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Chart of the Day: Greek workers work 48% more hours than Germans

By Marc Chandler

The conventional narrative about the European debt crisis largely accepts the contention that the periphery of Europe have different work habits and these account to a large extent the economic and financial problems. Yet often time the discussion takes on such ethnocentric dimensions that sometimes it is difficult to see what is real.

This chart: to the right illustrates what many will find to be counter-intuitive. 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.

Editorial note: The OECD adds the following informational guideline about the German numbers: “The data are calculated within a comprehensive accounting structure, based on establishment survey estimates of weekly hours worked by full-time workers whose hours are not affected by absence, and extended to annual estimates of actual hours by adjusting for a wide range of factors, including public holidays, sickness absence, overtime working, short-time working, bad weather, strikes, part-time working and parental leave.”

Marc Chandler

About 

Marc Chandler joined Brown Brothers Harriman in October 2005 as the global head of currency strategy. Previously he was the chief currency strategist for HSBC Bank USA and Mellon Bank. In addition to frequently providing insight into the developments of the day to newspapers and news wires, Chandler's essays have been published in the Financial Times, Barron's, Euromoney, Corporate Finance, and Foreign Affairs. Marc appears often on business television and is a regular guest on CNBC and writes a blog called Marc to Market. Follow him on twitter.

28 Comments

  1. Thanks for posting this. I’ve yet to see a credible look at tax regimes in the stressed Euro economies, I think it would be revealing. Spain, Portugal and Greece, and to a lesser extent Italy are all former dictatorships who’s transition to representative government was ratified by the devolving dictatorial powers. Part of the agreement to turn over power to electorates was an effective tax shield on concentrations of wealth in existence at the hand over of power. Subsequently the wealthy in these nations have been free riders on the efforts of popular governments. If distressed Euro-zone governments had Germany’s tax regime I suspect they would not be distressed. The issue is not lazy labor, it’s free riding corporatists. 

  2. Armin Mueller says:

    Greeks work 29 % more than the Swiss on average according to the OECD. I talked about that with a greek colleague, now working in Switzerland: The explanation could simply be that this data is not better than the greek statistics about deficits and debt when they entered the Eurozone.

    • Rubbish. It is well known that the Greeks work longer hours. Even if you fudge the numbers 10 or 20%, the differential is vast. What Marc says about what this says about productivity and industrial policy is a lot more important than the number of hours worked. The Greeks need to increase productivity and that means making drastic changes to their industrial organisation.

      • Anonymous says:

        Though that is out of control of the workers. It is lack of capital investment that is reducing the productivity figures. Now that could be because the tax regime makes it pointless. Though during the last decade the problem has been that the tax regime has been so weak, meant that tax evasion was more profitable than capital investment. 

        • It IS out of workers’ control. This is no slight on hard working people. It has more to do with industrial organisation. 

          In Germany, Japan and Switzerland for example, the currencies appreciated sharply during the past 40 years and I would argue it is because of this that their industries have been forced to move up the curve in manufacturing more value-added products and less basic manufacturing. The point being that a weak currency allows lower productivity companies that would be forced out of the market or to gain productivity to continue in business. So the currency can have a lot to do with this in my view. The euro had appreciated against the dollar and generally but the surge of capital into the periphery ended up swamping this effect and distorting capital investment.

          • Anonymous says:

            Yes the currency has been the problem, but I think that the surge of capital was badly invested. In Spain and Ireland most ended up in a massive property bubble. I am not sure what happened in Greece but it never ended up being invested by companies. I suspect that much ended up in London inflating the million pound housing bubble there, or being spent on German sports cars. 

            The masses are suffering as can be seen from this BBC article. http://www.bbc.co.uk/news/magazine-16472310 This needs to be resolved fast rather than allowing US banks to slip the CDS liabilities. The best outcome will be a Icelandic solution followed by massive aid to stabilise the country before it revolts. 

        • frank r says:

          Labor and capital are only 2 of the factors of production. The other is rent-generating factors, including land, telecom bandwidth, natural monopolies, artificial monopolies (patents, restrictions on competition), government redistribution. The problem in Greece and Italy is rents, not lack of capital (whether physical, human, social or intellectual) or inherently unproductive labor. Too may restrictions on competition. High taxes on productive labor, which are then transferred to unproductive government employees and pensioners. High land rents, which is another effective tax on productive labor to benefit a parasitical rentier class.

          • Anonymous says:

            Rentiers are also advantaged that they have exceptionally low capital gains taxes. If we had much higher capital gains taxes then the incentives to speculate on asset bubbles would disappear. The US and much of the world have spent the last thirty years transferring taxes from the rentiers to the workers, though regressive consumption taxes like VAT, and away from companies. 

