Can Europe’s wealthy countries encourage more work?

Can Europe's Wealthy Countries Encourage More Work?

Can Europe's Wealthy Countries Encourage More Work?

The workforce in Europe is larger than ever before, yet there is a surprising shortage of workers. This can be attributed to a significant change in the labor landscape – more workers are choosing to work fewer hours.

Some of the wealthier countries on the continent face the challenge of motivating Europeans to work more, despite having high employment rates.

Governments and businesses in Germany, the Netherlands, and Austria are currently discussing ways to make additional working hours more appealing to workers. They are considering options such as expanding childcare facilities, implementing friendlier tax policies, and offering more flexible work schedules.

However, they are up against a preference among employees for more leisure time. Average working hours continue to decrease as part-time positions become more popular, and unions advocate for reduced full-time hours.

Martin Stolze, a 47-year-old high school teacher working part-time in southwest Germany, shared his perspective on the matter. He said, “There’s a saying, ‘work to live, don’t live to work.’ I believe that’s the motto of our time. People now strive to work just enough to sustain themselves and focus on things that truly matter. It wasn’t always like this.”

It remains to be seen how these countries will address the challenge of encouraging more work in a society that values work-life balance.

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Record employment across the EU

The European Union (EU) is experiencing record employment levels, indicating high demand for work and easy accessibility in Europe. Notably, countries like Germany, Austria, and the Netherlands have achieved or are close to achieving their highest employment rates ever. Additionally, there has been a significant increase in women’s participation in the workforce.

In Germany, Austria, and Switzerland, more than three out of ten employees work part-time. Similarly, in the Netherlands, approximately half of the labor force works 35 hours or less per week. In comparison, the United States has fewer than one in five employees working part-time or less than 35 hours.

Women have primarily driven the growth of part-time work in Europe. They are more likely than men to balance employment with childcare or family responsibilities.

However, this trend also means that larger workforces are not necessarily resulting in a significant increase in working hours. Despite adding nearly 7 million new workers to its workforce between 2005 and 2022, Germany has experienced only a modest rise in total working hours. In fact, the average German employee worked less than 1,350 hours per year in 2022, which is the lowest among countries belonging to the Organization for Economic Cooperation and Development (OECD).

Clemens Fuest, the head of Germany’s Ifo Institute for Economic Research, commented on this situation, stating that it reflects a society that is doing well. He highlighted that the reduced workforce requires fewer people to work, allowing for more leisure time.

However, Fuest also cautioned about the potential downside of this trend, which is the anticipated shortage of workers in the coming years. He mentioned that the significant contraction in the workforce has yet to occur.

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Difficulties with part-time work

Part-time work poses challenges, especially in sectors with limited staff like nursing and education, where job openings are increasing. Managers are finding it difficult to arrange enough care hours with more employees working less than full-time.

According to Maartje Lak-Korsten, the director of De Kleine Nicolaas Primary School in Amsterdam, many applicants prefer to work four days a week. She always starts a conversation with them, asking why they want to work four days and what they need to work full-time. She explains the advantages of working full-time, not just for their salary but also for their long-term prospects, making sure they are aware of the choices and consequences they make.

Experts predict that staff shortages will become more common in the future as the baby boomer generation retires. One challenge for employers and policymakers is that many workers in wealthier European countries can afford to work less than full-time.

In the Netherlands, it has become common for one adult to work full-time while the other works part-time, known as a “1.5 salary,” according to economist Bastiaan Starink from Tilburg University. Starink believes that working part-time is a luxury that the Netherlands can afford.

It’s not just households that opt for part-time work. Thais Zuchetti, an architect based in Amsterdam, worked 28 hours a week while completing her master’s degree. Although her employer has requested her to increase her hours to 32, she feels financially secure with her current schedule.

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The search for more hours

Employers and governments are currently exploring ways to increase the number of working hours for their employees. In the German state of Baden-Württemberg, educators must now provide a reason if they wish to work part-time for less than 75%, even if they are already working reduced hours. This new regulation affects around 4,000 teachers out of the total 115,000 in the state.

One of these teachers is Stolze, an English teacher at a high school, who currently works at 50% capacity. He finds that working part-time allows him to be more available for his elderly parents and makes his school week more manageable. Stolze acknowledges that he may have the potential to increase his working hours, but he believes that his colleagues have valid reasons that the current framework cannot accommodate.

While some governments are adopting a more accommodating approach, implementation is proving to be challenging. The Netherlands, for example, initially planned to expand child care subsidies by 2025 but had to postpone it to 2027 due to budget constraints. The Conservative-Green government coalition in Austria faced opposition when proposing to lower employer taxes on work income, with concerns raised about the funding of social benefits.

Similarly, Germany has not yet made changes to its couples splitting tax rule, which currently favors households with 1.5 salaries. However, there are reports that the country is considering implementing measures such as mandating businesses to allow employees to work from home. These efforts aim to address the search for more hours and create a better work-life balance for individuals.

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Discovering the potential within a fresh labor landscape

A Dutch organization is taking an innovative approach to assist employers in maximizing the productivity of their current workforce. Known as Het Potentieel Pakken, meaning “Seizing the Potential,” this non-profit organization collaborates with clients to develop effective strategies for engaging employees and creating efficient work plans within teams.

With substantial funding from the Dutch Health Ministry, Het Potentieel Pakken primarily focuses on partnering with home nursing agencies and school districts. Founder Wieteke Graven emphasized that they have never approached the majority of predominantly women employees, who are often willing to work additional hours.

Graven explained, “We frequently encounter individuals who have been working only 18 hours a week for the past 20 years, and when asked why, they simply respond, ‘Well, that’s what I started with and never thought to change it.'”

This observation underscores the prevalence of part-time work and emphasizes the need for a broader discussion on this matter. Graven further stated, “I believe there is always a delicate balance between personal choices and societal needs. This fundamental debate deserves our attention.”

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