Re: Why Europe can't hold out - Brooks, NY Times

royls_at_telus.net
Date: 01/14/05 

Date: Fri, 14 Jan 2005 20:28:31 GMT

On 13 Jan 2005 18:09:07 -0800, "Gistak" <gistak@hotmail.com> wrote:

>royls@telus.net wrote:
>> On 10 Jan 2005 14:05:55 -0800, "Gistak" <gistak@hotmail.com> wrote:
>>
>> >royls@telus.net wrote:
>> >> On 6 Jan 2005 13:12:47 -0800, "Gistak" <gistak@hotmail.com> wrote:
>> >>
>> >> >royls@telus.net wrote:
>> >> >> On 6 Jan 2005 08:59:41 -0800, "Gistak" <gistak@hotmail.com>
>wrote:
>> >> >>
>> >> >> >David James Polewka wrote:
>> >> >> >
>> >> >> >> Already, high European taxes make the European model look
>> >> >obsolete.
>> >> >> >
>> >> >> >This doesn't make sense. How do high taxes make it look
>obsolete?
>> >> >>
>> >> >> The types of taxes they use, especially VAT and income tax,
>bear
>> >on
>> >> >> production, reducing wealth creation and prosperity.
>> >> >
>> >> >Even if what you said was incontrovertable, how does that
>translate
>> >to
>> >> >being obsolete?
>> >>
>> >> An older model that does not work as well as a newer one is
>> >considered
>> >> obsolete. If the European model is going to be a permanent
>> >low-growth
>> >> model, that is a long-term problem for Europeans. I doubt that
>they
>> >> want to be the Africans of the 22nd C.
>> >
>> >But maybe other parts things help or hurt in other ways. They're
>> >certainly not the Africa if THIS century, so I don't think their
>model
>> >is obsolete quite yet.
>>
>> Sometimes by the time something is known not to work, it's too late
>to
>> do anything about it.
>
>If it's not known not to work, then it's not obsolete.

?? No, it could very well be obsolete. Standard 19th C medical
practice became obsolete the day Ignaz Semmelweiss said doctors should
wash their hands between patients. But it was not known for many
years why the standard practice was harmful.

>> >> >> >> European and U.S. workers are about equally productive per
>hour
>> >> >> >worked.
>> >> >> >> But Americans work 50 percent more than Germans, French and
>> >> >Italians.
>> >> >> >In
>> >> >> >> the 1970s, Western Europeans actually worked more than
>> >Americans.
>> >> >But
>> >> >> >as
>> >> >> >> taxes rose and incentives to work diminished, Europeans cut
>> >back
>> >> >> >their
>> >> >> >> hours or dropped out of the labor force.
>> >> >> >
>> >> >> >You may as well say that as the earth got older, Europeans cut
>> >back
>> >> >> >their hours or dropped out of the labor force. Both are true
>> >> >> >statements, but neither backs up a claim of cause and
>> >consequence.
>> >> >>
>> >> >> In economics, there is a recognition that motivation to do
>> >something
>> >> >> one would not do of one's own accord depends on the reward for
>> >doing
>> >> >> it.
>> >> >
>> >> >It depends on several things, sure. This isn't just economics,
>but
>> >> >psychology. The point is that taxes being raised doesn't lead to
>> >longer
>> >> >vacations.
>> >>
>> >> ?? It could easily do so. If working is not going to get you
>> >> significantly more money, you go on vacation.
>> >
>> >PAID vacation. They get much more paid vacation than people in the
>US
>> >do. I'm sorry, but I thought that was well understood.
>>
>> ??? Uh, sorry, but I thought _you_ understood: "paid vacation" just
>> means that the employer accepts less work for the same amount of
>> money. It just takes a little bit off each paycheck during the time
>> the employee is working and pays it when they are not working. If
>> Europeans got less paid vacation, they'd get more pay, and Americans
>> vice versa.
>
>You said that if working isn't going to get you more money, then you go
>on vacation. You brought it down to a personal question, and I
>responded.

OK, let me clarify, as you do not seem to be a native English speaker:
the second-person pronoun "you" is often used in place of the
third-person impersonal pronoun "one," because the latter is
considered to sound ponderous and pedantic.

>Paid vacation is given and people take it.

_Why_ is it "given," rather than more money?

>They're not
>deciding whether to take it or not based on whether they have to pay
>high taxes.

How do you know employers are not deciding to offer it because of high
taxes? Consider the common experience with taxed and untaxed
benefits: employers spend much more on untaxed benefits, because more
of the benefit actually gets to the employee and functions as an
incentive.

>Just like you and I do, they decide to take it because it's
>offered to them.

They "decide" to take it because the employer cannot, repeat _cannot_
offer untaxed money instead.

>> >If I had more
>> >paid vacation, I'd take it, whether taxes were high or low.
>>
>> If you had more paid vacation, you'd get less pay, and vice versa.
>If
>> that additional pay is going to be taxed so highly that you don't get
>> to keep much of it, you will be more likely to choose longer
>vacations
>> over more pay.
>
>You mean among different companies? Because I'm talking about every
>company in France, for instance. They ALL offer more vacation than most
>US companies. Maybe the occasional French worker can decide to take a
>job in the US for more pay and less vacation, but most don't make
>choices like that.
>
>And shorter work weeks are ALSO mandated by law. This isn't a worker or
>employer choice.

What is mandated by law is not part of the discussion here, because
there is no choice involved.

>> >Why couldn't it be
>> >more vacation vs. LESS vacation?
>>
>> Uh, why do you think employers are willing to pay people at all? So
>> they will sit around on a beach somewhere?
>
>Vacation IS pay.

In a sense, I suppose. But the point is, it is _not_taxed_ like money
pay.

>Sitting around a beach IS being paid.

Well, being paid while you do it is. I have certainly done it from
time to time without being paid.

>And yes, they
>pay them in beach time for the same reason they pay them in cash. So
>that they can keep employees working.

Right. But you still have not addressed the question of _why_
employers give vacation time instead of cash. If it's just a legal
mandate, there's nothing to discuss re their motives.

>> >Anyway, it's not necessarily the companies, but legal requirements.
>You
>> >may not know how the system really works in Europe.
>>
>> No system is going to make employers willing to pay for no work.
>
>It's my understanding that in parts of Europe there are mandatory
>requirements for vacation time. I don't know exactly what you mean by
>your sentence above.

If there is a legal requirement, the employers are not "deciding to
offer" more vacation time. They are _compelled_to_give_it_. That
gets into a completely different branch of economics.

-- Roy L

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