Why Europeans Work Less Than Americans
Steven Landsburg in Forbes Magazine misinterprets what a union is (or could be) -- seeing it as a source of coercive rules rather than as a mechanism for coordinating actions, but does have some interesting things to say about how many hours people work in different countries, and why there is a pressure to work a similar amount to everyone else.
Compared to Europeans, Americans are more likely to be employed and more likely to work longer hours--employed Americans put in about three hours more per week than employed Frenchmen. Most importantly, Americans take fewer (and shorter) vacations. The average American takes off less than six weeks a year; the average Frenchman almost twelve. The world champion vacationers are the Swedes, at 16 and a half weeks per year.
This raises more than one interesting question. First, why do Americans choose to work so much? (Or, if you prefer, why do Europeans choose to work so little?) Second, who's happier?
... One trio of economists (Ed Glaeser of Harvard, Bruce Sacerdote of Dartmouth and Jose Scheinkman of Princeton) offers this explanation: When your wages are cut 20%, you take more vacations. But when your friends' wages are also cut 20%, you'll take even more vacations, because vacations are more fun when you've got friends to share them with. So a 20% across-the-board tax hike, which affects both you and your friends, yields a more dramatic response than a 20% cut in your own wages.
An overlapping trio (Glaeser, Sacerdote, and Harvard's Albert Alesina) give some credence to this "social multiplier" theory...but claim to have identified the primary culprit in European labor regulations. While 20% of American workers are unionized, more than 80% of workers are unionized in France and Sweden. And while American unions have spent the past few decades fighting for higher wages, European unions have fought for shorter hours.
Is that a good thing or a bad thing? According to traditional economic theory, workers are best off when they can decide for themselves how much to work. Some workers might choose long hours and big paychecks; others might choose less income and long vacations.
Union-inspired regulations, by restricting individual choice, can only make those workers worse off. But here's what traditional theory overlooks: If you live in Europe, then union regulations not only force you to work less; they also force your friends to work less--which can be a blessing if you're trying to coordinate a camping trip.
So at least in principle, coercive union rules could be good for everyone. So, for that matter, could high marginal tax rates, and for exactly the same reason: The more your friends are taxed, the easier it is to coax them into taking time off to share your vacation time.
...If European and American paths continue to diverge, we'll soon learn a lot more about whether well-rested Frenchmen are happier than wealthy Americans.
Steven Landsburg is an economics professor at the University of Rochester and the author of The Armchair Economist and Fair Play.
I think it's pretty funny to assume that working towards higher wages is free enterprise while working towards shorter hours is coersive. Anyone who wants to work more hours can always do so... they can even have more than one job.
The whole issue of the effect of taxes on the economy needs a rethink. We're always hearing the mantra that lower taxes means a more healthy economy. The act of lowering taxes can provide a short-term boost, but North America had a great long period of prosperity when taxes were higher than they are now. I don't trust this assertion (of his and elsewhere) that people tend to work less as taxes rise. You could equally argue that they have to work more as taxes rise.
He starts by talking about holidays, and then morphs to just "leave", which by the high numbers must include maternity leave, bereavement leave, sick leave, unpaid leave, and things like that. In general, North Americans get 3 weeks holiday while Europeans get 6 weeks. The French get 12 statutory holidays on top of that; Canadians get 9 (more for civil servants).
Posted by: Yappa | May 29, 2006 at 05:02 PM