By Matt O'Brien
April 10 2015
In the last seven years, Greece's economic collapse has wiped out all the progress its poor had made in the 28 years before that.
Now there are a lot of ways to think about how historic Greece's recession has been. Its economy has fallen about as much as the U.S.'s did during the Great Depression. Its unemployment rate peaked at 28 percent. And, as Derek Thompson points out, its cities have become filled with smog during the winters, because its people can't afford to heat their homes any other way than burning whatever they can get their hands on. But think about this last one. It probably gets us the closest to having a real idea what it's been like to live through Greece's slump.
Well, other than the chart above. It shows how much money Greek people from the richest to the poorest 10 percent have had after accounting for taxes and inflation the past 40 years. The simple story, as you can see, is that there was a big jump for everybody after the junta was pushed out in 1974, a big stagnation from the mid-80s to the mid-90s, an even bigger jump, especially for the rich, after that, and then a big crash that's erased 30 years of gains—or more. Greece's rich have done a little better than the rest, with their real disposable incomes "only" falling to 1985 levels. But its poor have fallen even further, all the way back to where they were in 1980.
That's why it's no exaggeration to say that Greece really does have a humanitarian crisis on its hands. The left-wing Syriza government has made this a priority—they want food stamps for the hungry, healthcare for the sick, and electricity for people who can't afford to keep on the lights—but even with a limited victory in its first round of negotiations with Europe, it's not clear where the money's going to come from. Or if it will even have what it needs to pay back its creditors. It hasn't helped that all this political uncertainty has killed what was a nascent recovery—which in this case, was a very relative term—and sent its economy back down again.
It's going to be a long, long time before Greece is back to where it was in 2008. But at some point it will, right?