On average, U.S. workers with jobs put in more hours per year than workers in most OECD countries. In 2012, only Greece, Hungary, Israel, Korea, and Turkey recorded a longer work year per employed person.
A long work year is nothing to celebrate. The following chart, from the same Economist article, shows there is a strong negative correlation between yearly hours worked and hourly productivity.
Paraphrasing Donald Rumsfeld, there are things we know and things we don’t know, and things we know we don’t know, and things we don’t know we don’t know.
One thing many working people in American don’t know that they don’t know is how poor our social benefits are compare with those enjoyed by workers in other countries. No doubt one reason is the general media blackout about worker experiences in other countries. A case in point: vacation benefits.
The Center for Economic and Policy Research recently completed a study of vacation benefits in advanced capitalist economies. Here is what the authors found:
The United States is the only advanced economy in the world that does not guarantee its workers paid vacation. European countries establish legal rights to at least 20 days of paid vacation per year, with legal requirements of 25 and even 30 or more days in some countries. Australia and New Zealand both require employers to grant at least 20 vacation days per year; Canada and Japan mandate at least 10 paid days off. The gap between paid time off in the United States and the rest of the world is even larger if we include legally mandated paid holidays, where the United States offers none, but most of the rest of the world’s rich countries offer at least six paid holidays per year.
Even though paid vacations and holidays are not legally required in the United States, some employers do provide them to their workers. The table below shows the paid vacations and paid holidays offered in the U.S. private sector based on data from the 2012 National Compensation Survey. The first two columns show the percentage of private sector workers that receive paid leave, vacation and holidays. The next two columns show the average number of paid vacation and paid holidays provided to those employees that receive the relevant benefit. The last two columns show the average number of paid vacation and paid holidays for all private sector workers, meaning those that receive and those that do not receive the relevant benefits.
Thus, on average, private-sector workers in the United States receive ten days of paid vacation per year and six paid holidays. This total still leaves U.S. workers last in the rankings even when compared with the legal minimums highlighted above. And many employers in these other countries also offer more paid leave than legally required.
Moreover, several countries require additional paid leave for younger and older workers, additions that are also not included in the legal minimums highlighted above. For example, “in Switzerland, workers under the age of 30 who do volunteer work with young people are entitled to an additional five days of annual leave. Norway offers an additional week of vacation to workers over the age of 60.”
And some countries provide additional leave for workers with difficult schedules. For example, “Australia offers some shift workers an additional work week of leave. Austria offers workers with ‘heavy night work’ two to three extra days of leave, depending on how frequently they do this shift work, and an additional four days of leave after five years of shift work.”
Several countries offer additional paid leave for jury service, moving, getting married, or community or union work. For example, “French law guarantees unpaid leave for community work, including nine work days for representing an association and six months for projects of ‘international solidarity’ abroad and leave with partial salary for ‘individual training’ that is less than one year. Sweden requires employers to provide paid leave for workers fulfilling union duties.”
Austria, Belgium, Denmark, Greece, and Sweden even require employers to pay workers at a premium rate while they are on vacation.
There is more to say, but the point should be clear. Ignorance of experiences elsewhere has narrowed our own sense of possibilities.
The Washington Post has provided some data on medical costs across a selection of countries (Argentina, Canada, Chile, and India in grey; France, Germany, Switzerland, and Spain in blue; and the U.S. in red). The data reveal that American health care is very expensive compared to other countries.
No wonder the US spends twice as much as France on health care. In 2009, the U.S. average was $8000 per person; in France, $4000. (Canada came in at $4800). Why do we spend so much? Ezra Klein quotes the title of a 2003 paper by four health-care economists: “it’s the prices, stupid.”
And why are US prices higher? Prices in the other OECD countries are lower partly because of what U.S. conservatives would call socialism – the active participation of the government. In the U.K. and Canada, the government sets prices. In other countries, the government uses its Wal-Mart-like power as a huge buyer to negotiate lower prices from providers. (If it’s a good thing for Wal-Mart to bring lower prices for people who need to buy clothes, why is it a bad thing for the government to bring lower prices to people who need to buy, say, an appendectomy? I could never figure that out.)
There may also be cultural differences between the U.S. and other wealthy countries, differences about whether greed, for lack of a better word, is good. How much greed is good, and in what realms is it good? Klein quotes a man who served in the Thatcher government:
Health is a business in the United States in quite a different way than it is elsewhere. It’s very much something people make money out of. There isn’t too much embarrassment about that compared to Europe and elsewhere.
So we Americans roll along, paying several times what others pay for medical procedures, doctor visits, and drugs.
