Futuribles Journal n° 316

Économie, emploi - Entreprises, travail - Population

emography, Economic Activity and Growth. Why Is there Such a Disparity in Economic Growth between the United States and European Countries?

As we have already argued (Futuribles, n° 299, July-August 2004), whereas the standard of living of Europeans gradually caught up with that of the Americans in the three prosperous decades after the Second World War, the gap between them has widened again since then. What is the reason for the relative decline of Europe vis-à-vis the United States and for the varied showing from country to country within Europe? The experts disagree as to the underlying causes of these differences.
Because we are concerned with knowledge-based economies, the factors most often mentioned are the lower spending on R&D, the lags in innovation and rigidities in the labour markets of European countries, especially France. "Wrong!" say Philippe Durance, Michel Godet and Michel Martinez. Instead the explanations lie in the differences in demographic increase and the disparities in hours worked and, above all, in employment levels.
The authors' arguments come down to three factors. First, four-fifths of the difference between growth rates in the United States and Europe can be explained by the difference in rates of population increase, followed by the shorter hours worked by those in employment (an American works 25% longer hours than a French worker), and lastly the lower proportion of those in work in Europe, with significant differences among countries, for instance between Britain and France.
And here the authors proffer an argument that cannot fail to capture the attention of our readers: "Let's stop boasting about the apparent high productivity rate in France, which is largely a reflection in the statistics of the fact that the least productive workers are consigned to the scrapheap". In other words, "the hourly productivity rate is then an indicator of exclusion", and it would be better if everyone worked, so that overall activity rates rose, rather than practising discrimination in the name of maintaining productivity.

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