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.

15 Responses to Do Greeks Work Harder Than Germans?

  • Culture is very important when it comes to productivity. Some cultures simply produce far more disciplined and efficient workers than other cultures. It is not politically correct these days to say it, but like many un pc facts of our human condition it is obvious to anyone who has even a cursory knowledge of the world.

  • c matt says:

    I wouldn’t say “Germans work harder than Greeks” is anywhere near the mark (little financial pun there). I would say Germans work smarter than Greeks is probably closer.

  • T. Shaw says:

    That is not an explanation for continued German solvency.

    One explanation is that the Greek public sector/government expenditures grew at a far faster rate than the private, producing economy grew; and the ratio of Greeks mooching off the government to producers is higher than in Germany.

    In conclusion, when you read this arrogant teenager’s gossip, you are wasting eyesight and the most precious asset you have: time.

  • Art Deco says:

    Three questions to qualify the datum on mean hours per worker:

    1. What share of the population in Germany and what share in Greece were gainfully employed during the course of the most recent completed business cycle in each country?

    2. What was the ratio of personal consumption to personal income in Germany and in Greece over the most recent completed business cycle in each country?

    3. What was the ratio of public sector borrowing to domestic product in each over the course of the most recent completed business cycle?

  • I would refer all those interested to Thomas Sowell’s amazing book; “Black Rednecks & White Liberals.” He used data from the imigrant experience to paint an amazing picture of why some cultures immediately began to thrive in American while others took longer. Some of the information was very helpful to my book, especially as it pertains to faith and salvation and their particular views on what God expects of them. Some more fundamentalist groups believed that work, education and upward mobility were not nearly as important as proclaming yourself “saved,” (so much for the Parable of the Talents!)

    In addition some Eastern European had far less experience with commerce and Capitalism as compared to their Western European neighbors. Recently, this divide was readily apparent in the Balkan Wars of the 1990s; Slovenia had little use for Serbia and vice versa, both had very different ideas on government and indiviudal’s role in society.

  • It’s called easy access to cheap energy, and for the Germans with their phase-out of nuclear energy, that may well end.

    Look at the two faming photos you gave, Darwin: one a subsistence farmer using a sickle to get his grain, and the other using massive machinery fueled by easy access to petroleum. It’s energy, its access and its utilization that makes ALL the difference. Indeed, why does France do so relatively well in spite of socialism? a 70% nuclear generating capacity that keeps electric rates low and allows exports to non-nuclear countries like Italy.

    Low cost, easy access energy – whoever has the most will prosper.

  • j. christian says:

    Right, Darwin. I suspect Matt Yglesias is being disingenuous here, because I’m sure he understands vMPL = w (value of marginal product of labor equals the wage rate) from his Microeconomics 101. It has everything to do with productivity and output price, and only partially relates to hours worked.

  • RR says:

    Paul, nuclear is not cheap. Are you advocating heavily subsidizing nuclear like France? Or are you advocating a carbon tax to make nuclear more competitive like France?

  • RR,

    The capital costs of nuclear are more expensive than anything else because we sequester all our own “wastes.” We design safety built-in from the beginning. However, uranium fuel compared with coal or natural gas or oil is cheap.

    http://www.nucleartourist.com/basics/costs.htm

    Checkout the graph labelled as “US Electricity Production Costs 1995 – 2008″ here:

    http://world-nuclear.org/info/inf02.html

    If you as a fossil fuel supplier were allowed to use the atmosphere as your sewer without cost, you could market yourself as cheap, also. But in reality, once a nuke is built, it’ll last for 60 years and is cheapest of all.

    There’s lots of disinformation out there.

    BTW, if a coal plant had to abide by the same radiation standards as a nuke plant has to, then not a single coal plant would be operating. Why? Because of the uranium, thorium and radium that naturally occurs in coal which is dumped willy-nilly into the environment.

    http://www.ornl.gov/info/ornlreview/rev26-34/text/colmain.html

    Yet 52% of US electricity comes from coal. Go figure!

  • Paul Zummo says:

    Yet 52% of US electricity comes from coal. Go figure!

    I hate to nitpick an otherwise excellent comment, but we’re now down to about 45% on coal. We’re headed to natural gas taking the lead in the next 20 years or so.

  • Darwin says:

    It’s true that modern agriculture (as shown in my pictorial example) relies heavily on fossil fuels, but I think it’s probably reasonable to believe that modern engineering could come up with other ways to engage in mass agriculture.

    I’m certainly very much in favor of nuclear energy, but I don’t think it would be accurate to attribute much of the difference in productivity between Germany and Greece to choice of primary electricity generation activity. Germany (and France, though to a somewhat lesser extent) have a pretty long history of industry and productivity. Countries like Greece (or even Spain and Italy) have a pretty long history of trailing.

    That’s not necessarily the Greeks “fault” (there are some external factors that influenced their culture like being sat on for quite a while by the Turks, who had a talent for messing up the peoples they ruled) but it seems like it’s something that springs from a variety of factors including cultural and economic attitudes.

  • Paul,

    I know the link thing gets really frustrating. I just went and found what I think is the right setting and changed it, so I believe you should be able to post up to five links per comment safely now without getting caught in the filter. Sorry about that.

  • Folks,

    I was travelling today and so could not respond sooner.

    @ Paul Z. – thanks for the correction. This web site – http://www.differentsourcesofelectricity.com/ – says:

    49.8% of electricity in the US is generated by burning coal
    19.9% from nuclear power,
    17.9% from natural gas
    6.5% from hydroelectric,
    3% from burning petroleum
    2.3% from other renewable energy sources such as wind power , solar energy , geothermal power, and biomass.

    Different web sources give slightly different figures with about 50% for coal, sometimes more, sometimes less. I tried finding out at http://www.energy.gov, but couldn’t right now.

    @Darwin – regardless of whether fossil fuel is used or not, agriculture for a planet of 7 billion requires a lot of energy. That energy can be supplied by hydrogen gas produced using Very High Temperature Reactors, or by liquid fuels derived from coal, or by oil, or by natural gas, but it has to come from somewhere. No access to low cost, cheap energy – no big industrialized agriculture – back to the stone age. PS, Greece has no nuclear power plants (as far as I know). The rest of your post I agree with. You’re right.

    Thanks, BTW, for the help with the hyperlink problem. No big deal.

    For everyone, here’s a description of Generation IV Reactors:

    http://commentarius-ioannis.blogspot.com/2011/12/generation-4-nuclear-reactors.html

    In the 1st paragraph I give embedded hyperlinks to entries on Current Nuclear Reactor Designs, New Nuclear Reactor Designs, and Advanced Nuclear Reactor Designs so that I don’t have to put them all here. I do discuss in this post the very-high-temperature reactor (VHTR) which can be used to produce hydrogen for motor vehicles. Enjoy.

    One more PS, in a few days I will make related to nuclear energy one more entry at my politically incorrect and offensive blog, this time on the Carlo Rubbia Energy Amplifier, a subcritical reactor that is started up using a proton beam accelerator – too complicated to discuss right now, but this idea can “incinerate” all long lived radioactive actinides and provide low cost, pollution free electrical power for millenia on end.

  • Paul Zummo says:

    Paul, those numbers are a tad outdated. I’m actually updating the numbers at work for 2010, but in 2009, based on EIA (Energy Information Administration) data, the numbers are:
    Coal: 44.5%
    Gas: 23.6%
    Nuclear: 20.2%
    Oil: 1.0%
    Water: 6.8%
    Other (Wind, Solar, etc.): 3.9%

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