3.1. Profiling and Mapping the Precarious Workers and Precariousness
Utilising microdata from the
Eurostat (
2020) and a set of three variables (low annual labour income, temporary work unemployment, and potential unemployment over one month), workers in Cyprus who were employed in precarious circumstances during 2019 were identified.
Low Annual Labour Income (or low wage) was defined as an income lower than two-thirds of the median gross annual labour income of EUR 10,400.00 (or EUR 800.00 per month for 13 months). In Cyprus, the 13th salary is mandatory and must be paid in case of a collective agreement, a personal contract, or an employment agreement signed upon employment (
Republic of Cyprus—Department of Labour Relations 2021).
Temporary Work corresponded to a work contract with a limited duration. For each precarious worker, his or her potential unemployment duration was estimated regardless of whether she/he was unemployed during 2019. This was accomplished by regressing the duration of the unemployment of precarious workers (observed in 2019) against their individual characteristics.
In this study, it is assumed that a precarious worker in Cyprus who becomes unemployed will suffer severe economic hardships immediately following his or her job loss. Thus, the threshold value of 0 in the analysis was used, but occasionally a value of 1 was also used, merely for sensitivity analysis, resulting in a minimum and a maximum value for the estimated number of precarious workers.
CTA was employed to determine the profile of precarious workers in Cyprus (
Figure 3). A total of 106,888 people had low annual labour income. Assuming that precarious workers face severe economic difficulties from their first day of unemployment, it was estimated that in 2019, there were 37,629 precarious workers, out of which 25,556 were female (approximately 2/3 of all precarious workers). There were 31,983 persons (85% of all precarious workers) who were classified as unskilled or semi-skilled (ISCO categories 4 to 9). Approximately 64% of the temporary workforce was classified as precarious.
Following the findings of this analysis, the economic activities and occupations, as well as the distribution of labour income of the precarious workers, were described. For 2019, the estimated number of precarious workers was between 9.5% and 7.3% of the total employees, depending on the assumption regarding the unemployment duration threshold. Female workers were one to two times more likely to be precarious.
Under the assumption that the economic circumstances of precarious workers in Cyprus tend to change dramatically within a short period of time after being laid off, it is estimated that in 2019, there were 37,629 precarious workers employed in Cyprus (10.5% of all wage earners) of whom 25,500 were women. Under the alternative assumption that a precarious worker’s economic situation deteriorates abruptly after one month in unemployment, the number of precarious workers in 2019 was estimated to be 28,800, of which 20,900 were women.
The level of education of precarious workers is significantly lower than that of nonprecarious workers (tertiary education accounts for 23.1% of males and 33.1% of females, respectively). Approximately 32% of precarious female workers obtained a primary education certificate compared to 9% of nonprecarious female workers.
Two interesting findings emerged. Firstly, female precarious workers were in a significantly more vulnerable position than their male counterparts, and subsequently, females constituted two-thirds of all precarious workers. In part, these findings may be due to the fact that female domestic workers, who were primarily immigrants, represented nearly 40% of all precarious workers.
In total, there were nine economic activities that employed 82.5% of precarious workers, whereas five economic activities (domestic work, education, restaurants, accommodation, and retail trade) were responsible for 70% of all precarious workers (
Table 1). In the distribution of precarious workers by occupation and economic sector, 69.4% of all precarious workers belonged to five occupational groups: Teaching Professionals, Personal Services Workers, Sales, Child Care Workers and Teachers’ Aides and Domestic Workers.
Workers in precarious positions tended to be young (
Unt et al. 2021). In terms of their age distribution (
Figure 4), half of them were under the age of 31, and the average age was 35 (while the corresponding figures for nonprecarious workers were 40 and 42).
Figure 4 provides some insight into the young age of precarious workers in other sectors; half of them were under the age of 29, and the average age is 32 years. By dividing the same population into those who were working in households as domestic personnel and those who were working in other sectors (
Figure 5), it becomes evident that they were even younger: half of them were under 29 years of age and an average age of 32 years. Precarious domestic workers were slightly older than their nonprecarious counterparts, with a median age of 35 years and an average age of 36 years.
