If Europeans worked a longer week, unemployment would be higher still. WSJ is bound to attack the Europeans life style since it doesn't fit very well with serfdom.
Bill Ward On Fri, 9 Aug 2002 05:59:13 -0700 "Tom Walker" <[EMAIL PROTECTED]> writes: > WSJ, Aug. 8, 2002 > > Europe's Prized Leisure Life > Becomes Economic Obstacle > > By CHRISTOPHER RHOADS > Staff Reporter of THE WALL STREET JOURNAL > > ESSLINGEN, Germany -- Uwe Lang can't say he feels burned out as he > embarks > on the first of two three-week vacations he's planned this year. > > The 34-year-old supervisor at Eberspaecher AG, which makes > car-heating > systems, knocks off work each day at 3 p.m. in the course of a > 35-hour work > week. He worked just 12 days total in May, which had four national > holidays. Now he's planning to visit a cousin in Berlin, then head > on to > see some friends in Hamburg. He's pondering a diving trip in Egypt > for > later in the year, but hasn't firmed up his plans. "I like to keep > it > open," he says. > > Europeans are well known for a more balanced lifestyle than > workaholic > Americans. But these days, Europe has never worked so little. While > the > Continent worked as much as the rest of the developed world 20 years > ago, > it has steadily cut back on work weeks while lengthening vacations, > a trend > that has gathered steam in recent years. > > Without realizing it, Europe has embarked on an unusual experiment > in an > era of globalization: trying to become more competitive while > working less. > > So far the economic results are not promising. Two years ago at a > summit in > Lisbon, European Union government leaders set the goal of becoming > the most > competitive economy in the world by the end of this decade. But with > unemployment rising and nearly no growth in consumption, Europe's > fortunes > appear tied to a U.S. turnaround more than ever. > > Europe is on track to grow by about 1% in the first half of the year > -- > well below the U.S.'s 3% rate -- with nearly all the growth coming > from > exports. U.S. growth per capita, a common measure of standard of > living, > grew at twice the rate of Europe's largest economies in the 1990s. > > Nevertheless, France this year extended its three-year-old law > reducing the > work week to 35 hours from 39. The far-reaching measure now includes > companies with fewer than 20 employees. Parents in Sweden just got > another > 30 days of parental leave, at 80% of their salary. That brings the > total to > 480 working days per couple for each child -- almost a threefold > increase > since the 1970s. > > Vacations have nearly doubled over that same period in several > European > countries, including Italy, Spain and the Netherlands. About six > weeks is > now the annual norm across Europe. On top of all their days off, > Germans > typically are now out sick for 10 days each year, unheard of two > decades > ago. > > The divergence between the U.S. and European economies goes beyond > the > matter of working time. The U.S. enjoys a deeper pool of investment > capital, mobile workers, a developed entrepreneurial culture and > faster > adaptation of new technologies, among other advantages. But, says > Michael > Burda, a professor of labor economics at the Humboldt University in > Berlin, > "you have to work to grow." > > Cutting Back > > Europe, though, continues to cut back. Today, the average German > worker > puts in about 1,400 hours a year, a 17% decrease from 1980, > according to > the Organization for Economic Cooperation and Development. Workers > in Italy > and France -- who with Germany make up 70% of the economy of the 12 > countries that share the euro currency -- also are working far fewer > hours > than they did then. Americans, meanwhile, are working about the same > average hours they did in 1980, about 1,800 a year. During Japan's > decade-long economic slump, employees' historically high working > hours also > have dropped but are still roughly even with those of Americans. > > In Europe, "we have fewer job opportunities distributed across > people who > work less," says Andrea Ichino, a professor of economics at the > European > University Institute in Florence, Italy. > > Many Europeans view a healthy dose of leisure as part of what > separates > them from Americans. But it wasn't always so. > > When Europe rebuilt after World War II, economic growth surged > across the > Continent, averaging close to 5% in the 1950s and 1960s, twice that > of the > U.S. at the time. Unemployment was half the U.S. level. Germans and > Italians averaged 2,100 working hours a year, compared with about > 1,900 for > Americans at the time, according to the OECD. Europe began to catch > up to > the U.S. and the performance of the globe's major economies appeared > to be > converging. > > But then came the oil shocks of the 1970s, when skyrocketing energy > prices > brought on inflation and recession. The different responses of the > U.S. and > Europe go a long way in explaining their economic performances of > the > succeeding decades. While U.S. companies slashed workers and > restructured, > Europe tried to cushion the blow by boosting government spending, > expanding > unemployment benefits and enacting stricter laws against firing. > > The measures helped to preserve calm in the face of the biggest > economic > shock