Europe Reluctantly Deciding It Has Less Time for Time Off.
By Mark Landler
Frankfurt, July 6 — For Michael Stahl, a technician at a cordless
telephone factory in the town of Bocholt, summer is usually a carefree
season of long evenings in his garden and even longer vacations. His
toughest choice is where to take his wife and three children on their
annual camping trip: Italy and Croatia are on this year's itinerary.
Two weeks ago, however, Mr. Stahl got a rude jolt, when his union signed
a contract with his employer, Siemens, to extend the workweek at the
Bocholt plant to 40 hours from 35. Weekly pay remains the same. The new
contract also scraps the annual bonuses every employee receives to help
pay for vacations and Christmas expenses.
"I'll have to make do with less," Mr. Stahl said with a sigh. "Of
course, the family will come off the worst."
After nearly 27 years at Siemens, Mr. Stahl, 42, feels he has no choice
but to put in the extra time. Like millions of his fellow citizens, he
is struggling to accept the stark new reality of life in a global
economy: Germans are having to work longer hours.
And not just Germans. The French, who in 2000 trimmed their workweek to
35 hours in hopes of generating more jobs, are now talking about
lengthening it again, worried that the shorter hours are hurting the
economy. In Britain, more than a fifth of the labor force, according to
a 2002 study, works longer than the European Union's mandated limit of
48 hours a week.
Europe's long siesta, it seems, has finally reached its limit — a victim
of chronic economic stagnation, deteriorating public finances and
competition from low-wage countries in the enlarged European Union and
in Asia. Most important, many Europeans now believe that shorter hours,
once seen as a way of spreading work among more people, have done little
to ease unemployment.
"We have created a leisure society, while the Americans have created a
work society," said Klaus F. Zimmermann, the president of the German
Institute for Economic Research in Berlin. "But our model does not work
anymore. We are in the process of rethinking it."
From the 1970's until recently, Europe followed a philosophy of less is
more when it came to labor, with the result that Europeans work an
average of 10 percent fewer hours a year than Americans. Germans, with
the lightest schedule, work about 18 percent fewer hours.
The job creation argument went hand in hand with the greater social
premium that Europeans place on leisure. In the land of the four o'clock
rush hour and the monthlong summer holiday, it does really seem, as the
cliché goes, that Europeans work to live, while Americans live to work.
Siemens, however, upset that conventional wisdom by threatening to move
production of cordless and cellular phones to Hungary, where salaries
are a fraction of those in Germany. That would have cost about 2,000
jobs in a country that, with a jobless rate of 10.3 percent, can ill
"It's about lowering labor costs," said Peter Gottal, a spokesman for
Siemens, which is based in Munich. "Where we are in a global
competition, 35 hours are no longer feasible. We just need more hours."
Siemens and its union say that the contract is not a template for the
rest of German industry, but it is being viewed that way. The company,
one of Germany's largest employers, is negotiating wages at five other
factories, and it may demand some of the same concessions, including
different work hours, that it received at Bocholt.
A longer workweek also looms for assembly line workers at the
Mercedes-Benz plant in Sindelfingen, in Southwestern Germany. There, the
company wants to curtail breaks during the workday.
Mercedes has not threatened to abandon Germany. But auto workers
shivered recently when Opel, which is owned by General Motors, announced
that it would assemble a compact minivan at its plant in Gliwice,
Poland, passing over its main factory outside Frankfurt, which had bid
for the job.
"The firms are in a good position in these negotiations," said Eugen
Spitznagel, a researcher at the Institute of Employment Research in
Nuremberg. "The unions recognize that the economic climate is bad."
A small majority of the German public also think that a long workweek
may help preserve their jobs, according to a recent survey conducted for
the business magazine, WirtschaftsWoche.
Even in Germany's public sector, the work is piling up. The state of
Bavaria has extended the workweek to 42 hours from 40. Chancellor
Gerhard Schröder wants to extend federal work hours to 40 from 38.5. And
Deutsche Bahn, the state railway system, is demanding up to six more
hours a week from its engineers and conductors.