Half of them have worked in paid jobs for more than 15 years, with an average of 18 years. Interestingly, the distribution of precarious workers by duration of professional experience (
Figure 4) was quite different; half of them had been employed for less than five years, with the average being 10 years. In the distribution of all employees, the coefficient of variation was 0.7, while the coefficient of variation was 1.1 in the distribution of precarious workers, indicating a concentration of values around the average in this distribution (as can be seen in
Figure 5 and
Figure 6).
Figure 6 indicates the distribution of professional experience among all employees in Cyprus in 2019. The findings suggest that precarious workers accumulated professional experience at a much slower rate than nonprecarious workers (
Figure 5,
Figure 6 and
Figure 7).
By using linear regression analysis (LRA) it was found that professional experience decreased with respect to four variables that appear to be tenuously related to the labour market: temporary employment, change of job since last year, part-time employment, and being unemployed for several months during the survey year.
Moreover, the number of skilled workers (ISCO 1, 2, and 3) in the population of precarious workers is lower than in the population of nonprecarious workers. For many precarious skilled workers, especially those who have completed tertiary education, precarious employment is a temporary but prolonged experience. As depicted in
Figure 6, the number of skilled precarious workers decreases rapidly between the ages of 25 and 40 years. Skilled labour, however, appears to accumulate professional experience more rapidly. As a result of the factors outlined above, the accumulation of professional experience among precarious workers is low (median = 5.1 years) (
Figure 8).
It can be concluded that unskilled and less skilled (ISCO 4–9) precarious workers’ slow rate of professional experience accumulation is part of a vicious circle: precarious work constricts the process of accumulating professional experience, reducing, in this way, the likelihood of obtaining a better-paying, more stable, nonprecarious job. Hence, precariousness tends to reproduce itself, becoming a trap (
Kretsos and Livanos 2016). Thus, the only way to break the precariousness vicious circle is through external forces, such as state labour market policies and/or the involvement of trade unions.
In order to address the issue of the overrepresentation of domestic workers within the total number of precarious workers and in order to control for potential bias, the ability to distort the distribution of professional experience was divided. The results confirmed that the findings applied to both domestic and nondomestic precarious workers (see
Figure 9).
3.2. Factors Affecting Labour Income of the Precarious Workers
Precarious workers’ wages are determined by income, which is the annual gross earnings independent of the number of hours they work. As a proxy for annual gross wage, annual gross labour income was used (net of employer’s social security contributions).
Figure 10 shows the distribution of 37,629 precarious workers by their annual gross wages in 2019. The median annual gross labour income was EUR 4980.00, and the average was EUR 5170.00. Approximately one in four precarious workers earned between EUR 7200.00 and 10,400.00 per year (or EUR 550.00 and 800.00 per month for 13 months). All remaining precarious workers earned less than EUR 7200.00 per year. The proportion of precarious workers within the income range of EUR 4000.00–5200.00 per year was high.
Figure 11 clearly illustrates the distinction between precarious domestic workers and nondomestic workers. More specifically, it shows that those in the range of EUR 4000.00–5200.00 are classified as precarious domestic workers. Based on the assumption that they were paid for 12 months, their gross monthly earnings would be in the range of EUR 350.00–450.00. However, not all domestic workers were precarious, as approximately 9528 precarious and 1500 nonprecarious domestic workers were recorded.
If the income earned by domestic workers is excluded, the average gross labour income for nondomestic precarious employees comes to EUR 5745.00 annually (or EUR 440.00 for 13 months). Half of these workers had a gross annual income of EUR 5032.00 (or a monthly income of EUR 387.00). For 25% of nondomestic precarious workers, the average gross labour income ranged from EUR 8703.00–10,400.00 (or EUR 670.00–800.00 per month over a period of 13 months).
Nearly one in two precarious workers was unemployed for several months during 2019. The average duration was 2.75 months, whereas the median was 3.5 months. Precarious workers were more likely than nonprecarious workers to face prolonged periods of unemployment. In 2019, 19,953 out of 37,629 precarious workers (53%) were unemployed for several months before being re-employed, whereas 48,689 out of 356,610 nonprecarious workers (13.7%) were unemployed for several months before being reemployed.