since the war, but they made the Continent less adaptable to > future > changes. In the three decades since, the U.S. created 50 million new > jobs, > five times the number generated in Europe, according to figures > compiled by > Lehman Brothers. While unemployment in the U.S. steadily fell in the > U.S. > after the difficult 1970s, it remained stuck at about 10% or more in > Europe. > > Enter the shorter working week. Unions argued that reduced hours > would spur > job growth by spreading the same amount of work among more people. > Most > economists dismissed the theory, but some argued it could force > Europeans > to become more efficient, squeezing more work into less time. > > Neither turned out to be true. Unemployment stayed high and > productivity -- > the measure of the amount of output achieved by one worker in an > hour -- > still lags behind the U.S. and fell further behind in the last few > years, > according to the OECD. > > While U.S. manufacturers stuck with the 40-hour week in place since > the > war, most European countries went to 35 hours during the next two > decades. > Unions and governments asserted that the measures created or saved > jobs. > The French government claims its 35-hour law has led to more than > 200,000 > jobs since 1999. The new hires, though, come partly from subsidies > the > French government paid companies to hire new workers while the new > law was > phased in. > > Caterpillar Inc., the U.S. maker of heavy machinery, added 70 new > workers > at its plant in Grenoble to cope with the change, bringing its total > work > force in France to 2,300. Like many others, the company chose an > option in > the law to let workers take more vacation days in lieu of reducing > their > weekly 39 hours to 35. But it quickly found that projects were > delayed > because too many people were out of the office on a given day. > > "If our only competition and customers were in France it would not > be an > issue," says Laurant Rannaz, head of human resources for Caterpillar > in > France. "But they come from around the world." > > For some smaller companies that can't afford to hire new workers to > make up > for the reduction in hours, the results have been disastrous. In the > wine > cellar of her 17th-century farmhouse in Aloxe-Corton, near Dijon, > Veronique > Perrin frets that she may have to sell the vineyard where her > great-grandmother grew up. Her three workers no longer come in on > Fridays > as a result of the law change. > > hat's more, the company that provides the labels for the 50,000 > bottles of > wine she makes each year can no longer keep up with her demand > because it > has lost worker hours. "This is not the life I had in mind," she > says. > > For the bigger companies, globalization affords an escape hatch from > the > restrictions at home. Even though Europe boasts high-skilled, > well-trained > and educated workers, companies say the shorter work hours make the > higher > costs even harder to justify. French car maker PSA Peugeot Citroen, > for > example, more than doubled the size of its work force outside France > to > 68,800 in the last decade, while its domestic work force shrunk by > 4,000. > In Germany, Volkswagen AG expanded its foreign work force by > two-thirds > while keeping its domestic work force at 20-year-old levels. The > company > now makes its trademark Golf in Slovakia, Brazil and South Africa, > as well > as in Germany, and all of its new Beetles in Mexico. > > Companies won't hire at home, even if demand is strong and existing > workers > are stretched. Moog GmbH, the Boeblingen, Germany, subsidiary of the > U.S. > maker of hydroelectric valves used in airplane wings and other > devices, at > the moment needs 27 more high-skilled engineers. But Hubert Ammer, > the head > of human resources, has no plans to hire -- at least not in Germany. > The > company is in the midst of moving various divisions to India and the > Philippines, where employees are cheaper and work longer. > > "Hiring is the last thing you do" in Germany, says Mr. Ammer. "Only > when > there is no other way to get the work done." He says this constrains > the > company's growth because it takes time to find skilled workers > abroad, but > he has no choice. An engineer who works only 35 hours isn't worth it > for > the company, he explains. > > He recently grew fed up with a worker who was taking 50 to 60 days > of sick > leave a year, in addition to all his vacation time. When the company > moved > to fire him, the employee got elected to the company's workers > council, > which represents employee interests to management. The position > protects > him from being fired. "If someone wants to do this, they can do it," > he > says. "And it's too expensive for us to do anything about it." The > case is > now in court. > > Stories such as these help explain why Europe hasn't become as > attractive a > home for foreign investment as the U.S. From 1991 to 1998, the > amount of > revenue of foreign manufacturers in the U.S. more than doubled to > $883 > billion, accounting for 42% of all revenue of foreign subsidiaries > in the > 30 industrialized countries that constitute the OECD's membership. > The > equivalent numbers shrank, both by volume and in percentage terms, > in the > three largest European countries in that time. > > 'Parking