Paul Krugman defends the state of the French economy, in particular the small amount of work the average Frenchmen puts in relative to Americans.

First things first: given all the bad-mouthing the French receive, you may be surprised that I describe their society as "productive." Yet according to the Organization for Economic Cooperation and Development, productivity in France - G.D.P. per hour worked - is actually a bit higher than in the United States.

It's true that France's G.D.P. per person is well below that of the United States. But that's because French workers spend more time with their families.

There are several reasons why the French put in fewer hours of work per capita than we do. One is that some of the French would like to work, but can't: France's unemployment rate, which tends to run about four percentage points higher than the U.S. rate, is a real problem. Another is that many French citizens retire early. But the main story is that full-time French workers work shorter weeks and take more vacations than full-time American workers.

The point is that to the extent that the French have less income than we do, it's mainly a matter of choice.

1. The French labor market is more heavily regulated. In particular, as in much of Europe, it is much harder to fire people. Tax rates are also higher. That gives employers an incentive to look for more capital intensive methods of production. Cutting back on the use of labor raises its marginal product and its average product, and so GDP per worker rises. Higher GDP per worker can be a bad thing, contrary to Krugman's suggestion.
2. Those higher taxes also mean that working is less attractive, leading to longer vacations and the shorter work weeks. But how does Krugman know that time off work is spent with the family? He doesn't say, and I am not aware of any evidence that they do. They certainly are not having more children.
3. Krugman notes the high unemployment rate in France, but writes as if it is simply sitting there, a fact of life like hurricanes, rather than a consequence of France's labor market policies that make it less attractive to hire people, and less attractive to work.
4. And simply because his sloppiness is annoying me this morning, I note this sentence.

   The French family, without question, has lower disposable income. This translates into lower personal consumption: a smaller car, a smaller house, less eating out.

   Contra Krugman, eating out is not necessarily a Good Thing. When your after tax wages are high, cooking at home is expensive. My mother did not work, and we ate out rarely when I was a kid. My sister works, my wife works, my sisters-in-law all work, and so we all eat out more because cooking at home is more expensive than it was when I was a kid. This is standard stuff in economics for at least thirty years. It is kind of sad that Krugman seems unaware of it. And those smaller cars are not simply the result of lower disposable incomes. Current gas prices throughout Europe are nearly $5/gallon, thanks to high fuel taxes. With those prices, you don't buy big American cars. You buy cramped, unsafe little cars with really good mileage.?

William, that's good stuff. I read that Krugman article this morning and knew it was mostly fluffy nonsense, but you've really nailed him here.

Excellent article, but I think you are wrong on one point - the French birth rate has risen in recent years. According to that unimpeachably reliable source, Jacques Chirac, it is now Europe's highest. Whether this has anything to do with the 35 hours week is another matter.

You haven't nailed him at all; a few of your comments have a point and several of them are plain wrong.

1. You're essentially right here. Percentage of GDP per worker just isn't an important piece of information unless it's given a context. If there were only one Frenchman with a job, the %GDP/worker would be 100% and the %GDP per hour worked would be similarly through the roof. Conversely, a country where every man and woman of working age had a decently-paid, fulfilling job might have a low %GDP/worker. So what? The comparison just isn't interesting. A more important question is: How pleasant is it to live in the prevailing economic conditions?

2. Higher taxes don't cause longer vacations or shorter work weeks; they're part of the same culture of workers' rights. It's not as though French workers can say, "Well with so much of my paycheck going on tax, I'm going to take a six-week summer vacation."
You're right that Krugman's making a leap when he says they spend this time with their families, but they certainly have more free time to spend that way if they decide to. Of two average workers, one French, one American, with identical devotion to their respective families, you could expect the Frenchman to spend more time with his. And a little with his mistress.

3. I know you live, or have lived, outside the US, so there's no excuse for this nonsense. You can put the morality bar where you like, but what you say is no more enlightening than the statement that it's less attractive to hire US workers that it is to force Indochinese children to work for free. Bad, bad human rights, getting in the way of the right to make a buck! A rewarding job doesn't become less tempting when some of your money goes to pay for universal healthcare, a social safety net or a decent state pension.

