TCS Daily


The American Social Model

By Tim Worstall - February 7, 2006 12:00 AM

American capitalism really is a harsh taskmaster, isn't it? Those excessively long hours that everyone works, so different from the ease and leisure that applies in Europe along with our whiskey fountains, lakes of stew and the big rock candy mountain. That last being a product of a misdirected sugar beet subsidy of course. Indeed, there are those who insist that the US should regulate working hours, insist upon a reduction, as a way to bring some of this Euro-nirvana to the west coast of the Atlantic.

There's only one small problem with this idea. It turns out not to be true. I agree, that's never stopped a politician campaigning for something but before we heap ever more legislation onto ourselves perhaps we should work out why it isn't true.

The thing is, for all the complaints about and pointing at the way in which the American work-week has been rising over the decades there's one uncomfortable little fact (or, depending upon how you look at it, hugely comforting one): At the same time as everyone has been working ever harder for The Man -- and getting nowhere according to the doomsayers -- it's also true that Americans have been getting ever more leisure time.

The latest empirical proof comes in a paper from the Federal Reserve Bank of Boston:

We document that a dramatic increase in leisure time lies behind the relatively stable number of market hours worked (per working-age adult) between 1965 and 2003. Specifically, we document that leisure for men increased by 6-8 hours per week (driven by a decline in market work hours) and for women by 4-8 hours per week (driven by a decline in home production work hours). This increase in leisure corresponds to roughly an additional 5 to 10 weeks of vacation per year, assuming a 40-hour work week. We also find that leisure increased during the last 40 years for a number of sub-samples of the population, with less-educated adults experiencing the largest increases. Lastly, we document a growing "inequality" in leisure that is the mirror image of the growing inequality of wages and expenditures, making welfare calculation based solely on the latter series incomplete.

There's an awful lot to pick out of that one paragraph. But before anyone's head explodes over the paradox of how can there be more leisure while we all know that working hours are getting longer, allow me to explain. For women, paid working hours have indeed been getting longer. For men, they have been falling (although largely static for the past decade). But unpaid working hours for both men and women have been falling fast, indeed, faster than women's paid have been rising. So total work has declined and leisure increased.

You might want to quibble a little about the definitions of unpaid work, I'll agree. All those things like cooking, childcare, cleaning and ironing, home repairs and maintenance. Some might argue that this is not work in some sense: you're quite welcome to do so if you want but I wouldn't recommend it in front of a feminist within reach of a sharp object. Indeed, I wouldn't have the courage to make such a statement in front of my own mother if she were within 6 feet of a frying pan.

The second point is a touch more esoteric. You might recall that there are those who tell us we should work shorter hours, have more leisure as this will make us richer in a deep and meaningful manner. They might even be correct (it's certainly the life choice that I myself have made) but note that second-to-last last sentence of the abstract: It is the lower educated, lower income groups that are seeing the greatest expansion in leisure time. So, such lower income groups are in fact getting richer in that very same deep and meaningful manner which, err, rather makes complaining about increasing income inequality somewhat, well, what should we call it, obtuse? Wrong?

The reason this is happening -- why more paid hours are leading to more leisure hours -- seems to be explained by this paper from Harvard's Richard Freeman. Precisely because women are earning -- and then buying in those services which they used to do unpaid -- we're seeing greater specialization of labor (or if you prefer, more trade). And as we know that's the route to greater productivity. The actual paper itself is looking at American and German women and their participation in paid work. While they don't actually put it quite this way, the fact that many German women stay at home to make sauerkraut, while more American women go outside the home to do something they're good at, buying the food at the supermarket on the way home, means that the American women are both richer and have more leisure time.

Further, the high European unemployment rates can be explained (in part) by this as well:

"The smaller number of service jobs per adult in Germany than in the US shows up in both the least skilled service sectors and in high-tech and high skilled service sectors. The conventional explanation of the US-EU employment gap focuses on the relative dearth of low skilled service sector jobs in the EU because of the consequences on joblessness and social exclusion."

