Because most philosophies that frown on reproduction don't survive.

Wednesday, December 21, 2011

Do Greeks Work Harder Than Germans?

Matt Yglasias has a piece in Slate attempting to counter the "if the Euro is going to work, Greeks are going to have to learn to work hard like Germans" line of thinking.
It’s true that Germans and Greeks work very different amounts, but not in the way you expect. According to the Organization for Economic Co-operation and Development, the average German worker put in 1,429 hours on the job in 2008. The average Greek worker put in 2,120 hours. In Spain, the average worker puts in 1,647 hours. In Italy, 1,802. The Dutch, by contrast, outdo even their Teutonic brethren in laziness, working a staggeringly low 1,389 hours per year.

If you recheck your anecdata after looking up the numbers, you’ll recall that on that last trip to Florence or Barcelona you were struck by the huge number of German (or maybe they were Dutch or Danish) tourists around everywhere.

The truth is that countries aren’t rich because their people work hard. When people are poor, that’s when they work hard. Platitudes aside, it takes considerably more “effort” to be a rice farmer or to move sofas for a living than to be a New York Times columnist. It’s true that all else being equal a person can often raise his income by raising his work rate, but it’s completely backward to suggest that extraordinary feats of effort are the way individuals or countries get to the top of the ladder. On the national level the reverse happens—the richer Germans get, the less they work.

Closer to the mark is the observation that Germans (like the Dutch and the Austrians) are thrifty, net savers who consume less than they produce and therefore export more than they import.

Even if there is some sense in which Germany’s trade surplus and attendant thrift is admirable, it simply isn’t possible for all countries to emulate Germany and export more than they import. Your exports are my imports. Your saving is my borrowing. Your assets are my debts. Living within one’s means certainly sounds like a good idea, but it’s not really advice that everyone can take. If every European country strives to reduce government and private borrowing simultaneously, a severe recession and steep decline in output is the only possible outcome.
The statistics Yglasias is referencing are from the OECD and can be found here. (Just select the country you want to view and scroll down about two thirds of the way.)

I think that, first off, he's probably engaging in a bit of statistical malpractice. The data being cited here is based on a household survey of all workers, both part time and full time, so this doesn't just tell you about how many hours the average full time worker works in a week, and how much vacation they take, but also how many people are working full time versus how many are working part time. By that point, I have to think it's a somewhat un-useful measure. And the survey produces some very odd results. For instance, this shows the only two countries in which people on average work more hours than Greece as being Chile and South Korea. While notoriously slacking Japan logs only 1772 hours per year and the US only 1792. Something here just doesn't smell right to me, given what I've read about standard full time work weeks and vacation hours in these various countries.

But leaving that aside, it strikes me that there are a couple of interesting lessons which can be drawn out of here -- though none of them are Yglasias' apparent conviction that Greece is somehow more economically deserving and Germany is exerting some sort of unfair advantage over them.

Being Poor Often Does Mean Working Harder
While the common place that working hard is a good way to improve your lot, this certainly doesn't mean that people who make less don't work hard. Many comparatively low paid jobs are absolutely back breaking. Here I am, after all, composing this post off and on during free scraps of time during my workday, while sitting comfortably at a desk with my cup of coffee and my MP3 player within reach. You can bet that someone who picks fruit all day or cleans toilets or frames houses is a lot more tired at the end of the work day than I am. Many of the world's poorest people in this day and age live by small plot subsistence farming, using tools that haven't changed much in hundreds of years. Unquestionably, that is a very hard life. So if those people are poor, it's certainly not because they aren't working hard.

Value Is Created By What You Get Done, Not How Long You Do It
Let's think about that farming example for a minute. Take a look at these two pictures:

The farmer in the first picture is doubtless working much harder. However, the farmers in the second picture are making a lot more money. Why? Because the technology and work methods they are using mean that at the end of a day's work, they will have far more grain to show for their work. Their productivity is higher. So assuming that grain is itself something which people value about the same no matter who they buy it from, the modern farmers are going to make far more money than the traditional farmers, even while doing less work.

Typically, the amount that someone is paid for doing some sort of work is measured by how much other people value the product of that work. This relates not only to questions of productivity, but of the relative value of the things being produced. If someone works ten hours a day selling tourist postcards for 0,20€ each, that person is likely to make less money than someone who spends seven hours a day assembling Volkswagens that will be sold for $30,000 each, even if the former is putting in more hours. It's not just a matter of how much effort someone puts in, but of how much other people are willing to pay for the product of that labor. The amount that people are willing to pay for the product of an hour's auto assembling is more than the amount they're willing to pay for an hour's postcard selling. It's not just a matter of how hard or skilled the work is, but also how much people need a car (and how much they value a good one over a bad one) compared to how much they need postcards.

There are a host of reasons why Germany is a wealthier country than Greece, but at root, one of the most basic is that Germany produces a total output of goods and services per capita which people value significantly above the per capita output of goods and services which Greece produces. "Germans work harder than Greeks" may not be the clearest way to express that, but it does come rather closer to the truth than implying that it is rather the result of Germans just happening to save a bit more and to have got to the export table first and gobbled up all the export surplus before Greece arrived on the scene.


Jenny said...

I read that piece and wondered how he wrote the thing without even mentioning productivity.

Rebekka said...

How can the Danish hours actually worked be 1731 and the US is 1792 when the Danish work week is 37 hours and Danes have 6 weeks of vacation a year??? That doesn't make any sense.

bearing said...

Rebekka -- maybe when you figure in a different population of part-time or "underemployed" workers and people who work more than one job?

Just guessing.

Darwin said...


Like Bearing, I think the issue here is that this is a survey of the number of hours worked by household, divided by the number of workers per household, without adjusting for the mix of part time and full time workers.

Doing a little math, it looks like if we take a US standard full time situation to be: 40hrs per week, 2 weeks of vacation and 5 national holidays per year, you'd get a full time load of 1960 hours per year.

If I substitute 6 weeks of vacation and 36hrs/wk I get 1665 hours per year.

The fact that the quoted Greek rate would suggest people working more than 40 hours per week with no vacation days and no holidays does kind of have me wondering. Of course, one of the problems that Greece has had economically is that they have a huge amount of non-compliance with everything from financial regulations to paying taxes. It could be that their survey data isn't very good either.

Jenny said...

Now I have never been to Europe so this is just hearsay, but aren't the Mediterranean areas notorious for people going to work but not actually working. I am referring to the stories about the waiters who won't wait tables because they are drinking coffee and smoking and can't be bothered with the customers. You could work 12 hour shifts, 6 days a week that way. :) But all that might be wrong...

Mariana said...

I agree with your general arguments, but as an aside, farming is not the greatest example in the modern world. Farmers in the industrial mode may produce a lot more grain per farmer, but they are completely dependent on expensive machinery and chemical inputs - they MUST produce huge amounts in order to keep up with costs. The party that ends up wealthy in this scheme is the agribusiness corporation, not the farmer.

Paul Rain said...

It is an interesting study, for the questionable data if nothing else. Not really surprising that MY is basically parroting the labor theory of value.