bibliography

• CIRIEC, (2012), The Social Economy in the European Union, Brussels: EESC
• Engels, F. (2006) Socialism: Utopian and Scientific, Athens: Marxist Bookshop Press
• Garraty, J.A. (1979) Unemployment in History: Economic Thought and Public Policy New York: Harper & Row
• Katomeris, S. (2022), Social Economy and Employment: The Case of Greece in Times of Crisis, doctoral dissertation, Panteion University
• Katomeris, S., Tsilikis, Ch. (2022), SSE Strategic Plan, e-book, Athens
• Polanyi, K. (2007), The Great Transformation: The Political and Economic Origins of Our Time (trans. K. Gaganakis), Athens: Nisides Publications

Links

2019-2020 Annual SSE Report: https://kalo.gov.gr/wp-content/uploads/2020/11/ΕΤΗΣΙΑ-ΕΚΘΕΣΗ-ΚΑΛΟ-2019-2020-TELIKO-docx.pdf

Law 4430/2016: https://www.kodiko.gr/nomologia/document_navigation/242234/nomos-4430-2016