Tue, Sep 03, 2024 page9

• A six-day workweek is no myth in Greece

  • By Lionel Laurent / Bloomberg Opinion
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  Anyone who has seen swathes of sunburnt German tourists harrying Greek workers for a beach towel this summer would 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. Sipping wine in Santorini or lounging in a villa is a lifestyle not all that accessible to actual Greeks.

  The gap is getting starker with a divisive new law allowing some Greek firms to enforce a six-day work week — a first in Europe and one that runs counter to the trend of experimenting with shorter work weeks to attract talent. Although it is technically an exceptional measure for some 24/7 manufacturing firms and not a blanket move, it might end up busting bigger cliches about Europe’s ability to sustain its leisurely ways.

  If Greece is zigging while others zag, it is not because of the productive effects of overwork. If a person works six days rather than five, they would likely produce more, given they worked more hours — but on a per-hour basis, they might turn out to be less productive if fatigue sets in.

  One study of call-center workers between 2008 and 2010 found that a 1 percent increase of working hours led to a 0.9 percent increase in output in terms of the 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 work week was floated as part of bailout talks. Greece’s economy is one of the fastest-growing in Europe, has regained investment-grade status and brought its debt-to-GDP ratio down to its lowest in more than a decade (although at 160 percent, it is still almost double the European average). The recovery has not been pain free: Real wages have declined since 2015, and fatter corporate profit margins have outraged ordinary Greeks.

  However, today it is France that is seeing credit-rating downgrades and Germany that is struggling with a recession and a “sick man” image.

  What the 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. That was driven partly by the euro crisis-related brain drain, but also by a ticking “time bomb” of demographic decline as life expectancy rises and birthrates fall.

  There are few easy answers: It is hard to automate a tourism-led country eyeing construction projects (including Europe’s largest smart city) 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.

  This is where Greece’s experiment becomes relevant to Europe, and why it should be watched closely. Europe has become synonymous with plowing the gains of decades of technological improvement and rising living standards into more free time. The continent is also struggling with labor shortages, demographic decline and flatlining productivity growth compared with US productivity improvements of more than 1 percent between 2007 and 2019.

  Trialing four-day work weeks is all well and good, but that is not, on its own, going to change worrying long-term trends. The number of people aged 20 to 64 in the EU relative to the number of people aged 65 or older fell to 2.7 last year from 3.8 in 2003; it might hit 1.5 by 2100.

  To avoid longer hours, levers 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, while Italy is signing deals for more migrant labor and Germany’s boosting of funding for kindergartens and primary schools could help more women return to work, as my colleague Chris Bryant has written.

  All countries are gazing at the Mount Olympus of artificial intelligence (AI) and hoping automation will bring a productivity boom.

  The optimistic view is that this will be enough. Research coauthored by NEOMA Business School professor Gilbert Cette suggests that if 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 would not 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.

  The world is not ideal. Combating climate change — as seen in wildfires flaring up this summer — an aging population and public debt would eat up some of those productivity gains. The need to spend more on defense has already pushed Denmark to cancel a public holiday.

  There is also always the risk that a lot of AI’s promise simply disappoints. Charles Goodhart and Manoj Pradhan’s book, The Great Demographic Reversal, says 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 cannot 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 — Germans included.

  Lionel Laurent is a Bloomberg Opinion columnist writing about the future of money and the future of Europe. Previously, he was a reporter for Reuters and Forbes. This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
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