The European ‘social model’ – non merci!

On 11 May 2005, European parliamentarians voted by 378 votes to 262 in favour of scrapping the opt-out to a working time directive first introduced in 1993. The EU Working Time Directive guarantees workers 11 hours rest per day and regular breaks. It limits the weekly working time to 48 hours on average or less, and night working to eight hours out of 24. It also guarantees a minimum annual holiday of 4 weeks.

UK employers use the opt-out more than other EU member states, and the MEPs’ decision was greeted with dismay in Britain. Accusing Labour MEPs of betraying the government, Digby Jones, director general of the Confederation of British Industry, declared that ‘the European parliament has learnt nothing about the challenge of globalisation’ (1). Along similar lines, the Institute of Directors insisted that: ‘with Europe facing massive economic challenges from China and India, we should be looking to make our labour markets more flexible – not less.’

According to the Institute of Directors, abolishing the opt-out would potentially lead to a loss of output affecting over 40 per cent of employers. Four million workers in Britain regularly work more than 48 hours a week, amounting to 32 per cent of the male workforce – which is the second highest of the 15 member states of the old EU. For many business representatives, it is this ‘long hours’ culture in Britain that allows the country to overcome its traditionally low levels of productivity, and to compete with European rivals.

On the opposite side of the debate, trade unions welcomed the result of the European Parliament’s vote. According to Tony Woodley, general secretary of the Transport and General Workers Union (T&G), ‘the opt-out is harming the health and safety, the family life and the productivity of British workers’. Brendan Barber, general secretary of the Trades Union Congress (TUC), described the result as ‘a victory for a common sense compromise on the 48-hour working week’ (2).

Much of the interest in the European parliament vote has come from the thorny question it raises about the all-elusive ‘work-life balance’. Unions see the opt-out as an open door to abuse, and a reason why British workers work relatively longer hours than elsewhere in Europe. Businesses, in the name of individual freedom, argue that people should be free to choose whether they want to spend their time in art galleries or doing overtime. They see the parliament’s decision as a sign of Europe imposing its regulatory framework on to a labour market that had hitherto been exempted from continental dirigisme.

Yet both sides of the debate are misleading. The unions are exploiting the myth of ‘busy Britain’ that doesn’t withstand much scrutiny. As Jennie Bristow has argued on spiked, recent reports suggest that Britons actually have more time on their hands than is commonly thought. Referring to the 2004 edition of the British Lifestyles survey, Bristow points out that: ‘the survey, of over 2000 adults, categorised one third of people as “Busy Enough” – who find time to relax despite their busy lives – and 30 per cent as “Time Rich”, who feel they have time during the week and weekends to do what they want. Only eight per cent of people were classified as “Time Short”, and this group was mostly made up of working mothers’ (3). Instead, the ‘busy Britain’ myth suggests that people include anything under the label of ‘work-related stress’, even if they aren’t working long hours.

On the side of businesses, the idea that abolishing the opt-out clause would bury British competitiveness is misleading. The productivity gap between British workers and their European counterparts has been narrowing in recent years. In terms of productivity per hour, the UK achieved only 86.5 per cent of the EU-15 average in 1995. Yet by 2000 the gap had narrowed to 90.3 per cent, and to 95.3 per cent by 2003. Over the same period, productivity levels in France and Germany have been falling (4).

Moreover, the expansion of regulation in recent years has also been driven by businesses themselves, rather than imposed from above. Corporate governance, an example of regulation par excellence, has been pushed by leading businesses themselves, to the extent that corporations today are even writing their own constitutions. And businesses are also increasingly substituting the goals of growth and competitiveness for more relaxing pursuits. A recent report, entitled Health, Wealth and Happiness, found that around two million firms, employing more than three million people and generating around £2billion of revenue, were run by so-called ‘alterpreneurs’ – individuals who claim to set up businesses in order to improve their quality of life rather than to make money (5).

Nonetheless, the recent decision of the European Parliament is of some significance. It represents the consolidation through law of a low-growth economic model, the so-called ‘European social model’, which rests upon very dubious arguments. Firstly, in line with Britain’s new ‘alterpreneurs’, it presumes that European societies should aim for individual happiness and wellbeing rather than maximising national output. This argument, previously derided as eccentric middle-class post-materialism in TV series such as The Good Life, has become the norm today.

Secondly, the European social model is based on the idea that fixing limits to working hours is a way of tackling the problem of long-term unemployment. This amounts to governments giving up on the goal of job creation, choosing instead to redistribute existing jobs by getting people to work less. Dubbed the ‘lump of labour fallacy’, this argument is accepted only at a time of non-existent labour militancy. It is no coincidence that trade unions now demand more free time rather than demanding that governments provide jobs. These measures place the burden of stagnant growth in Europe on to the working population.