Flagging tax receipts and large budget deficits are the main cause of
the state's newfound push for hours. In France, however, the government
is making a broader case that the 35-hour week, which applies to public-
and private-sector jobs, is throttling the country's growth.
"I've never been convinced of the positive effect of a 35-hour week,"
President Jacques Chirac declared recently. "I feel it's been a brake on
economic development and therefore a brake on overall employment."
Mr. Chirac is feeling pressure from his fiery finance minister, Nicolas
Sarkozy, who has called for French employees to have the right to work
more than 35 hours, if it fattens their paychecks.
Mr. Sarkozy's free-market appeal, though hardly popular with French
labor unions, suggests there may be a rebalancing in the basic trade-off
Europeans have made between work and leisure.
Since the 1970's, Europeans have been willing to accept somewhat slower
growth in wages as a price for fewer work hours and longer vacations.
The French have an average of 25 vacation days a year, while the Germans
get 30 days. The average in Japan is 18 days and in the United States,
For a long time, the price for this was not very high, since Europe had
high gains in labor productivity, which contributed to booming exports,
briskly growing economies and steady wage growth.
Nearly all of these trends turned negative in the 1990's, as
productivity growth rates collapsed, especially in comparison with the
United States. For a decade, Europe has been stuck in a period of
chronic slow growth.
"We're seeing a change because the trade-off has changed," said Daniel
Gros, the director of the Center for European Policy Studies in
Brussels. "Europeans are seeing that when times are lean, total incomes
don't rise at all. So they are saying, `Perhaps we better work longer
Mr. Gros disputes the notion that long hours are a panacea for Europe's
enervated economies. He says the productivity of workers tends to
decline as the number of hours increases. The answer, he says, is for
European companies to invest more in workplace training and technology.
To be sure, Europe's dogged pursuit of free time goes on. Sweden is
undertaking a two-year study of the social effects of a 30-hour workweek
— proving that Thorstein Veblen and his theories about the leisure class
still exert a bigger pull on the European imagination than Adam Smith
The German government has denied a recent report that it plans to scrap
a public holiday on Oct. 3 that celebrates the reunification of East and
West Germany. The other 13 paid holidays also seem safe, since most are
religious feasts, and the church here retains considerable political
Nor have Europe's longer vacations come under the knife yet. The average
number of vacation days in western Germany rose to 30 in the mid-1990's
from 28 in 1985 and 20 in 1970, and has remained stable since.
The new Siemens contract, however, is pioneering in another way: it
replaces the extra payments for vacations and Christmas with a
performance bonus, based on the profits of the portable phone division.
The payments, once meant to enhance leisure, are now intended to fuel
Mr. Stahl said he would miss the extra money at Christmas, when he would
use it to buy gifts and household goods, like a new TV set. The loss of
the vacation money next summer will probably keep his family closer to
home, perhaps in the nearby Netherlands, rather than in Croatia.
Moreover, Mr. Stahl, who began as a toolmaker's apprentice as a teenager
and is now a worker representative in his factory, is skeptical that the
performance bonus will ever translate into good money. Siemens, he says,
has not done enough to build its brand name overseas as a maker of
portable phones, which has limited its profits.
"Shareholders, unfortunately, care only about profits," he said.
Still, Mr. Stahl said he expected that few of his co-workers would walk
away from the new contract. Siemens pays well, and jobs like those in
the Bocholt plant are difficult to find in today's Germany, he says.
That attitude is even more pronounced in Eastern Germany, where auto
workers refused to rally behind the once powerful metalworkers' union,
IG Metall, when it called a strike in June 2003 to try to force about a
dozen car factories to shorten the workweek to 35 hours from 38 hours,
to bring it into line with Western Germany.
IG Metall was forced to abandon the strike, dealing the union and the
entire German labor movement a blow from which it has not recovered. The
message from the workers was: We will work more, if the alternative is
watching our jobs move across the border to Hungary or Poland.
Mr. Stahl reluctantly accepts that view as well, suggesting that the
pressure of economic competition is being felt even in Europe's most