Anyone who’s seen swathes of sunburnt German tourists harrying Greek workers for a beach towel this summer will know how wrong economic cliches can be. Greeks, depicted as “lazy” during the euro crisis, actually work more hours than anyone else in Europe, and supposedly workaholic Germans work among the least.
Now the gap is getting starker with a divisive new law allowing some Greek firms to enforce a six-day workweek -- a first in Europe and one that runs counter to the trend of experimenting with shorter work weeks to attract talent. Although this is technically an exceptional measure for some 24/7 manufacturing firms and not a blanket move, it may end up busting bigger cliches about Europe’s ability to sustain its leisurely ways.
If Greece is zigging while others zag, it’s not because of the productive effects of overwork. If I work six days rather than five, I will likely end up producing more given I’m working more hours -- but on a per-hour basis I may turn out to be less productive if fatigue sets in. One study of call-center workers between 2008-2010 found that an increase of working hours by 1 percent led to an increase in output by 0.9 percent in terms of number of calls answered. Calling this a “worker-friendly” law, even if the idea is to better enshrine overtime pay, rings a little hollow.
Nor is this some kind of emergency measure comparable to the dark days of the euro crisis, when the idea of a six-day workweek was floated as part of bailout talks. Greece’s economy is today one of the fastest-growing in Europe, has regained investment-grade status and brought its debt-to-GDP ratio down to its lowest in over a decade. The recovery hasn’t been pain-free: Real wages have declined since 2015, and fatter corporate profit margins have outraged ordinary Greeks. But today it’s France that’s seeing credit-rating downgrades and Germany that’s struggling with recession and a “sick man” image.
What this law is really about is tackling a labor shortage after Greece’s exodus of more than 1 million working-age people between 2010 and 2022. This is driven partly by the euro crisis-related brain drain but also by a ticking “time bomb” of demographic decline as life expectancy rises and birth rates fall. There are few easy answers: It’s hard to automate a tourism-led country eyeing construction projects and a self-described “tough but fair” immigration policy has yet to deliver the workers Greece needs. Europe’s ultimate resort economy has therefore turned to a “last resort,” as economist Pinelopi Goldberg writes: More hours from existing workers.
Europe has become synonymous with plowing the gains of decades of technological improvement and rising living standards into more free time. But the continent is also struggling with labor shortages, demographic decline and flatlining productivity growth compared with US productivity improvements of above 1 percent between 2007-2019. Trialing four-day workweeks is all well and good, but that’s not, on its own, going to change worrying long-term trends. The number of people aged 20-64 in the European Union relative to the number of over-65s fell to 2.7 last year from 3.8 in 2003; it may hit 1.5 by 2100.
To avoid longer hours, levers will need to be pulled -- on immigration, automation and participation. France is trying to lift the participation rate by getting more people into work who would otherwise retire; Italy is signing deals for more migrant labor; Germany’s boosting of funding for kindergartens and primary schools could help more women return to work. All countries are gazing at the Mount Olympus of artificial intelligence and hoping automation will bring a productivity boom.
The optimistic view is that this will be enough. Research co-authored by NEOMA Business School’s Gilbert Cette suggests that if future productivity gains match those observed in the US from 1900 to 1975, working hours could average about 25 hours per week by the end of this century. That wouldn’t be far off John Maynard Keynes’s prediction of a 15-hour week by 2030, and would make talk of a six-day week ultimately look like a blip.
But the world isn’t ideal. Combating climate change -- as seen in wildfires flaring up this summer -- an aging population and public debt will eat up some of those productivity gains. The need to spend more on defense has already pushed Denmark to cancel a public holiday. And there’s always the risk that a lot of AI’s promise simply disappoints. Charles Goodhart and Manoj Pradhan’s book, The Great Demographic Reversal, warns that staffing needs to care for the elderly alone could offset automation’s gains, with the US potentially facing a shortage of 120,000 physicians by 2032.
If Europe can’t find a way to overhaul its museum-like economy, Greece’s experiment with longer hours may end up being a vision of the future for all of us.
Lionel Laurent
Lionel Laurent is a Bloomberg Opinion columnist writing about the future of money and the future of Europe. The views expressed here are the writer's own. -- Ed.
(Tribune Content Agency)