      • Armin Mueller says:

        Sorry, it’s not rubbish, it’s complicated:
        1) Here’s the warning that the OECD itself gives with these data: “The concept used is the total number of hours worked over the year divided by the average number of people in employment. The data are intended for comparisons of trends over time; they are unsuitable for comparisons of the level of average annual hours of work for a given year, because of differences in their sources.  Part-time workers are covered as well as full-time workers.”
        2) If you look at comparable data (for example hours worked in manufacturing from ILO) the difference between Greece and Switzerland vanishes.
        3) A lot of activities in a “developing” country like Greece are difficult to compare with countries like Germany.
        But I agree totally with you about the need to increase productivity in Greece. For example they have no competitive packaging industry for their olive oil, so they must ship the large part of it to Italy for bottling.

  3. I recall another interesting statistic which demonstrates a similar workforce characteristic. Some european countries have lower per capita productivity, but higher per worker productivity. There are some economies with more social welfare that simply allow the poorly qualified workers (or perhaps less healthy or handicapped in some way) to be secure with unemployment or work less hrs per week. It is a challenge to find the optimum balance between employee improvement expenditures and unemployment benefits that will obtain the most competitive economy.

  4. Marton says:

    Please don’t perpetuate these statistics without looking at labour force participation. Germany has a much higher labour force participation than Greece, by dint of more part-time-working spouses (81% vs. 68% according to the OECD).

    Germany also has a much lower average number of hours worked than Greece (because all those part-time working spouses factor into the stats, but the stay-at-home spouses don’t). One stat without the other is meaningless.

    • Marton, These figures are not meaningless in the least. There are always differences between economies of the sort you identify. One could say the same about the US versus Germany or the US post-2008 versus the US pre-2008.

      However, here the differences you point to between the Germans and the Greeks in labor participation rates and what they imply about apples to apples comparisons are not going to be enough to make up for the differential in hours worked under any scenario you use to make cross-country comparisons. Marc even calls out the need for a more rigorous analysis to strip out these variables in distorting the numbers. The bottom line is that Greeks do in fact work long hours — longer than Germans, even comparing full time private sector employees. The myth that Greeks are lazy and Germans are industrious and that this has some significance in the sovereign debt crisis is everywhere one turns. It is false.

      This post demonstrates that the issues for Greece are not about working longer hours but are largely ones of productivity, industrial organisation, pensions and retirement, a factor of which you have have called out.

    • Anonymous says:

      Labour participation rates in the US and UK were the main driver for a housing bubble. In fact for most Americans it was the only way to cope financially. In the UK it was the only way to get on the property ladder as homes were priced outside the reach of most single earners. So for Greece to have a lower participation rate can be meaningless. They would not be counted as unemployed as they would be homemakers, and that is a valuable contribution to society even if they simply raise their children. Simply increasing the numbers working slashes productivity as it will take time to employ them full and or their contribution to appear in national statistics. 

  5. Anonymous says:

    Could there be a difference between hours WORKED, and hours clocked in and being available where one works?

    Of course, in the end, productivity would be the best measure.

    • There could be but that is unknowable and would depend on a subjective (and probably inherently biased) assessment of how productively workers employ their time. 

      As you indicate, productivity is the only way to get at this and that measurement is perhaps even more relevant to the industrial organization of a given country and its enterprises than it is to the actual productivity of its workers as Marc intimates above.

    • Anonymous says:

      What about Japan then? With the vast numbers of people who are paid by companies simply to sit at a desk. It has worked well for Japan in terms of social cohesion. The BBC showed a report this week about a Japanese company that has failed to reduce numbers and kept its work force intact with pay reductions across the board. 

      The problem in Greece is that the ship owners are exempt from taxes and are certainly wealthy enough to pay taxes. Productivity is also dependant on many factors such as quality of education, which in Greece is good, quality of roads, legal system etc. 

      Then you have to consider what the comparator is? If it were GDP per barrel of oil then the US does badly because of its poor infrastructure and excess of low fuel economy trucks. Productivity can be measured a number of ways. 

      • frank r says:

        The ship owners could move overnight. It would be madness to tax them heavily. What should be taxed is land and other monopolies (telecom bandwidth, patents, etc). The Greek masses are b*tichin’ and moain’ because of a measly 1% or so property tax. What they need is a 10% tax on land values (and 1% on improvements). But try to explain why to the average Greek (or American or any other nationality where the peasants have been brainwashed into thinking of themselves as members of the capitalist class). Way over their head. Everyone wants to tax the p*ss out of productive labor and capital and let the unproductive rentiers off scot-free, because everyone dreams of being an unproductive rentier themself someday. Final result is that there is less labor, less capital and everyone spends all their time scheming to join the rentier class (get a government job, go on disability, buy tax-advantaged real-estate, etc).

