For Greece has not – as is often claimed or implied – lagged behind Germany in raising productivity: on the contrary hourly labour productivity increased more than twice as fast in Greece than Germany during the ten years of the euro since 1999. Nor do frequent claims in the media of Greek ‘laziness’ stand up to scrutiny: average annual working hours are the longest in Europe (and hundreds of hours per year longer than in Germany!). The problem has been with nominal wage and price setting.
Due to strong differences in wage setting, Greek nominal unit labour costs increased by more than 30% since the start of EMU – and the increases in Italy, Spain, Portugal and Ireland were even higher – whereas in Germany they rose by just 8%.
Can someone help me out with what I\’m missing?
How can Greek labour productivity have increased twice as fast as that in Germany if nominal (and they do use the same currency) unit labour costs have gone up in Greece some three times the rise in Germany?
Aren\’t these really the same thing? Attempts to measure relative labour productivity and the changes in it? So how can one be pointing one way and the other another?