Why is Coffee so Expensive in Greece?

Frappe (cold & hand-beaten) coffee. Greece’s contribution to Cafe Culture.

I was going to write about tax evasion, but a combative reader raised some valid points in a comment in the previous article of which one – that of productivity – deserves a post of its own. I’m glad that I can talk about this, because I can also answer a question many tourists keep going on about. Indeed, in the Rough Guides a colleague is so incensed with the price of coffee, he makes an issue about it in the next edition.

Coffee in Greece (as opposed to Greek coffee) costs around €4 per cup because, in short, it is not ‘espresso’. No, this is not a circular argument. You don’t drink coffee in Greece standing at a bar downing your cup in one and leaving. Nor do you sit quickly at a table and vacate your seat when you’ve finished, like you do in Starbucks. In Greek cafés you can order a coffee and then sit your day out, without ordering anything else. It’s what people do.

Alas poor Greek waiter – you do your hours, but, hey your productivity is low, cos’ you’re stuck with a client who is occupying a seat having ordered just a €4 coffee. How will you increase your productivity? By being rude and tell the client to sod off after an hour? Or follow the high-productivity model of Pret-a-Manger or McDonald’s that make your environment uncomfortable enough for you to want to leave after you’ve eaten? The point about a Greek seaside taverna or café is that the environment is so pleasant that you want to stay there all day – and they let you do exactly that.

I can certainly propose a measure in a country that depends on tourism and where the high season on the islands lasts only forty days, which would increase productivity at once. Shut all hotels and restaurants and only open them between July 15 and August 31. Productivity would skyrocket, because hey, that out-of-way fish taverna that opened in May with one client per day (but has thirty clients in August) has been lowering labour productivity big way!

Total GDP would, of course, tumble down since no tourist would come except for 40 days in the year, but, technically, I’d have increased productivity. Frankly, blind pursuit of productivity in the service sector leads to those long benches at Wagamama’s, to an increase in obesity with all the carbs we eat at Pret or McDonald’s and to the closing of neighbourhood pubs and sub-post offices.

So, productivity is a funny term. People usually associate it with entrenched practices in labour unions or bureaucracy and no one would disagree that Greece should liberalise its closed shops and cut down red tape. (Both measures are being currently carried out, albeit at a snail’s pace). But comparing productivity across countries is a dangerous oversimplification which doesn’t take local customs into account and leads to some startling results.

So let’s try it. There are some extremely convoluted theories of productivity leading to complex equations, but let’s stick to some back-of-the-envelope calculations. Take the GDP per capita for a country and divide it by the number of hours worked to achieve that. How much has each person contributed to the GDP per hour? (I have taken my data from the CIA Factbook and the OECD; the units are all expressed in USD.)

Germany

Greece

So far so good. Greek productivity is less than Germany’s as expected. Let’s look at South Korea.

South Korea

Huh? Shurely shome mishtake? Greece is more productive than South Korea? It can’t be!

But it is..

So South Koreans are rich, but they work bloody hard for it. Could it be that they are so embedded in their workplace that part of the “hours worked” is socialising or doing exercises with colleagues? I don’t know. But could low Greek productivity be also the result of a long summer season with only 40 days at full capacity – oh, and because of those brutes that drink their coffee and spend hours on their arses instead of politely leaving when finished?