That is, if everyone stays home canning there are no simple jobs in the factories for people to do. So they rot on the scrap heap of unemployment, burning cars for entertainment's sake. This European social model doesn't seem to have all that much going for it so far really, does it?

Still, it could be true that while leisure hours are increasing in the US they are still lower than in Europe. Could be true but it isn't. This paper from Ronald Schettkat of Utrecht University explains it:

"The conventional view is that Americans work longer hours than Germans and other Europeans but when time in household production is included, overall working time is very similar on both sides of the Atlantic. Americans spend more time on market work but German invest more in household production."

The actual numbers show that American men work almost exactly the same hours, paid and unpaid together, as German men do; and German women actually 1.5 hours a week more than their sisters across the pond.

No, I think you'll agree, this isn't the basic story we get told about the European social model. We know that incomes are higher in the US but this is usually explained away as not really being higher income, as it's leisure that counts. And as we can see, what actually happens is that Americans get both the higher income and as much or more leisure as the Germans. Oh, and the Germans have problems with social exclusion as well as they're not generating the service jobs that employ the low-skilled.

Hhhhm. You know, I think it might be a bad idea to import the EU model into the US. Vastly better to import the US model into Europe. Higher wages and more time off, what could be wrong with that?

Tim Worstall is a TCS contributing writer and editor of "2005 Blogged."

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17 Comments

But we LIKE to make sauer*****...
and stand in line, and not drive through, and clean our houses with the brooms handed down to us by our forebears, and smell like this, and buy whatever Farmer Fritz and Milkmaid Margot brought to the market today, and (did I mention) stand in line, and pay extra at the quaint shop that doesn't have what I really want anyway, so Shopkeeper Joe can live in his quaint house, in this quaint village, having lunch at the quaint pub or gasthaus...

Re: The American Social Model
Why is Charlie Chaplin's face blacked out in the graphic?

The American Social Model: The HUMAN PARADIGM
Human is earth's Choicemaker. His title describes
his definitive and typifying characteristic. Recall
that his other features are but vehicles of experi-
ence intent on the development of perceptive
awareness and the following acts of decision and
choice. Note that the products of man cannot define
him for they are the fruit of the discerning choice-
making process and include the cognition of self,
the utility of experience, the development of value-
measuring systems and language, and the accultur-
ation of civilization.

The arts and the sciences of man, as with his habits,
customs, and traditions, are the creative harvest of
his perceptive and selective powers. Creativity, the
creative process, is a choice-making process. His
articles, constructs, and commodities, however
marvelous to behold, deserve neither awe nor idol-
atry, for man, not his contrivance, is earth's own
highest expression of the creative process.

Human is earth's Choicemaker. The sublime and
significant act of choosing is, itself, the Archimedean
fulcrum upon which man levers and redirects the
forces of cause and effect to an elected level of qual-
ity and diversity. Further, it orients him toward a
natural environmental opportunity, freedom, and
bestows earth's title, The Choicemaker, on his
singular and plural brow. Selah

- from The HUMAN PARADIGM

Blah blah
If you want to feel good - OK. What matters a lot to me is to be able to take a long(er) vacation in a lump, so I can travel. If I could make a wish, it would be a month in the summer and a week or two in winter. I, personally, would gladly sacrifice a few leisure hours scattered throughout the week and even the weekend for that luxury (I emphasize that - LUXURY). 10 or 12 days of vacation per year is absolutely inadequate. It is nice that many employers allow vacation increase with years of service, however, this makes switching jobs (we rightfully boast of our superb job mobility) painful.

Luckily, earning a good salary makes is possible to take unpaid vacation if you wish so. The problem with this, however, is that some employers place a limit on the length of vacation one can take in one lump.

The sad realization I came down to (for myself, at least) is you either have money or you have time. You can not have both.