The poverty rate in the US in the mid-2000s was about 17%. In Sweden, the poverty rate was 5.3%; in Germany, 11%. That was the rate after adding in government transfers. In Germany, the poverty rate before those transfers was 33.6%, ten points higher than that in the US. Sweden’s pre-transfer poverty rate was about the same as ours.
Jared Bernstein has this chart showing pre-transfer and post-transfer rates for the OECD countries (click to enlarge):
1. Governments have the power to reduce poverty, and reduce it a lot. European governments do far more towards this goal than does the US government.
2. It’s unlikely that America’s poor people are twice as lazy or unskilled or dissolute as their European counterparts. Individual factors may explain differences between individuals, but these explanations have little relevance for the problem of overall poverty. The focus on individual qualities also has little use as a basis for policy. European countries have fewer people living in poverty, but not because those countries exhort the poor to lead more virtuous lives and punish them for their improvident ways. European countries have lower poverty rates because the governments provide money and services to those who need them.
3. The amount of welfare governments provide does not appear to have a dampening effect on the overall economy.
As I speculated years ago (here and here), it may be hard for Americans to imagine a world where the law guarantees them at least 20 paid vacation days per year. But such a world exists. It’s called Europe.*
Americans are the lucky ones. As Mitt Romney has warned us “European-style benefits” would “poison the very spirit of America.” Niall Ferguson, who weighs in frequently on history and economics, contrasts America’s “Protestant work ethic” with what you find in Europe – an “atheist sloth ethic.”
The graph is a bit misleading. It shows only what the law requires of employers. Americans do get vacations. But here in America, how much vacation you get, or whether you get any at all, and whether it’s paid – that all depends on what you can negotiate with your employer.
Since American vacations depend on what the boss will grant, some people get more paid vacation, some get less, and some get none. So it might be useful to ask which sectors of our economy are beehives of the work ethic and which are sloughs of sloth. (Ferguson’s employer, for example, Harvard University, probably gives him three months off in the summer, plus a week or two or more in the winter between semesters, plus spring break, and maybe a few other days. I wonder how he would react if Harvard did away with these sloth-inducing policies.)
The Wall Street Journal recently (here) published a graph of BLS data on access to paid vacations; they break it up by industry near the bottom.
Those people who are cleaning your hotel room and serving your meals while you’re on vacation — only about one in four can get any paid vacation days. And at the other end, which economic sector is most indulgent of sloth among its workforce? Wall Street. Four out of five there get paid vacation.
How much paid vacation do we get? That depends on sector, but it also depends on length of service. As the Journal says,
Europeans also get more time off: usually a bare minimum of four weeks off a year. Most Americans have to stay in a job for 20 years to get that much, according to BLS data.
* The graph is from five years ago, but I doubt things have changed much. The US still has no federal or state laws requiring any paid vacation days.
There’s a write up of the study here. In a nutshell, they took 3,000 people from 22 places and asked them to rate the personality of 30 fictional people based on brief descriptions (which were the same, but translated into the local language). Ratings were on a 1 to 5 scale.
It turned out that some populations handed out more of the extreme 1 or 5 responses. Hong Kong, South Korea and Germany tended to give middle of the road 2, 3 and 4 ratings, while Poland, Burkina Faso and people from Changchun in China were much more fond of 1s and 5s.
The characters they were rating were the same in all cases, remember.
Crucially, when the participants rated themselves on the same personality traits, they tended to follow the same pattern. Koreans rated themselves to have more moderate personality traits, compared to Burkinabés who described themselves in stronger tones.
Whether this is a cultural difference or a linguistic one is perhaps debatable; it might be a sign that it is not easy to translate English-language personality words into certain languages without changing how ‘strong’ they sound. However, either way, it’s a serious problem for psychologists interested in cross-cultural studies.
I’ve long suspected that something like this might lie behind the very large differences in reported rates of mental illness across countries. Studies have found that about 3 times as many people in the USA report symptoms of mental illness compared to people in Spain, yet the suicide rate is almost the same, which is odd because mental illness is strongly associated with suicide.
One explanation would be that some cultures are more likely to report ‘higher than normal’ levels of distress, anxiety — a bit like how some make more extreme judgements of personality.
So it would be very interesting to check this by comparing the results of this paper to the international mental illness studies. Unfortunately, the countries sampled don’t overlap enough to do this yet (as far as I can see).
Source: Mõttus R, et al (2012). The Effect of Response Style on Self-Reported Conscientiousness Across 20 Countries. Personality and Social Psychology Bulletin PMID: 22745332
Neuroskeptic blogs anonymously here. You can also follow him on Twitter.
U.S. presidential candidate Mitt Romney recently traveled to Britain, Israel, and Poland, presumably to shore up his foreign policy credentials. Among a number of other statements that got a lot of attention, Romney praised Israel’s health care system, comparing it positively to the U.S. He stressed the cost differences, pointing out that Israel spends significantly less of its GDP on health care. This drew media attention because Israel has universal coverage provided by the state, and the glowing statements seemed a little odd in light of the Republicans’ opposition to the Affordable Care Act and the demonizing of the program as socialism.
