Could Longer Work Hours Revive the German Economy?

Banker Gerald Roski is using his lunch hour to peruse the listings at a Berlin travel agency. He's trying to decide whether to spend his next vacation on the island of Mallorca or head to Dubai, where the sun is guaranteed.

"I've already been skiing in Austria this year and spent some time in France. I think some time outside of Europe would be good," he said. "I've got the whole month of October off."

It might sound decadent to much of the world, but in Germany, eight weeks off work are the norm (when you add up vacation and the legal holidays spread throughout the year). Germans enjoy amounts of leisure time that the rest of the world can only envy. According to a recent study by the International Labor Organization (ILO), workers in the U.S. work on average 1,884 hours a year, and in France they clock 1,545 hours. In Germany, the world's third largest economy, workers only put in an average of 1,444 hours.

"In comparison to other countries it seems like a lot of free time, but if you ask me personally, I think it's good," Roski said.

Most of his compatriots would agree. But there is a growing chorus of voices who are saying Germans have reached the upper limit of leisure time and that more work during the week could boost economic growth and create jobs.

The work/leisure balance

"No other European country allows its employees as much vacation as Germany," the president of the German Federation of Chambers of Commerce, Ludwig George Braun, told the Freie Presse newspaper on Friday. He said the relationship between work and leisure has become skewed and that employees' would do the economy a favor by working longer and more flexible hours. He wants a forty hour week to become the norm, instead of the 37 hours that Germans, on average, work in five days.

"German people have very short working times compared to people in other countries, and this undoubtedly has a negative impact on the competitiveness of our economy," said Hagen Lesch, an economist at the business-friendly Cologne Institute of Business Research, who conducted a study on working hours and the German economy. If the German work week were immediately increased by one hour, the study concluded, the country's gross domestic product could rise by €22 billion ($24.8 billion) this year alone.

The study found that the longer work week could bring about growth rates of 1.6 percent in 2004 and create 60,000 to 70,000 jobs. That is significant in view of the fact that the economy has only grown by 0.2 percent this year and is expected to expand only 0.6 percent next year. Those growth figures, however, only hold if employees work more hours for the same pay.

Get to work!

Leading politicians of various stripes are advocating longer hours. Earlier this summer, Wolfgang Clement, the economics minister, set off a small firestorm when he suggested Germans drop one of their holidays to help spur economic growth.

"As far as vacations, holidays and work hours go, we've reached the limit," he said.

The head of Germany's conservative Christian Democrats, Angela Merkel, also weighed in, suggesting that working hours in western Germany, which are generally shorter than those in the eastern part of the country, should be lengthened.

"We are going to have to work longer again if we are going to keep up with other countries," the CDU leader told the tabloid newspaper, Bild.

Guido Westerwelle, head of Germany's Liberal Party, said working more hours a week was preferable to having to wait until the age of 67 or 70 to retire, which could become a reality given the state of Germany's pension system.

"We will not be able to maintain our current level of prosperity with less work, only with more," he said.

Holiday history

Germany's leisure habits are rooted in the country's "economic miracle" years of the 1950s through the 1970s, when the country rebuilt its industries from the wreckage of World War Two and became an export powerhouse. At that time, Germans worked more than Americans.

But as growth slowed in the 1980s and unemployment grew, unions bargained for more vacation days and shorter hours based on the theory that cutting hours per worker gave more workers a chance at a job.

Unions say no

Unions have reacted angrily to the suggestion of a longer work week, accusing employers of using the debate as a cover to lower wages across the board. Labor leaders say lengthening the work week would only increase unemployment, which is already near record highs in Germany, and upset Germany's delicate balance between the rights of employees and employers.

"We work less in Germany but have a higher level of productivity," said Dierk Hirschel, an economist at the German Federation of Trade Unions. "We can produce more per hour because people are relaxed since they don't have to work as much as in other countries."

He would like to see a 35 hour week become the norm.