Sunday, January 15, 2012

Work Hours in Europe and America

Since the end of World War II, the United States has devoted all our productivity growth to more consumption and none to shorter work time. We can look to Europe for a realistic alternative to this extreme policy.

In the graph, we can see that work hours have declined steadily in France and Germany since 1950 (as in other west European nations) but have hardly declined at all in the United States. Both France and Germany had much longer work hours than the United States in 1950, at a time when they had to work hard to rebuild after the devastation of World War II, but Germany's work hours declined from 2,387 hours annually in 1950 to 1,408 in 2010, and France's declined from 2,241 hours annually in 1950 to 1,552 in 2010. It is interesting that France is known for its short work hours because of its political battles over the 35 hour week, but Germany actually has shorter work hours than France, in part because it gives employees the choice of working part time.

Work Hours in the United States, Germany and France since 1950
source: Groningen University Total Economy Database

The average American work week was much shorter than Germany's and France's in 1950, but it declined only slightly since then, from 1,909 hours annually in 1950 to 1,695 in 2010, so we now have much longer hours than Germany or France.

Even the slight decline in American work hours shown on this chart is exaggerated, because these international statistics are based on surveys of how many hours of work the average job requires. The graph shows that American work hours dropped by a small but significant amount from 1965 to 1980, but this was when large numbers of women were entering the work force, and many of them wanted part-time jobs so they would have time for their families; the average job took fewer hours because more people had jobs. In addition, the graph shows that work hours dropped a bit after 2000, but this graph does not show that it became more common for Americans to work multiple jobs after 2000, in response to stagnant wages during this decade. Household surveys that look at the average number of hours worked per worker (rather than the hours per job in the graph) show that our work hours have actually risen by 204 hours per year since 1973.

It is interesting to contrast the United States and Germany, because the difference in hours worked accounts for almost all of the difference in per capita output between them. The average German worker works 83% as many hours as the average American worker, and Germany's per capita GDP is 81% of America's.

Our conventional fixation on economic growth implies that Germans are not as well off as Americans because their per capita GDP is only about four-fifths of ours, and that they would be better off if they worked as long hours as Americans and brought their income up to our level. But Germans can choose to work part-time, and those who have chosen shorter hours obviously believe that they personally are better off having the extra time rather than the extra hours. Germans also seem to enjoy the paid four-week vacations and the 9 to 13 days of public holidays per year that their laws guarantee, while 29% of American workers have no paid vacations, and those who do get paid vacations average just over one week per year.

According to other common measures of economic success, Germany does better than American.

  • They have lower unemployment than we do during the current hard economic times, in part because they have a policy called Kurzarbeit (short work), which uses unemployment insurance to provide government subsidies to employers who cut workers to part-time rather than laying workers off, sharing the available work through shorter hours.
  • They have a lower national debt and a much higher household savings rate than we do: It seems that our work-and-spend economy leaves us less able to save than they are, even though we earn more money than they do.
  • They have perennial trade surpluses (over $184 billion in 2010), while we have perennial trade deficits (over $470 billion in 2010), showing that choice of work hours does not make a country less competitive economically.
  • They have longer life expectancy, lower infant mortality, and higher educational achievement than we do.

Needless to say, the current American way of life is much more environmentally destructive than the current German way of life. The ecological footprint of the average American is 8 global hectares, while the ecological footprint of the average German is 5.08 global hectares. Their footprint will become smaller, as they plan to generate all of their electricity using renewable sources of energy by 2050. Though Germany is famous for its laws promoting clean energy and recycling, their shorter work hours and lower per capita GDP currently contribute about as much as their cleaner economy to their smaller ecological footprint.