Economic planet | Work like an American

The U.S. economy is on track to achieve a perfect landing after weathering pandemic turbulence. It was largely the performance of the United States that led the OECD to raise its forecasts for global economic growth from 2.9% to 3.1% for 2024 last week.

The United States has an economy that is the envy of even and perhaps especially among other so-called rich countries. This is true now, and has been true for a long time. Do the Americans have a recipe? What do they do better than others? They work more, the head of Norway’s multi-billion sovereign wealth fund recently said in an interview with Financial Times.

This is certainly a factor that explains why the United States is a champion of innovation and technological progress, according to Nicolai Tangen, who manages a formidable asset of US 1.6 trillion made up of Norway’s oil revenues. The fund invests all over the world, but over the years it has increased its investments in the US market. Currently, almost half of all investments by Norges Bank Investment Management – ​​the official name of the fund – are in the United States.

The figures tend to prove him right. Americans work more than Europeans, according to statistics from the Organization for Economic Cooperation and Development (OECD). To what extent? The difference is 15% between the hours worked annually in the United States and the hours worked in European Union countries. Americans work half an hour more per day than the French and Germans, for example.

In the United States, we also work more than in Canada, according to the same source which calculates the total number of hours worked divided by the average number of people with a job. Days off and vacations are excluded.

Data from the Quebec Statistics Institute show that Quebecers work less than the Canadian average and less than Ontarians. Lucien Bouchard highlighted this in 2006 in a famous statement, and it is still true today.

In a week, the Canadian worker works on average 35.5 hours, compared to 35.7 hours for the Ontario worker and 34.4 hours for the Quebec worker.

If it were enough to lengthen the work week a little to reduce the wealth gap between Quebec and Ontario, it would be simple. But it’s more complicated than that.

The people who work the most in the world are not the richest. This is the case of Mexico and Greece, for example, where the number of hours worked per year is among the highest in the world.

Likewise, Germany, Europe’s largest economy, is the country where people work the fewest hours. Less than in France, less than in the United Kingdom and less than in Sweden.

What can we conclude from this? That the number of hours worked in a year explains neither the success nor the wealth of a country.

There are other ingredients in the recipe, starting with geography and the resources a country is endowed with, which can tip the scales between wealth and poverty. We can add many other factors that are more difficult to measure, such as regulations or the level of taxes.

The head of the Norwegian fund also mentioned one of these intangible ingredients which explains the performance of the American economy: ambition. “We are not very ambitious,” he said of Europeans in general.

The performance of the American economy in recent years has contributed to the very good returns on his investments, including that of 16.1% recorded in 2023. But we can bet that his boss will not move to the United States. He probably prefers to live in Norway.