Americans tend to work 25% more hours a year than Europeans or about 258 hours more per year.  In other words, Europeans go home while Americans work. This conclusion was identified in an unpublished working paper by economists Alexander Bick of Arizona State University, Bettina Bruggemann of McMaster University in Ontario, and Nicola Fuchs-Schundeln of Goethe University Frankfurt. Swiss work habits are most similar to Americans, while Italians are the least likely to be at work, putting in 29% fewer hours per year than Americans do.

According to a 2014 study Americans work at least 47 hours a week on average, and a fifth work as much as 59 hours a week. The study comes from the Center for Equitable Growth's Heather Boushey and Bridget Ansel.  The jobs where people are most likely to work more than 40 or 45 hours a week are highly-paid professional positions like lawyers and in fields such as business management, engineering, and finance. Low-income service jobs in health care, office support, the food industry, and the like are where people are the least likely to work long hours.  Their conclusion was that access to longer hours has become a sign of privilege in American society.

Yet how productive are Americans? "We have a lot of jobs being created in the face of not much output growth. Unfortunately, that means that productivity growth, which is the growth in output per worker [per hour worked], is very slow," Fed Chair Janet Yellen said recently during a speech at Harvard University. "Since productivity growth ultimately determines the pace of improvement in living standards for society as a whole, that's a serious and negative development."  Therefore, longer hours at work do not necessitate a productivity gain. 

In a recent study the The Bureau of Labor Statistics (BLS) found that from the second quarter of 2015 to the second quarter of 2016, productivity decreased 0.4%.   More importantly it found that unit labor costs in the nonfarm business sector increased 4.3% percent in the second quarter of 2016, reflecting a 3.7% increase in hourly compensation coupled with a 0.6% decline in productivity.  In other words, compensation is increasing in the face of lower productivity; not a good sign for the American worker.  What is driving the compensation increase?  Another BLS study found that health care was driving compensation growth, not real wage growth, which has been stagnant for many years.

So why do Americans work so many more hours than Europeans? One position is that the worker tax burden in Europe is much higher than in the U.S.  “Americans are indeed richer than Europeans, and one reason why is because of taxes that depress the incentives to work in Europe,” said Lee Ohanian, an economist at the University of California-Los Angeles.

A second reason forwarded is that Europeans have better pensions than in the U.S. and it works to incentivize workers to retire from the workforce.   Many European countries provide healthcare access universally to all its citizens.  There is really no need to go back into the labor force.  Just the opposite, more people over 65 in the U.S. are working than at any point in the past 50 years.   In part, the thought is that the shift from traditional pensions to 401(k) plans makes it harder for Americans to know when it’s safe to retire.  

Finally, it is thought that European unions are much stronger than U.S. unions, thus creating the European environment of strong worker protection and benefits.  “The data strongly suggest that labor regulation and unionization appear to be the dominant factors explaining the differences between the United States and Europe,” economists at Harvard and Dartmouth concluded in a 2006 study.

Only 34.1% of U.S. workers are considered engaged in their jobs based on the Gallup study.  The good news is that this is the highest level since Gallup began tracking U.S. workplace engagement daily in January 2011.  So the American worker is a paradox: worker longer hours, but being less productive and remaining essentially unengaged at work.  

Sources: Bloomberg 10/18/2016, The Week 6/20/16, Gallup 4/13/16