The Wages of Prosperity

While U.S. employers have reason to complain about soaring labor costs, the fact is that wages have been rising much faster in other major nations, notably those of Western Europe. Between the 1958 start of the Common Market and 1965, U.S. workers' pretax wages went up 14%. During that seven-year period, pretax wages jumped 25% in Italy, 29% in France, 40% in Denmark, 41% in The Netherlands, and 53% in West Germany.

To be sure, European workers, having started lower, still have a lot of catching up to do. The average American factory hand collects $108 a week before taxes. By contrast, the British auto worker last year had a pretax income of $63 a week, the German $55, the French $43. But income figures are only part of the equation. When living costs, government services, and the many immeasurable fringe benefits are added in, the balance -- while still favoring the American worker -- is distinctly less lopsided. The fringes, for example, account for 20% to 25% of the U.S.

worker's earnings, but up to 55% of the European's.

Even Bike Money. French industry shuts down almost completely during August, giving workers four weeks' vacation, and in almost every other European country workers get at least three weeks away from the job. German companies provide their vacationing employees with extra pocket money, as much as 30% of regular pay, while Italian firms run vacation facilities specifically for employees. The average American must work for a company for ten years before getting three weeks, gets only one week during his first three years, and has never heard of extra vacation money or company resorts.

In Europe nearly everyone gets a bonus to compensate him for the added costs of a wife, a child, a dependent parent, or unpleasant working conditions. Italians are paid $8.40 a month extra for each child, also collect supplements if they work at an open-hearth furnace, at a high altitude, or in an old malarial zone, though malaria has seldom struck since Mussolirii drained the swamps. The Belgians get extras to cover the cost of commuting by train, and the hardy Dutch, who cycle to work, are given "bike money."

At Christmas, Continental workers commonly collect a bonus of one, two or even three months' pay.

The Lure. Many economists warn that the fast wage pace must be slowed if European prosperity is not to be seriously undermined by inflation. Europe, nonetheless, has made the same transition to a worker-boosted consumer economy that the U.S. made in the years that followed the wars. And the surge in consumer buying power has been a main lure to American companies investing abroad.

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