"Americans have a hard time learning
from foreign experience. Our size and the role of English as an international
language (which reduces our incentive to learn other tongues) conspire to make
us oblivious to alternative ways of living and the possibilities of change.
Our insularity may be especially
damaging when it comes to countries with whom we have a lot in common. Western
Europe is our technological equal; labor productivity
in northern Europe is just a little below productivity here. But Europe’s
policies and institutions are very unlike ours, and we could learn a lot by
looking at how those differences have played out. Unfortunately, any suggestion
that Europe does something we might want to emulate tends to be shouted down
with cries of “socialism.”
Which brings me to an
under-discussed aspect of the current economic scene: Europe’s comparative
success in getting workers idled by the pandemic back into the labor force.
You’re probably aware that the United
States is experiencing what many call the Great Resignation — a significant
fall in the number of people willing to accept jobs, at least at pre-Covid
wages. Four million fewer
Americans are employed than were on the eve of the pandemic, yet the rate at
which workers are quitting their jobs
— usually a good indicator of labor market tightness — has hit a record, and
the scramble of employers to find workers has led to rapid wage increases.
Earlier this year many Republicans insisted that labor was scarce
because generous unemployment benefits were discouraging workers from accepting
jobs. However, those enhanced benefits went away with no visible effect
on participation in the labor
force. So what is going on?
Well, a comparison with Europe may
shed some light on the subject. For the Great Resignation, it turns out, is
largely an American phenomenon. European nations have been much more successful
than we have at getting people back to work. In France, in particular, employment
and labor force participation are now well above prepandemic levels. What
explains this difference?
Part of the answer may involve older
workers. In the United States, the decline in the labor force has been
especially steep among adults over 55, many of whom
haven’t come back after pandemic layoffs. This may have been less of a factor
in France, where workers tend to retire earlier
than their U.S. counterparts. However, older adults in some European nations,
like Denmark, are actually more likely to be employed than their U.S.
counterparts; yet Denmark has also avoided a Great Resignation.
Another answer may lie in
trans-Atlantic differences in how we approached Covid relief. While the United
States made some effort to help businesses stay afloat and retain their labor
forces, mainly we helped displaced workers through enhanced unemployment
benefits. Europe, on the other hand, mainly relied on job retention schemes
— government aid intended to keep people on employer payrolls even if they
weren’t working at the moment.
The problems with the U.S. approach
are now becoming apparent. As I said, there’s no evidence that unemployment
insurance has been significantly discouraging work. But where European labor
support helped keep workers linked to their old jobs, facilitating a rapid
return, U.S. policy allowed many of those links to be severed, making an
employment recovery harder.
Finally, let me offer a speculative
hypothesis: Perhaps one reason Europeans aren’t engaging in an American-style
Great Resignation is that they don’t hate their jobs quite as much.
Anecdotally, one factor behind
Americans’ unwillingness to return to their old jobs is that enforced idleness
during the pandemic gave many people a chance to reconsider their life choices
— and a significant number may have realized that low-paying jobs with
lousy working conditions weren’t worth having.
Of course, Europe is by no means a
worker’s paradise. But some jobs that are grueling and poorly paid here are
less awful on the other side of the Atlantic. Famously, in Denmark McDonald’s pays
more than $20 an hour and offers six weeks of paid vacation each year. That may
be an exceptional case, but the U.S. does stand out among wealthy countries for
having a low minimum wage,
for offering very little vacation time and
for failing to offer parental and sick leave. Maybe
the poor quality of U.S. jobs is one reason so many American workers are
reluctant to return.
U.S. elite opinion, especially but
not only on the right, has long assumed that making jobs better would backfire,
because higher labor costs would reduce employment. But European experience
says otherwise. Even before the pandemic, many European countries were doing
pretty well at job creation;
France, for example, has
consistently had higher employment rates among prime-age adults than the United
States.
And now, in the aftermath of a
nightmarish disruption to working life, pro-worker policies also seem to be
helping European economies achieve faster employment recovery than we’re
managing here. Are we sure we have nothing to learn from their experience?"
In Lithuania, the number of vacancies and the level of vacancies is consistently growing throughout the period of 2021. The same problem as in America - it is the Great Resignation. Its reasons in Lithuania are also the same as in America, only our vacations are all better than the Americans. Unfortunately, vacations are no longer enough, we need both good work and decent wages. We don't have that.