Therefore, unemployment contributes substantially to the precarious low level of gross annual income and to their ongoing precariousness. As can be seen in
Figure 12, precarious workers’ income decreases in parallel with the duration of their unemployment. As a result of unemployment, income decreases at a constant rate of EUR 630.00 per month. It is pertinent to note that this conclusion applies to both precarious domestic and nondomestic employees (see
Figure 13).
Utilising LRA, the factors contributing to the low wages of precarious workers were identified. These variables originate from the
Eurostat (
2020) (
Table 2), and the results are presented in
Table 3.
Table 4 shows the variables used in the regression, and its results are presented in
Table 5. It can be noted that the duration of unemployment and the number of hours typically worked each week were factors that affected the gross labour income of precarious workers. This is because unemployment duration both increased and decreased the number of hours of actual paid work in 2019. Domestic work paid significantly less than the average for other occupations. Professional experience and skilled work (ISCO 1, 2, and 3) raised wages and income, whereas changing jobs was penalized.
Based on the results of the preceding regression, the internal divisions of the population of precarious workers were examined. For the authors of this study, the separation of precarious workers into domestic workers and nondomestic workers is of fundamental importance since domestic workers represent slightly less than a third of precarious people and perform their duties in unusual and idiosyncratic circumstances. For this reason, the CTA examines domestic and nondomestic segments separately (
Figure 14 and
Figure 15).
Figure 14 illustrates the internal divisions of precarious domestic workers. Among the 9.528 domestic workers (with no missing values), the average gross annual income is approximately EUR 4400.00. Of these individuals, 5545 had more than five years of professional experience and earned an average gross annual income of EUR 4800.00, while 3983 had less than five years of professional experience and earned an average gross annual income of EUR 3839.00. The income gap between the two groups of domestic workers was approximately 25% of the income of the less experienced.
Being unemployed for several months during the survey year is regarded as the second most significant internal divisional characteristic among domestic employees. The average reduction in income resulting from unemployment is 50%. Additionally, the third most important divisional characteristic can be attributed to the stability of employment relations. In particular, as a result of changing jobs within the last year, the average gross income was reduced by 25%.
It is noteworthy that two out of the three most important divisional characteristics refer to the stability of the employment relationship, which, in the event of a break (whether by choice to find a new job or by unemployment), is heavily affected in terms of income loss. This presumably can explain the empirical observation that domestic worker employment is less frequently interrupted by unemployment when compared to the corresponding unemployment of nondomestic workers.
Figure 15 illustrates the internal divisions within precarious employment rather than domestic employment. There are four classification variables, which are considered the most important: skilled and unskilled workers (ISCO 1, 2, 3), as well as unskilled or semi-skilled workers (ISCO 4–9), professional experience, full-time employment, and unemployment for several months during the survey year (2019). The first two classification variables are related to skills, knowledge, and the accumulation of experience, whereas the last two are associated with the continuity of an employment relationship. The division of the precarious nondomestic workers into four subgroups (see
Figure 15) demonstrates that a small group of approximately 1000 (5.3%) skilled (ISCO 1, 2, 3), longer professional experience employees who earn an annual labour income of EUR 7629.00 were compared to approximately 3200 (17.1%) skilled, shorter professional experience employees earning EUR 5391.00. With respect to unskilled or less skilled labour (ISCO 4–9), 77.6% (14,445 individuals) of those who worked full-time in 2019 earned EUR 6345.00, while those working part-time earned EUR 4704.00.
3.5. Focus Group
When taking into consideration the complex nature of the phenomenon under study, it was decided to employ a qualitative analytical framework through the utilisation of a focus group. The participants of the focus group discussion perceived the concept of precariousness as a wide spectrum of people who might share some common characteristics but, at the same time, demonstrate very important differences. Thus, they argue that perhaps the focus should be on defining the characteristics and implications of precariousness rather than strictly specifying certain social groups. Nevertheless, they agree that if the population groups included in the spectrum of precariousness are to be identified, they should include migrant workers, most self-employed workers, as well as new labour market entrants.