Lot' > > The lack of job growth is particularly acute in Italy, which has the > lowest > percentage of working-age people holding a job of any country in > Europe. > With few job prospects, many young Italians just keep studying: The > average > age of graduation is 28. Universities have become a "parking lot" > for young > Italians unable to crack into the job market, says Ettore Recchi, a > sociology professor at the University of Florence. > > Working less has become culturally ingrained since the 1970s, he > says. > Priorities and values have shifted. Family, having a boyfriend or > girlfriend and leisure have all grown in importance among Italians > aged 15 > to 24 during the last 20 years, according to a recent survey by > Iard, an > Italian research firm. The importance of holding a job has declined > steadily, the survey shows. > > Many Europeans don't have their first work experience until their > late 20s. > Similar surveys show that holding a job remains the top priority for > Americans, who typically start work in regular, if part-time, jobs > as > teenagers. > > "I want to work, but I also want to have fun," says Francesco > Montanari, a > 27-year-old economics student, sipping a cappuccino in a cafe on a > steamy, > crowded Bologna street. He wears a white sweater tied around his > shoulders > and black Gucci sunglasses pushed up in his hair. Mr. Montanari has > dabbled > at a few jobs, such as a disc jockey in a dance club, but he figures > he'll > continue to study until his father cuts his credit card. He still > lives > with his parents at home. "My father's generation came out of a war > and > they had to work, but we have a different situation now," he says. > > About 52% of Italians between the ages of 20 and 34 live at home > with > parents, an arrangement that provides not only warm meals and free > laundry > service but the option not to work. That's a steady rise since the > late > 1980s. While some Italians tout the trend as a sign of the strength > of > family values, Mr. Recchi, the sociology professor, calls the > growing > dependence on family a "cultural dope." > > The differing work habits on the two continents stem in part from a > choice > on how to use the gains from prosperity. Europeans opted for more > free > time; Americans for more money and consumption, surveys show. From > the > perspective of many Europeans, it's the hard-working Americans who > have it > wrong, at a heavy price to society. "Usually, when people get > richer, they > work less," says Juan Dolado, professor of economics at University > Carlos > III in Madrid. > > Spending so much time working, Mr. Dolado argues, means less time > with > family, less social cohesion and arguably more fertile ground for > crime, a > much bigger problem in America than in Europe. Plus, while more > Americans > have jobs, many of these pay less than what jobless Europeans get on > welfare. The large role of the black market in many service sectors > such as > home repair in Europe -- an off-the-books market far bigger than in > the > U.S. -- provides a comfortable income for some, though it doesn't > show up > in federal tax coffers or official statistics. > > Governments and unions are awakening to the need for change. Italy > is > cutting study time nearly in half. The new French government is > expected to > allow more overtime. And federal campaign season in Germany has > prompted > debate on loosening Germany's rigid labor market. > > Most governments have promoted part-time and other flexible work > schemes, a > trend that has grown in recent years. The reason for the new > attention is > clear enough: Disaffected, jobless young people were pivotal in the > recent > removal of the left-center French government. Rising unemployment > may do > the same in Germany's federal elections in September. Concerned, the > German > government is considering scaling back jobless benefits to push the > unemployed into the work force. > > Reforms are tough to implement and the trend is unlikely to be > reversed > anytime soon. Industry groups in Italy, for example, want to remove > a law > passed in the 1970s that makes it hard for large companies to fire. > But > recent government proposals to water down the restriction prompted > the > largest one-day strike in decades in April. > > The resistance stems in part from Europeans growing accustomed to > their > newfound leisure. The French hours-reduction law gave Thierry > Gaymard, a > manager of nine Toys "R" Us stores north of Paris, 9½ weeks of > vacation, > more than twice as much as he got before the law was introduced. > Instead of > cutting his work week, he's taking longer vacations. > > Mr. Gaymard has used the extra time to lower his golf handicap and > attend > more school activities of his two young daughters. And he's begun > building > a new house, about a third bigger than his family's current home. > For his > American wife, accustomed to two- to three-week U.S. vacations, it > was a > "pretty big shock," he says. Now: "She loves it." > > > Tom Walker > 604 254 0470 > > Tom Walker > 604 254 0470 > > ________________________________________________________________ GET INTERNET ACCESS FROM JUNO! Juno offers FREE or PREMIUM Internet access for less! Join Juno today! For your FREE software, visit: http://dl.www.juno.com/get/web/.
