NCPA - National Center for Policy Analysis

EUROPEAN JOB-KILLING MACHINE

September 22, 2006

A major reason the United States has experienced more economic growth than most developed countries is that unions and the government have, for the most part, been sensible enough to recognize both differences in job requirements and in personal preferences, says Richard Rahn, director general of the Center for Global Economic Growth.

Nowhere is this more evident than within the European Union (EU). Rigid work rules have handcuffed employers and employees with mandatory breaks and days off that completely ignore the necessity of "crunch time" at busy firms, or the freedom for employees to choose their own schedules, and to work as hard and earn as much as they wish, says Rahn:

  • The predictable result is there has been little growth in private-sector employment in the EU.
  • In fact, the United States, with a smaller population, has created more private sector jobs in the last four years than Europe has in the last 20.
  • And slow private sector growth has led to sluggish, inefficient economies.

Consider:

  • Sweden has created virtually no new net private sector jobs since 1950, and has fallen from the fourth-richest, on a per capita basis, member of the Organization for Economic Cooperation and Development in 1970 to only 16th now.
  • Germany is slated to raise its value added tax (VAT) from 16 to 19 percent at the beginning of 2007; this will further dampen consumer demand, and lead to even lower job creation, already at an unemployment rate of more than 10 percent.
  • France has a requirement that workers not work more than 35 hours weekly, even if they want to, and the almost impossibility of firing workers, no matter how lazy and incompetent.

Source: Richard Rahn, "European Job-Killing Machine," Washington Times, September 21, 2006.

 

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