The Free Press, Mankato, MN

Talkers

October 17, 2012

Why working harder doesn't make you richer

(Continued)

WASHINGTON —

At the other end of the income scale, of course, many of those in poverty can't find a job to put in the hours at all. It's also true, however, that in many low-income families, parents are working two jobs just to stay above the poverty line. Poor people are poor because they don't get paid much per hour — not because they don't work hard enough.

A similar story applies across countries. The United States is more productive than the European Union — with annual output of around $42,500 per person, about 19 percent higher than Germany and 30 percent higher than France. But not much of that difference is due to working more hours.

Take an example from a benighted country in Southern Europe: OECD data suggest that, in 2011, the average Greek who was actually employed worked 2,032 hours that year. The average German worked 30 percent less than that. For all that hard work, however, Greek GDP per hour worked was only $34 — compared with $55 in Germany. When it comes to relative economic strength, more efficient German production (alongside higher overall employment) completely outweighs those long hours the Greeks put in at the office.

And it's not just Greece. The link between work hours and output is pretty weak in general. In 1974, Britain was gripped by the threat of a coal miners' strike that forced the government to impose a three-day workweek to ensure there was enough electricity to go around. Despite the dramatically reduced number of hours worked, industrial production in those two months fell only 6 percent.

In 2000, France cut its 39-hour workweek by four hours, but the country's GDP per capita climbed from $27,396 to $28,520 between 1999 and 2001. After President Nicolas Sarkozy effectively rescinded the 35-hour workweek in 2008, however, France's per capita GDP fell from $30,466 in 2007 to $29,169 in 2009. Clearly, the financial crisis was to blame for that decline, but the point is that working hours didn't do much, if anything, to move the needle in either direction.

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