Europe’s Leisure Trap

Black Friday in the United States traditionally is the day after Thanksgiving that signals the start of the holiday season sale. At daybreak, people line up before department stores to get the special “early bird” bargains. In Europe, black Saturday falls in the last weekend of July, when the French and other Europeans set off in droves for their Mediterranean holiday destinations, and highways get jammed with traffic.

This contrast could serve as a metaphor for the difference in lifestyles on either side of the Atlantic. Americans work more hours per week and have less vacation time, but they have more money to spend. Not only does a higher percentage of American adults work, but they also work more hours per week and more weeks per year. In 2004, the French worked 28% fewer hours per person than Americans, and the Germans and Dutch each put in 25% fewer hours, and the money they earned was correspondingly lower—almost 30% less income per person than Americans received.

According to the MIT economist Olivier Blanchard, Europeans simply enjoy leisure more than Americans do, even if it means that they have less money. In his view, this difference in attitude explains the income gap between Europe and the US.

But not everybody agrees with Blanchard. Some economists point out that high tax rates in Europe make work less rewarding – and thus leisure more attractive. Other economists see Europe’s powerful labor unions as an important determinant in European attitudes towards work. After all, employees do not negotiate individually the length of the workweek. During past economic downturns, labor unions in Europe negotiated a reduced workweek or more vacation time with no reduction in wages.