Regarding immigrant workers, the discussion focused on two large groups of people living and working in conditions of precariousness in Cyprus: domestic workers, the vast majority of whom are women and land workers. Despite the fact that the working conditions of domestic workers are described in their employment contract, the responsibility for ensuring compliance with the terms of the contract does not lie with the Ministry of Labour and Social Insurance but with the Police and the Migration Department (Ministry of Interior). Employers and private employment agencies are able to comply with or violate their contractual obligations without any consequences, thus setting domestic workers at a higher risk of precariousness. In addition, until 2019, domestic workers were contractually not allowed to be members of trade unions in Cyprus. Even after 2019, when this provision was deemed unconstitutional, there are no domestic workers among union members. In order to reverse these extremely unfavourable conditions for domestic workers, participants suggested that unions should try to effectively incorporate domestic workers into their ranks through targeted campaigns. Finally, a crucial issue is that the whole process of regulating domestic workers’ employment—from the issuance of employment permits to the monitoring of their employment conditions—should become the sole responsibility of the Ministry of Labour, as this is the case for all other employees.
Land workers who work–and very often live–on farms also face similar issues. According to the participants, there is no monitoring of whether the terms of their employment contracts are implemented, both regarding their salary and the living conditions standards (housing, food, other resources, etc.). It was suggested that the way to deal with the issue would be to set up and operate a wide range of joint control bodies consisting of Ministry of Labour officials, trade unions, and agricultural organisations. The focus group participants also considered it crucial to elect migrant workers from the most affected sectors of labour to key positions within the trade union movement.
Regarding self-employed workers, participants note that a very large proportion of them are included in the spectrum of precariousness because they are, in fact, pseudo-selfemployed professionals being forced into this employment status by their employers to escape from their responsibilities (clearly defined salary and working hours, health care, accident insurance, access to unemployment benefits, severance pay, etc.). This status of fictitious (or false) self-employment includes a very wide range of employees from delivery workers to the employees of the wider public sector (e.g., teachers) who have the same job duties as their full-time colleagues but do not enjoy the same employment status.
In addition, genuine self-employed people live in precarious conditions, as they do not have guaranteed jobs and/or income for the next period. The phenomenon of pseudo-selfemployment has reached alarming proportions as it is often imposed not only by private employers but also in the public sector. On the other hand, a small percentage of employees who have the expectation of greater immediate earnings also accept this situation. Utilising a “carrot and stick” method, employers often try to tempt them with slightly higher earnings if they accept to work on a self-employed status. This short-term benefit is nullified by the expulsion of all the provisions entailed in an employment contract. According to the participants, there is a need to highlight the issue of the pseudo-selfemployed workers in Cyprus, but also to highlight the pitfalls of accepting a short-term personal economic benefit to the detriment of medium–long-term individual and collective interests.
According to the focus group participants, most new entrants in the labour market are employed in precarious jobs and are likely to continue being in the same situation for many years. This is particularly true in workplaces or sectors where no unions exist or they are very weak. As a result, collective claims require the simultaneous action of new entrants and unions. In other words, new employees need to take up the initiative for a trade union formation, and at the same time, the unions need to support them decisively and effectively in the face of the most likely hostile reactions of the employers.
Focus group participants also asserted that in order to deal with the negative consequences of precariousness, all employees in Cyprus should be entitled to a legally guaranteed minimum wage and adequate employment conditions, even if a sectoral collective agreement is not in force. However, according to a participating trade unionist, the provision for a national minimum wage should only apply to employees who are not covered by sectoral collective agreements. That is, when sectoral agreements are in force, the salary provided by the contract should be provided, whereas, in cases where no such agreement exists, the national minimum wage should apply. The trade unionist made explicit reference to the fact that, with the current conditions in the labour market, it is more likely that wages will be driven down by the horizontal application of a minimum wage. The trade unionist refers to the sectoral collective agreement in the construction industry, which sets the full-time salary of semi-skilled workers at EUR 1800.00. If a horizontal minimum wage that prevails over a sectoral agreement was established, employers would only have a legal obligation to pay the minimum wage, which would definitely be significantly lower. Along with the establishment of a national minimum wage, the expansion and legal establishment of collective agreements should be claimed in as many labour sectors as possible.