But all that aside, how much do Americans spend on health care? Well…a lot. Elizabeth McM. sent us a link to a story at The Atlanticcomparing U.S. medical spending to a number of other nations:
What are we spending it on? Hospital care is the single largest expense, followed by the cost of doctor/clinic visits. Another 10% is prescription drugs. The remainder falls into a variety of categories:
With overall spending distributed among so many different sectors of the health care sector, reducing costs requires more than just increased efficiency by hospitals or lowered drug costs — it requires changes and savings throughout the system.
The Supreme Court has ruled favorably on the legality of the Affordable Care Act. Actually, despite its name, the Act has more to do with extending and attempting to improve private health insurance coverage than it does with improving care or reducing its cost.
Unfortunately for us, the effort to improve our health care system has remained within bounds set by the needs of private health care providers and insurers. As President Obama made clear from the start of his push for health care reform, there would be no consideration of a universal system.
Critics of such a universal system are always quick to argue that only market forces driven by the private pursuit of profit can ensure an efficient health care system. Of course, in determining whether this is true, we need to recognize that efficiency is a complex term and that our health care system, like all systems, produces multiple outcomes. The most obvious ones are private profit as well as the quality and cost of the relevant health care.
In terms of private profit there can be no doubt that our health care system functions well. However, the story is quite different if we evaluate it in terms of quality and cost. The fact that we continue to embrace a private health care system makes clear which measures of efficiency are considered most important and by whom.
The following map shows the countries, colored green, that have adopted a universal health care system.
What’s astonishing is how cleanly the green and grey separate the developed nations from the developing, almost categorically. Nearly the entire developed world is colored, from Europe to the Asian powerhouses to South America’s southern cone to the Anglophone states of Australia, New Zealand, and Canada. The only developed outliers are a few still-troubled Balkan states, the Soviet-style autocracy of Belarus, and the U.S. of A., the richest nation in the world.
The handful of developing countries that provide universal access to health care include oil-rich Saudi Arabia and Oman, Latin success story Costa Rica, Kyrgyzstan, and, famously, Cuba, among a few others. A number of countries have attempted universal health care but failed, such as South Africa, which maintains a notoriously inefficient and troubled public plan to complement the private plans popular among middle- and upper-class citizens…
That brings us to another way that America is a big outlier on health care. The grey countries on this map tend to spend significantly less per capita on health care than do the green countries — except for the U.S., where the government spends way more on health care per person than do most countries with free, universal health care. This is also true of health care costs as a share of national GDP — in other words, how much of a country’s money goes into health care.
The OECD just published a major study on the health care systems of its 34 member nations. It found that:
Health spending accounted for 17.6% of GDP in the United States in 2010, down slightly from 2009 (17.7%) and by far the highest share in the OECD, and a full eight percentage points higher than the OECD average of 9.5%. Following the United States were the Netherlands (at 12.0% of GDP), and France and Germany (both at 11.6% of GDP).
The United States spent 8,233 USD on health per capita in 2010, two-and-a-half times more than the OECD average of 3,268 USD (adjusted for purchasing power parity). Following the United States were Norway and Switzerland which spent over 5,250 USD per capita. Americans spent more than twice as much as relatively rich European countries such as France, Sweden and the United Kingdom.
What does all of this mean in terms of health outcomes? According to the OECD report:
Most OECD countries have enjoyed large gains in life expectancy over the past decades. In the United States, life expectancy at birth increased by almost 9 years between 1960 and 2010, but this is less than the increase of over 15 years in Japan and over 11 years on average in OECD countries. As a result, while life expectancy in the United States used to be 1½ year above the OECD average in 1960, it is now, at 78.7 years in 2010, more than one year below the average of 79.8 years. Japan, Switzerland, Italy and Spain are the OECD countries with the highest life expectancy, exceeding 82 years.
One possible explanation for this lagging performance, highlighted in an earlier OECD report, is that the U.S. ranked 26th in terms of the number of practicing physicians relative to its population, 29th in terms of the number of doctor consultations per capita, 29th in terms of the number of hospital beds per capita, and 29th in terms of the average length of hospital stay. At the same time, the “U.S. health system does do a lot of interventions… it has a lot of expensive diagnostic equipment, which it uses a lot. And it does a lot of elective surgery — the sort of activities where it is not always clear cut about whether a particular intervention is necessary or not.”
Private health care providers and insurers are clear about how they measure health care efficiency. And as long as we rely on them to set the terms of the debate we will continue to suffer the consequences.