Recently, the CEO of a US manufacturer commented that his company would not invest in a factory in France due to concerns over the productivity of local workers. Surprised by these comments, Bob Hancké looked into statistics across Europe for labour market productivity and hours worked. He finds that French workers are nearly as productive as their American counterparts, and even more so than workers in Germany.
A few days ago, the Financial Times and the Guardian reported, both rather uncritically, that the CEO of the US tyre manufacturer Titan International, Maurice Taylor, had lashed out against French workers and labour unions in a letter to the French financial newspaper Les Echos de la Bourse. His not particularly flattering assessment involved such epithets as lazy (for the workers) and stupid (addressed to the unions), and he asked ‘how crazy do you think we are?’ In essence, the piece suggests that the strong trade unions in France are keeping labour productivity and therefore economic growth down: Taylor reports that when he spoke with French workers last year, they told him that three hours of work per day is ‘the French way’.
I always enjoy reading the rants of American CEOs. Usually the CEO is not hindered by an absence of facts about how European economies actually work, beyond hand-picked anecdotes for the bad news, and textbook-based comments for the worst news. But in this particular instance, I must admit that I was also a bit surprised about the sudden turn for the worse in French labour productivity. When I became a student of the French economy almost twenty years ago, possibly the most remarkable turnaround in the French economy during the late 1980s and early 1990s had been its stable increase in labour productivity. Off I went, therefore, to the OECD Statistics website to find out what had happened. In the figure below, the blue columns list the GDP per hour worked as a percentage of that of the US in the year 2011 for a handful of countries. The smaller red columns show the average total hours worked per year per worker in 2011. I included the UK and the US as Mr Taylor’s preferred places for doing business, France for the opposite reason, Germany because it is considered the economy that everyone should aspire to become, and the large southern European economies that are, by most accounts, facing the deepest problems today.
Figure 1 – Labour productivity and average hours worked
Source: OECD
French workers, as these figures show, did not suddenly fall prey to the Club Med syndrome and take, as Taylor suggests, two-thirds of their working day off. The country’s hourly labour productivity is almost on a par with the US. Surprisingly, at least for those who don’t bother to check the facts, the total number of hours worked is also higher than those of highly industrious Germany. Perhaps Mr Taylor stumbled on a group of particularly grumpy French workers, but the aggregate statistics leave little doubt that the French are still grafting away.
What was perhaps even more surprising to me when I looked at these figures was that the average number of hours worked per year in Italy and Spain, two countries that have suffered quite significantly in the current EMU crisis and are treated as lazy pariahs, are higher than, or almost as high as those in the US. Their problem, these numbers suggest, is labour productivity, not laziness. And that puts the ball in the court of government (think education) and business (think investment and technology). The UK, by the way, seems stuck in a similar low-productivity trap.
Mr Taylor’s outburst about the lack of economic viability in France has found echoes in other business publications, such as The Economist, with almost mind-numbing regularity. It highlights the important point in this debate that there are many ways to be wrong. As far as the supply-side of the economy is concerned, pointing the finger at wages and lazy workers is just plain stupid. The main responsibility lies elsewhere.
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Note: This article gives the views of the author, and not the position of EUROPP – European Politics and Policy, nor of the London School of Economics.
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Robert Hancké – LSE European Institute
Bob Hancké is Reader in European Political Economy at the LSE. His research interests include the political economy of advanced capitalist societies and transition economies as well as macro-economic policy and labour relations. His most recent books are Intelligent Research Design (Oxford University Press 2009) and Debating Varieties of Capitalism (Oxford University Press 2009).
Dear Robert,
Figures provide only one perspective. As you surely know, there are lies, big lies and statistics.
The problem with conducting business in France lies not only in productivity (output divided by hours worked), but in a whole range of factors such as idle times, manageability of subsidiaries, regulation and divestment possibilities. Unfortunately, France from today’s perspective looses on many of them.
Furthermore the declaration of politicians, such as threats to nationalize Arcelor Mittal’s steel plants, do not add attractiveness points to doing business there.
Although the expressions chosen might be to strong at some instances, they very well reflect the frustration of international business community and continuing calls for actions from French government.
Stereotypes are hard to destroy unfortunately. People always laugh at me when I say that French aren’t less productive than other countries, and that they are even more productive than many.
Well at the end of the year, it doesn’t really matter if you are more productive per hour, since this productivity is killed by the amount of vacation time and the low amount of working hours per week! By working more hours per year, workers in other countries more than make up for the loss of productivity…
So why not reinstate slavery? Long working hours, no paid vacation, no benefits, no nothing! Sounds great don’t you think?
I have been working in France for more than 10 years now and regurarly I hear comments like “you are a teacher, so you only work 18 hours”. It couldn’t be further from the truth as 18 hours corresponds only to the time you actually are in the classroom, in front of your students. Anyway, I would be really happy and proud if I were capable of doing everything I do in these 18 hours. If you can be productive in 35 hours, or less, but you do the same quality work as if you were working 40, then why not ?
So much of this goes against what the majority of people think. It’s also really interesting to see the difference between the number of hours worked and the productivity levels for each country. I’m actually very happy to see that the French do better than most of the others on the graph as they definitely have a reputation for not working very much.
The reason that French productivity is high is another in a large range of untruths such as France has the most tourists in the world. Well if you are on your way to Spain and spend one night in France your are considered a tourist or if you come for a weekend conference you are considered a tourist. If you look at the expenditure per tourist in France it ranks very low in relation to other countries. That tourist feel good story has been debunked by French economic journals themselves.
French productivity has undergone a major facelift since the 90s. Many workers have been replaced by machines and robots. I subcontracted a a very large German chemical firm that had 7 factories in France when I started in 1995. Today they have none. They moved production elsewhere. Even with the automatised many of their plants labor costs we’re still to high.
So if you have 2 workers who produce 1000€ with of goods, if you eliminate one and replace the worker with a robot you now have one worker who produces 1000€ worth of goods
Elementary my dear Watson.
This is common sense. Work hard when you work, enjoy life when you are not working. We could learn a lot from them.