The best example of this was the French 35-hour week, introduced by Lionel Jospin’s Socialist Party in 1999. The law introducing the 35-hour week was passed at a time of relative economic buoyancy in France. The growth rate reached 3.4 per cent in 1998, 3.2 per cent in 1999, and rose to 3.8 per cent in 2000. The upward trend was shortlived, as growth fell back to 1.2 per cent and 0.5 per cent in 2001 and 2002 respectively (6). However, in the short boom period, the Socialists had been faced with the political problem of rising growth alongside high unemployment. Not quite the stagflation of the 1970s, but a problem all the same.

The 35-hour week was cast as a proactive measure to tackle unemployment in France. But for all the progressive rhetoric, the Socialist Party expected French workers to pay for the policy: firms were sweetened through a reduction in their various contributions (charges), while workers were expected to moderate their wage claims, and in some cases accept a wage freeze. Wages remained unchanged in spite of a reduction in working hours for 98 per cent of those moving to a 35-hour week, which included a wage freeze for a third of workers and a lower increase in wages for another 14 per cent (7). Similar agreements have been a feature of labour relations elsewhere in Europe. In Germany, the latter half of the 1990s was marked by a moderation in wage claims accompanied by a reduction in working hours.

Why should Europe’s working population pay the price for moribund economies? The answer, apparently, lies in the other argument used to rationalise lowering working hours and freezing wages: individual wellbeing. The anti-productivist sentiment dominant today proclaims that hard work is bad for you, and that it’s also bad for everyone else – the planet included.

This is the message from recent books such as Jeremy Rifkin’s The European Dream. Founder of the Foundation of Economic Trends, Rifkin, an environmentalist who published the 2002 The Hydrogen Economy, believes that the ‘European Dream’ is not about hard work, achievement and financial reward, but about what they call ‘quality of life’. Apparently, Europeans work to live, while Americans live to work. In Rifkin’s words, ‘the average paid vacation time in Europe is now six weeks a year. By contrast, Americans, on average, only receive two weeks. When one considers what makes a people great and what constitutes a better way of life, Europe is beginning to surpass America’ (8).

Making a virtue out of low growth was recently taken to the extreme in a French book entitled Hello Laziness – The Art and the Importance of Doing the Least Possible at the Workplace. The author, Corinne Maier, a senior economist at the French state electricity company, EDF, argued that her book was written in the interests of the ‘neo-slaves’ of middle management. While her book did little more than express disenchantment with the corporate world, hardly an illuminating or original sentiment, it was received with sympathy, as an attempt to prioritise life over work. It was also seen as an expression of modern France. As a Financial Times review put it, ‘the book is about so much more than EDF. It is a book of its time and place. France is entering a long-promised Age of Leisure. No other OECD country has witnessed as dramatic a fall in the number of hours worked per inhabitant’ (9).

Of course, there is nothing wrong with valuing your free time. The problem is that today’s ‘free time’ is something of a misnomer. In the past, the relationship between work and leisure was determined by social progress. High levels of productivity in the postwar ‘golden age’ brought modern appliances such as washing machines to the home. This was a genuinely liberating development, but tellingly it led to an increase in the total number of hours worked, due to the expansion of the labour force as more women entered work.

By contrast, today’s reduction of working hours is the symptom of a moribund economy, made possible by the moderation in wage demands. The flight from work is therefore as much a flight from freedom as it is a liberation. It rejects the idea that individual capabilities can be realised through work, and instead sees work as a constraint. Since our lives are still defined above all by work, this anti-work ethic can never be more than sticking one’s head in the sand, in the hope that the grubby world of offices and meetings will disappear.

The ‘European social model’ serves to rationalise low growth through the prism of individual wellbeing. In reality, this means that the cost of low growth is paid by Europe’s working population. Governments that find it politically expedient to promote policies for tackling unemployment do so by reducing working hours by diktat and forcing through moderated wage claims or even wage freezes. They get away with this because of the demonisation of growth and productivity as social goals.

Faced with this situation, we should refuse to accept that work can only be conceived of as a limitation to the development of human capabilities. We should also refuse to accept the idea that the path to human happiness is through idleness. Contrary to what Jeremy Rifkin might think, our modern world is about something more than the number of weeks’ holiday we get each year.

Chris Bickerton is a PhD student in international politics at St John’s College, Oxford

(1) Euro-MPs back tighter work hours, BBC News, 12 May 2005

(2) ‘Businesses angry at vote to end opt-out’, Jonathan Moules, Financial Times, 12 May 2005

(3) The myth of ‘Busy Britain’, by Jennie Bristow

(4) Economy and finance, on the Eurostat website

(5) Now small seems beautiful, Nick Pandya, Guardian, 14 May 2005

(6) Economy and finance, on the Eurostat website

(7) OECD Employment Outlook 2004. For details on the 35-hour week, see La réduction du temps de travail: la politique des ’35 heures’ en France en comparaison avec d’autres pays de l’OCDE (.pdf 414 KB), John P Martin, Martine Durand and Anne Saint-Martin, Organisation for Economic Cooperation and Development, 22 January 2003

(8) Daring to dream, Jeremy Rifkin, Guardian, 1 September 2004

(9) ‘The Slackers’ New Bible’, Jo Johnson, Financial Times, 16 August 2004