4. Bored now. Apart from the extremely poor living on McDonalds, where the hell is it more expensive to eat out than it is to cook at home? And what's the connection between your kinswomen having jobs and being 'too poor not to eat out'? Sounds like it's time that you're short on, not money. How the hell can cooking at home suddenly become expensive because your 'after-tax wages' (or 'income') have gone up?

Perhaps somebody might enlighten Nick on the concept of opportunity cost...

Nick, my wife gets paid about $150 per hour. For her to cook a meal costs much more than dinner for four at a nice neighborhood restaurant.

I love the bit about their lower income being a matter of choice. A choice that their government made for them.

Of course, you don't have the choice to work less and spend more of your time other things, such as spending your time with your family. I think the french attitude is a bit extreme - they have to work longer hours to imporve competitiveness in a global environment. The american attitude is also to me a bit extreme. I work for a us company in Ireland and the guys in the new york office get a mere ten days a year holidays. Perhaps its just my employer but if not that seems a bit unhealthy. Certainly any of them I've asked about it envied the 21 days we get over in Ireland.

The real reason for the smaller cars isn't gas mileage - most of them don't drive enough miles for that to be a big concern when car shopping. But have you ever seen the French roads? You literally cannot fit a stream of Titans and Cadillacs through the streets. They buy small cars to fit on small streets - that's also why they drive so many scooters.

William,

Are you dumb? Or do you think all those who read your stuff are?

I'm no expert. Period. However, the Krugman argument on productivity is (as quoted by YOU) "GDP per hour worked" not as you seem to insist "GDP per person" or "GDP per worker". The distinction seems clear to me. If you can argue against his assertion, then do so, but don't change the subject.

That small detail might serve to put your writing in a proper light.

I was stunned at how flippantly Krugman relegated the role of taxes to a parenthetical deeply-buried near the end of the piece. I don't care what the study he cites says: The more you tax wages the less people will work. End of discussion.

Any wise comments on why French car makers make some money and build safe cars when US car makers cannot?

In response to Roisin, Socialized healthcare might be a start. GM & Ford are the largest healthcare providers in the US.

In response to Y81 & CT; since when is cooking your family a meal at a lower nominal cost and greater care for preparation an "opportunity cost"?

Krugman's column was indeed flawed.

Here is what he should have written:

1. The French economy is stagnant and does not generate enough jobs for its citizens. The French unemployment rate is 66% higher than that of the U.S.
2. Being an unemployed Frenchman is not a choice or side affect of French worker’s spending more time with their families.
3. Most importantly, French people are not more happy or satisfied as their American counterparts as Krugman suggests. In fact, its quite the opposite.
We’ve detailed all of these arguments using many of Krugman’s same sources.

Krugman's French Connection or Les Miserables?

M-Train, it makes a lot more sense for my wife to work an extra hour in the office and then have us all meet for dinner at a restaurant rather than have her come home an hour earlier and slave over a hot stove to produce a meal of equivalent quality. Now if she liked cooking, or produced food that was dramatically better than restaurant food, that would be different, but it would not be typical for an American woman.

Y81, I understand the time dilemma and the fact that your wife earns more money working than not. If you and your family find more utility in eating out and can justify the expense for that reason, I can see the opportunity cost. To compare your wife's hourly wage to cooking dinner is a stretch. Unless she's making a five course meal, which might include a soup starter, baked duck, and a custard dessert (doesn't sound like that's your wife's thing) I don't see how it takes an hour to cook dinner. I cook for my wife and children often (and I earn $80 hour), using simple things like a chicken breast and some fresh vegatables, and a can of curry sauce, and we have a great dinner. In all it takes 8.5 minutes to make. It saves us on after tax earnings at least $30 per meal (dinner out for four = $50 - cost of groceries $10 - my time {8.5 min * $80 per hour } $11.34. Your equation may not work out the same, but I would bet if you did the math, you'd still be saving your family money.