  6. Adilmina says:

    this might be true for private workers. However 25% of the work force in Greece which is about 1.1 Million workers are employed by the government and most of them are sitting on their Kolos in the Coffe shops!! They do not work more than 25 hours a week if that!!

    • frank r says:

      exactly. Though I prefer to call these drones “petty rentiers”. Rentier, in turn, is merely a synonym for parasite, meaning one who consumes more than he produces.

      Rentiers should be contrasted with capitalists, who at some point in the past consumed less than they produced and used the savings to create capital, so as to enhance their productivity. As long as these capitalists are producing as much or more than they consume, they are not parasites, regardless of how much more they consume than workers who don’t have capital. Greece doesn’t have a lot of true capitalists, because the deck is stacked against them. Greece is a land of rentiers.

  7. Rodion Raskolnikov says:

    One simply can not compare quantity with quality – finally the only argument that counts is the question about the result. 
    Sleeping for 10 hours a day at a desk is never honestly be an alternative competition for someone who is dong real work even for just 2 hours. 
    The Greeks do earn now, what they have planted since sneaking in the EU and grabbing as much as they could  and spend it for nonsense just as the party had to go on for ever. They will soon find themselves back in the place, where the ever belonged. One simply can not feel sorry for this. You get what you give

    • Anonymous says:

      I think that you are confusing the EU with the Eurozone. While I agree that they sneaked into the Eurozone with help of dodgy dealings from Goldman Sachs, the rest of the EZ group accepted them even if it were not with 100% conviction.

      If you want to use the quality argument then it is adjusted in the GDP figures. You would not by an inferior product at the same price as a superior one. In the end it is adjusted via price till it has the same marginal benefit as a better product. 

      Greece’s problems lie with the government not necessarily with greek workers. It has insufficient funding to actually employ enough tax collectors to enforce collection. 

      • Rodion Raskolnikov says:

        No, I am not talking about Eurozone – this was just another brick in the wall – but EU.
        Entering EU and even the time before, provided Greece with enough financial support to build up a functioning infrastructure and not to forget industry to be part of the puzzle. It was like the story of the farmer who used the seed to bake bread just see himself facing empty fields in summer. 
        The responsibility for the actual situation lies not with the government but a mentality that puts every government like the past and even now existing in power. Its the Greece’s mentality to compare with the antic Hellas but keep on behaving like still living under Osmanians. 
        Filling ones pocket and passing the bill to every handy fool is not fine plane to run a country. 

        • Anonymous says:

          Yes but decades of bad government policy change public attitudes to such activity. Corrupt leaders only encourage corrupt citizenry. Take the UK. As pay in the banks shot up it meant that bosses in every other business pushed their pay up even if they were mediocre. Same applies for tax evasion. If the rich get away with it why shouldn’t everyone else. It is the result of bad policy for years that creates such mentality. I suspect that things will get worse in the rest of the EU and the US unless there is a drive to punish such activity. I still assert that it is the result of long periods of bad policy that we get such attitudes. If Greece had been tougher on corruption and tax evasion in the past then it would not be anywhere near as bad now.

          • frank r says:

            Greece is a democracy. The corrupt leaders were elected by a citizenry that was already corrupt. Honest citizens know that something for nothing isn’t possible. But that is what the Greek pols promised the voters to get elected. I have no idea why the Greeks have always been so corrupt compared to say the Scandinavians, but they are. Nor do I have any idea as to what it might take to make the Greeks honest again.

            The American elite went from corrupt in the 1920′s to honest in the 1950′s, because of a genuine fear of worldwide communism, then back to corrupt by the late 1970′s as that fear faded. The German elite went from corrupt in the 1930′s (when they backed Hitler to save them from communism) to very honest by the 1950′s, and they are still much more honest than the American elite. Such is the instructional power of having your country get the living sh*t kicked out of it by the combined forces of the Americans, Brits and Russians.

          • Anonymous says:

            I would say that Germany is still far more honest than the US and the UK. Both of which have serious financial problems brought on by banks. German banks lent abroad but the problem was so was everyone else so bubbles were being inflated everywhere. One big problem is capital controls are banned within the EU. If German banks had not been able to lend elsewhere then they would have had surplus funds. It is the EU that needs some changes to balance out the instabilities of the EZ. Without these extra funds the periphery would not have been able to inflate their bubbles and would have addressed their problems earlier. Also there needs to be controls on the total loans available. Current economic policy is to ignore debts because it is an asset for someone else. Until that debt becomes a burden. The issue is that Greece was a victim to some extent of the policy. If they had not had cheap money they would have had to deal with their problems sooner. 

  8. Guestlove says:

    1) very sceptical about all #s from Greece
    2) quality =! quantity
    3) don’t forget: when do people retire?

    If we have fake numbers on unproductive hours from people who retire at an early age… .. .