And what about the Jappanese?
They have a 6-day work week. And virtually NO unemployment.

Makes the american and euro work ethics look like crap.

Chaplin
I don't think that's Chaplin. In the original movie, all of the shots were on the level, there weren't any looking up. Also the gears in that shot just don't look the same to me. I'll leave out any discusion regarding color, because coloring BW stills is too easy these days.

I'm guessing the model's face was blacked out because if it wasn't it would be easy to tell that we weren't looking at a still from the original movie.

European work ethic and social order
I am currently working in EU though I am tied to the US.

One big cultural difference that I notice when I go back home is the unbridled greed that dominates the US mentality. Whether or not that is programmed through the almost nauseating barrage of advertising is a question for the sociologists to address. But that is another huge difference in these societies. You don’t get drenched with advertising, nor propaganda, like this web site offers either.

The third thing I notice is the relative stability of the cultures here. I talk with people from war torn counties (Croatians, Serbs, etc.), and they are shocked to learn that Detroit, were I grew up, has been devastated by cultural and ethnic battles. They hardly believe me when I tell them that I am likely to be shot dead in the streets if I wander into the wrong parts of Houston, LA, Detroit, or pretty much any major US city some rural areas as well. They think that US TV is exaggerated. I tell then that it is romanticized.

When I return home with my sons, they have, on more than one occasion, say how much they miss the freedom of Europe were police are not out to trap them in something. They don’t have to worry about being thrown in jail for under-age drinking. They are able to skateboard and stay out late without being labeled as criminal fringe. They are actually nurtured in EU instead of mainlined and punished for wanting what all kids want.

But as for the case in point, that being leisure time in US vs. EU, whoever wrote this article either doesn’t have a clue, or is chucking over the total misdirection of fact.

The raw data is easily explained by the growing number of people dropping out of the US work force resulting in more leisure time. There is no mystery and no reason to be puzzled over the fact that the leisure time has increased for the poor.

The US could never do as well as EU. The social problems run too deep and the government is doing little address the real problem. The US government only caters to the greedy.

Big Crock Candy Molehill
"There's only one small problem with Aguiar and Hurst's truefactproof: it's all a question of judgment and data quality. The authors at least have the integrity to say so in their conclusions, even if their abstract hypes the extent to which their interpretation "documents" what they suppose it does."

continued... See "Big Crock Candy Molehill" at MaxSpeak --
http://maxspeak.org/mt/archives/001981.html

Not a problem
Steve, you are a definite outlier. But you can solve your problem, if not ours. Please stay permanently in Oldeurope.

Time is money and money is time
"The sad realization I came down to (for myself, at least) is you either have money or you have time. You can not have both."

Untrue.

One exchanges one's time & one's own human capital for money. This transaction is known as "employment".

Money stores value. Time is valuable because it is a necessary component to the creation of valuable things. Therefore, the money one earns from employment stores both the value one has created as well as the time one has spent creating it. This is why those who have boxcar lots of money enjoy the option of spending less time working.

In other words, at least in part, time is money and money is time.

Greed
I hear socialists and all the fruit of that poison tree accuse those who disagree with their worldview of being greedy. What nonsense. I'm a Yankee living in the EU as well, but I have an entirely different take on the issue of greed.

European workers typically demand to work less for the same or more pay, expecting employers to pick up the tab for the lost productivity. This is greed, for European workers are demanding something for nothing. Worse, they're willing to use socialist parties to coerce their employers to give them what they want without compensation. Again, this is de****ably greedy.

European workers expect a full slate of benefits regardless of whether they work full time, part time, or no time. Indeed, Europeans believe that all are entitled to as many benefits that can be squeezed out of their fellow citizens without bringing their common economy and public sector finances to ruin. Worse, few Europeans believe that public entitlements trigger an individual duty to contribute towards their provision. What naked greed!

