Links: tourism is a growth sector, four years of Greek wage decreases, Spanish economy did worse in 2011, 2012

Tourism is, at this moment, a growth sector in countries like Portugal, Greece, Spain, Ireland, the Baltic states and the UK.  In the UK growth started (predictably) after the large depreciation of the pound in 2008/2009. Despite impressive increase, there are however no signs of ‘supply side constraints’: the number of people working in tourism wanting to work more hours actually increased after 2009, according to the ONS:

• Employment in UK tourism industries increased at nearly double the rate of the rest of the UK labour market between 2009 and 2013 (5.4% increase, rising 143,000 from 2.66 million to 2.81 million)
• Most of the growth in tourism employment was part-time work between 2009 and 2013 increasing 6.8% or 72,000 from 1.06 million to 1.13 million.
• The number of workers who would like to work more hours within the food and beverage serving industry group has increased at over double the rate of the rest of the UK labour market between 2009 and 2013 (49.0% increase, rising 100,000 from 1.14 million to 1.24 million)
• Self-employment has increased at double the rate of the rest of the UK labour market within the UK cultural, sports, recreation and conference activities industry group between 2009 and 2013 (21.9% increase, rising 41,000 from 188,000 to 229,000)
• Temporary employment within main jobs in the UK tourism industry has grown cumulatively by 16.6% between 2009 and 2013, in comparison to 12.5% within UK non-tourism industries (rising 29,000 from 231,000 to 260,000)

Greek wages are flexible. But (just as in the Netherlands in the nineteen thirties) this does not solve demand side problems. In Greece, wages have been declining for four years in a stretch, sometimes at a double digit rate. Despite of this – to a large extent: because of this – the country is to the ropes. Lowering wages clearly is not the solutions to demand side problems. I guess that this will become a text book classic.

Revisions to the Spanish national accounts show larger decreases in 2011 and 2012 (look at cuadro 3). Which is in line with expectations based upon the fast increase of unemployment in those years. Eurozone austerity was even more detrimental than we already thought.