Europeans are frustrated. They have been behind the United States economically for years and thought this was due to lack of economic integration. So they created the European Union, with a common currency and virtually free mobility of goods, capital and labor throughout the continent. Yet Europe continues to lag.
A new report from the Bureau of Labor Statistics shows the United States with real gross domestic product per person in 2003 of $34,960 (in 1999 dollars). This is well above every European country. The most productive European country, Norway, has a per capita GDP of just $30,882 (converted using purchasing power parity exchange rates). The major countries of Europe are even further behind: United Kingdom ($26,039), France ($25,578), Italy ($24,894) and Germany ($24,813).
In other words, Europeans produce no more per year than Americans did 20 years ago. And they are not catching up. According to the Bank for International Settlements in Switzerland, the productivity gap between the United States and Europe is actually widening. In the Euro area as a whole, workers were 86 percent as productive as American workers in 1995. In 2003, this fell to 84 percent.
As a consequence, living standards are much lower in Europe than most Americans imagine. This fact is highlighted in a new study by the Swedish think tank Timbro. For example, it notes that the average poor family here has 25 percent more living space than the average European. Looking at all American households, we have about twice as much space: 1,875 square feet here versus 976.5 square feet in Europe. On average, Europeans only live about as well as those in the poorest American state, Mississippi.
Where Europeans are better off, perhaps, is in terms of leisure -- they have a lot of it. According to the Union Bank of Switzerland, the typical European has two to three times as many paid days off per year as Americans. And according to Eurostat, Europeans don't put in much of a workday, either. According to the report, the typical European only does a bit more than five hours of gainful work per day, with Norwegians at the low end at four hours, 56 minutes per day, and (surprisingly) the French at the high end at five hours, 44 minutes per day.
One reason for the short workday is that Europeans seem to get sick a lot more than Americans. According to a July 25 report in The New York Times, on an average day 25 percent of Norway's workers call in sick. A 2002 study in Sweden found that the average worker there took more than 30 sick days per year. Makes you wonder just how good their health care systems really are.
Bruce Bartlett is a former senior fellow with the National Center for Policy Analysis of Dallas, Texas. Bartlett is a prolific author, having published over 900 articles in national publications, and prominent magazines and published four books, including Reaganomics: Supply-Side Economics in Action.
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