[OT] Lazy Inefficient European Socialist Losers?

From: Scott Stephens (scottxs_at_comcast.net)
Date: 08/12/04 

Date: Thu, 12 Aug 2004 04:36:22 GMT

Thanks to Stu at misc.survivalism;

http://tinyurl.com/48zy9

> The grass is not greener Bruce Bartlett (archive)
>
> August 10, 2004 | Print | Send
>
> Europeans are frustrated. They have been behind the United States
> economically for years and thought this was due to lack of economic
> integration. So they created the European Union, with a common
> currency and virtually free mobility of goods, capital and labor
> throughout the continent. Yet Europe continues to lag.
>
> A new report from the Bureau of Labor Statistics shows the United
> States with real gross domestic product per person in 2003 of $34,960
> (in 1999 dollars). This is well above every European country. The
> most productive European country, Norway, has a per capita GDP of
> just $30,882 (converted using purchasing power parity exchange
> rates). The major countries of Europe are even further behind: United
> Kingdom ($26,039), France ($25,578), Italy ($24,894) and Germany
> ($24,813).
>
> In other words, Europeans produce no more per year than Americans did
> 20 years ago. And they are not catching up. According to the Bank for
> International Settlements in Switzerland, the productivity gap
> between the United States and Europe is actually widening. In the
> Euro area as a whole, workers were 86 percent as productive as
> American workers in 1995. In 2003, this fell to 84 percent.
>
> As a consequence, living standards are much lower in Europe than most
> Americans imagine. This fact is highlighted in a new study by the
> Swedish think tank Timbro. For example, it notes that the average
> poor family here has 25 percent more living space than the average
> European. Looking at all American households, we have about twice as
> much space: 1,875 square feet here versus 976.5 square feet in
> Europe. On average, Europeans only live about as well as those in the
> poorest American state, Mississippi.
>
> Where Europeans are better off, perhaps, is in terms of leisure --
> they have a lot of it. According to the Union Bank of Switzerland,
> the typical European has two to three times as many paid days off per
> year as Americans. And according to Eurostat, Europeans don't put in
> much of a workday, either. According to the report, the typical
> European only does a bit more than five hours of gainful work per
> day, with Norwegians at the low end at four hours, 56 minutes per
> day, and (surprisingly) the French at the high end at five hours, 44
> minutes per day.
>
> One reason for the short workday is that Europeans seem to get sick a
> lot more than Americans. According to a July 25 report in The New
> York Times, on an average day 25 percent of Norway's workers call in
> sick. A 2002 study in Sweden found that the average worker there took
> more than 30 sick days per year. Makes you wonder just how good their
> health care systems really are.
>
> As a consequence, aggregate hours worked are much lower in Europe
> than in the United States. According to a new report from the
> Organization for Economic Cooperation and Development in Paris, last
> year the average American worked 1,792 hours. By contrast, the
> average Frenchman worked just 1,453 hours and the average German
> worked only 1,446 hours. Twenty-five years ago, annual hours worked
> in Europe were much closer to those here.
>
> The OECD blames the unwillingness of Europeans to work as the
> principal reason for the lower output per worker and their lower
> standard of living compared with Americans. "Research has clearly
> established a remarkable fact: namely, that the sizable U.S.
> advantage in real GDP per capita ... is largely due to differences in
> total hours worked per capita," the report states. It urges European
> governments to reform their labor policies to increase work hours, a
> recommendation seconded in a recent report from the International
> Monetary Fund.
>
> Unfortunately, neither the OECD nor the IMF has any real explanation
> for why Europeans take so much leisure time. However, a new study by
> economist Edward Prescott of the Federal Reserve Bank of Minneapolis
> provides the answer. He says that Europe's higher taxes explain
> almost all the difference in labor force participation rates between
> Europe and here. He notes that when European tax levels were
> comparable to those here, work hours were similar. But as Europe's
> taxes have risen, workers responded by working less.
>
> Consequently, tax cuts in Europe would raise labor supplies, increase
> output and raise the standard of living. For example, if France
> reduced its tax burden from 60 percent of GDP to 40 percent, the
> average Frenchman would be able to consume 19 percent more over his
> lifetime than he does now. This is a very large impact.
>
> In short, Europeans don't work because it just doesn't pay to work
> after the government takes its cut. And because welfare benefits are
> so high, the cost of not working is low. Thus, when workers compare
> what they make after-tax with what they can make by doing nothing,
> the gap is very small. 

-- 
Scott
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