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Hellenes Abroad / Greece

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Citing Eurostat data, Wall Street Journal on Monday published an entry, entitled “Busting North – South Stereotypes” indicating that Greeks in particular have the longest working week in Europe at an average of 42 hours, followed closely by the Spanish and Portuguese with 39-hour weeks.
The full WSJ article follows:

The euro-zone debt crisis has underlined one of Europe’s more enduring stereotypes, namely the division between the hard-working Northern countries versus the lazy South. And these stereotypes have to some degree filtered into the European Union’s policy debate over how to respond to the debt crisis.

But the reality is more complicated than this: recently bailed-out Ireland, for example, does not appear to be in southern Europe. Excluding that inconvenient fact, there are other problems with the hard-working-North-versus-lazy-South narrative.

For example, workers in which EU countries work the longest weeks? That would be the Greeks, who work on average 42 hours a week. Spain and Portugal aren’t far behind with a work week of around 39 hours. And where is the shortest work week in the EU? That would be in the Netherlands, under 31 hours a week.

Germans on average work just under 36 hours a week, significantly less than the hard-working Greeks they are now bailing out.

Your first reaction might be: Here is yet another statistic that has been fudged by the Greeks. But not so, says Eurostat, which has several explanations for the numbers.

First, part-time work is much more prevalent in the northern countries, particularly in the Netherlands and Germany. In Greece and the other southern countries, workers either have a full-time job or they are unemployed (increasingly the latter in the Age of Austerity).

Women are also much more likely to work in the northern countries, particularly the Scandinavian nations, and women tend to work fewer hours than men.

Second, a higher percentage of Greek workers tend to work in agriculture, where working hours are usually longer. The same is true for the other southern euro-zone countries that have run into trouble.

What these numbers show is that the southern euro zone’s problems aren’t a result of workers there not working hard enough. The problem instead is lower productivity in the southern rim: In 2009, Greek workers generated just €18.50 per hour worked; for Spain and Portugal, the number is €24.40 and €13.80, respectively.

Dutch workers generated €39.50 and German workers €38.70. Yes, the gap is huge.

But what’s behind it? Is the right move to cut pensions and welfare benefits in the southern euro-zone countries, as the European Commission, the International Monetary Fund and the European Central Bank are urging? This will likely get the southern Europeans to work even more, but it won’t get them to work more productively.

Part of the reason for the divide is that northern workers benefit from better technology and better infrastructure. A Greek worker trained as well as a German worker is still going to be less productive than a German worker because of superior German technology and infrastructure. But how do you narrow the gap in infrastructure and technology?

An interesting example on this front is Ireland. Irish workers are among the EU’s most productive, generating €38.90/hour in 2009.

The reason is Ireland’s low corporate tax rate has encouraged multinational firms, chock full of technological know-how, to set up in Ireland. This has boosted the productivity of Irish workers — but unfortunately much of the benefit from this higher productivity isn’t captured by the government through tax revenue; instead it flows out of the country in the form of profits, mainly to U.S. multinational corporations.

But the lesson for the other euro-zone countries is clear. Their workers should either move to where the technology is (German, the Netherlands… Finland!). After all, that’s the story of the United States since the middle of the 19th century, when millions of workers from agrarian southern Italy, Ireland and Eastern Europe arrived to work in the booming U.S. industrial machine. Or these governments should get multinational firms to bring their technology to the southern euro zone.

What will be very difficult is getting the southern euro-zone economies to boost their productivity without significant outside help.

Sources: ANA, Wall Street Journal

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Hellenes Abroad / Greece

Voices & visions Melbourne, 09.02.2012