I could go on and on, but I won't. Instead, I'll sum up by stating an axiom: Like beauty, greed is in the eye of the beholder, and one only needs to come to Europe to see greed after a socialist makeover. And unlike what Stephen reports, it's not pretty.

greed
You see greed.

I see a desire to keep what one earns rather than have it taken over by government.

European Utopia
Stephen, I couldn't agree with you more.

I too have live and worked in Europe (Germany, Switzerland, the Netherlands & Luxembourg) for a total of 17.5 years. I have always enjoyed my expatriate assignments to Europe for the history, geography, skiing and etc., etc.

However, I always dread having an entire team made up of Western Europeans. I would much rather have a team of Eastern Europeans (Poles, Czechs, Slovaks and etc.) as they have yet to experienced generations of the "greed" mentality that many effects many Western Europeans. Now of course I mean this in general, and that there are exceptions to the rule.

My last expat assignment was for 24 months in Amsterdam, with an 15-member team entirely made up of Germans/Dutch and I was almost pulling my hair out on a daily basis concerning HR/Benefit issues; company cars, expenses, time-off, its too hot, its too cold, you looked at me funny and you must stop, blah, blah, blah....

We were working on several projects, all with tight time-lines, and it was almost impossible to schedule them as they were either out "sick" or on vacation or planning their vacation while on company time.

If it had been up to me I probably would have fired at 10 of them on the spot. However, I did have one of them transferred with me back to the USA, and he is one of best team members.

However, during a 12 month assignment in Geneva my 10-member team was made up of 2 Poles, 2 Slovaks, 3 Russian, 2 Indians and 1 Mexican. I don't think I've ever worked with such a fine team. We worked so well together on the project, finished ahead of time and under budget. The big guys in the US were so impressed that they authorized me to take the entire team on a one-week ski vacation to Chamonix, France.

IMO, the original poster sounds like a 15 y.o., or the tin-foil hat is too tight.

I see the same thing
This has been my experience as well. Rather than embracing freedom and the rewards it offers to those who compete, Europeans have embraced entitlement, security and the resulting risk-free, torpid life.

Until I realized that economic equality is just a ruse trotted out as an excuse for bringing the best competitors low so everyone else can take it easy at work, I always thought the idea strange since we're obviously all very different. Now I know differently.

What comes round goes round. I like to tell people here that because they've become so lethargic and uncompetitive, the manufacturing jobs they've lost to the Chinese will be back in about 30 years or so. By then, their grandkids will be manufacturing rubber dogturds for Chinese kids, who can't afford to spend time with a real dog because they're busy doing 3 hours of homework every night.

Pass the remote and chips. I gotta catch that new reality TV show.

lots of time to reflect on working class songs such as this - werk!


W=Bushwastika
(formerly America the Beautiful.......)
As sung by the Off Shore Safety Deposit Box Choir

Oh beautiful rapacious lies,
False spreadsheets showing gains,
Oh consonant of majesty,
Its source it knows no shame
Bushwastika
Bushwastika
Thy thugs shall live tax free
And hire hoods
To steal the goods
In jack boot liberty

Arbeit macht frei!
That was the cry
Of our progenitors!
They had a plan, to better man
Just shut the oven doors!
Bushwastika
Bushwastika
We don't need New Orleans!
Just build some camps
With bright Klieg lamps
Verbotten! now routine

Oh government
Without redress
Thy fascist message strong!
The Constitution shredded now,
My gawd, what took so long?
Bushwastika, Bushwastika
How strong is thy white house!
Please rule with fear
Fox news shall cheer
We bow to Leo Strauss

Working class?
"W=Bushwastika
(formerly America the Beautiful.......)
As sung by the Off Shore Safety Deposit Box Choir"

The working class doesn't have time to indulge the fevered minds such tripe as this demands. This scrap of perversity smacks of the indoctrinated, university educated idle classes, which is why I rooted for Ripley.

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