One common reaction to the European debt crisis has been to blame the victim: If only those Greeks/Italians would work harder, like us Americans/Germans, then they wouldn’t be in this pickle, the thinking goes.
Except it’s not, how do you say, true: Greeks and Italians actually work more than Americans and Germans.
The evidence was provided this morning by Marc Chandler at Brown Brothers Harriman, who emailed this chart from the OECD, showing that Greeks and Italians work more than anybody else in the OECD, including Americans and Germans.
In fact, workers in Greece are working more hours now than they were in 1998, which can’t be said of any other major nationality in the OECD.
The problem is not the industriousness of the people, but the relative productivity of the economy, which derives from some structural issues that the people can’t help and some that maybe they can (unit labor costs, including those benefits that get people in Germany and the US all worked up).
On that front, Greece arguably could use some benefit reform, but that same logic argues that the US could use some benefit reform, too — reform we also resist. And the nation-ism that assumes Greeks and Italians simply don’t work hard enough helps sell the world on the austerity being forced down their throats, which threatens to only make their debt problems worse, by stunting growth.
Chandler adds more detail and perspective:
The most recent data from the OECD covers 2008 and shows that in that year, Greek workers on average worked 48% more than their industrious German neighbors. The OECD data shows the average Greek worker spent 2120 hours at work compared with 1429 hours in Germany. Moreover, Greece is one of the only OECD countries in which workers were working longer in 2008 than in 1998. With 1802 hours at work, the average Italian employee spent more than 25% more time at work than the average German worker.
While many will be initially surprised by the data, on reflection it makes intuitive sense. In crude terms, wealthier countries typically work smarter — more capital intensively — than poor countries, not longer. Contrary to conventional wisdom, the lack of Greek competitiveness, for example, does not seem to lie in hours working but with the combination of productivity and wages/benefits (unit labor costs).
A more rigorous analysis would also include an analysis of the structure of the economy. In Greece, for example, the agriculture sector accounts for 4% of the value of added of the entire economy, which is among the highest in the OECD. In contrast, in most euro zone countries, the agricultural sector accounts for 2-3% of the value-added, and in Germany only 1%. In contrast, the 73% of the value-added in the Greek economy is derived from services, which is at the upper end of the euro zone community. The German service sector accounts for 69% of the value-added in the economy.