Germany's minimum wage spurred productivity, but hit small firms

The measure has helped boost productivity and reduce pay gaps since it was first rolled out across Germany five years ago, according to a study. But it has also forced some small companies to close down.

DW, 18 February 2020

Person doing dishes (picture-alliance/dpa/P. Seeger)

The introduction of a nationwide minimum wage in Germany has spurred a growth in worker productivity, according to a study published Tuesday.

The government in Berlin first established a minimum wage in 2015, requiring firms to pay their employees €8.50 ($9.20) per hour. At the time, around 15% of the German workforce was earning less than that amount.

Research by University College London (UCL) and the German Institute for Labor Market Research (AIB) found that the change did not result in higher joblessness among low-wage workers — one of the fears before the policy was rolled out.

"Contrary to concerns that marked the debate before the national minimum wage was introduced, we did not find that it led to a reduction in employment," UCL researcher Christian Dustmann said in a statement.

Instead, their analysis showed that lower-paid employees moved to bigger firms, where more full-time jobs requiring better qualifications were on offer.

"The minimum wage increased productivity by redistributing workers from less productive to more productive companies," Dustmann said. The average size of companies grew, as did the average number of workers at bigger firms.

Read more: EU launches 'fair minimum wage' initiative

Smaller businesses exit the market

The nationwide standard helped decrease pay gaps across regions, the study found. However, it also forced the closure of some small businesses — those with three or fewer staff — in areas that had the lowest pre-2015 average pay.

Since 2015, the minimum wage has grown from €8.50 to €9.35, and is set to be revised again next year.

It was introduced at a time when the German economy was enjoying a long period of growth, with unemployment at its lowest level in 25 years. Dustmann warned that for that reason the study's findings "do not necessarily generalize to other labor markets, or other time periods."

Italians sign up for populists' 'citizen's income'

Yahoo – AFP, Franck IOVENE, March 6, 2019

The "citizen's income" was a flagship measure of the anti-establishment Five Star
Movement (M5S) (AFP Photo/Tiziana FABI)

Rome (AFP) - Italians queued Wednesday to sign up for the "citizen's income", a 780-euro (880-dollar) monthly payment that was a key promise of the populist government aimed at ending poverty for millions.

"If it works, then it's a good idea... we hope in any case," said pensioner Paolo Scaglione, who had come to drop off the application for his daughter, a single mother.

"There are many who will try to get it, we must see what will happen after, if it will solve something," he said, one of thousands applying at Italian post offices and tax assistance centres (CAF).

The "citizen's income" was a flagship measure of the anti-establishment Five Star Movement (M5S) when it won elections last year, forming a government in June along with the anti-immigrant Lega.

It is aimed at the more than five million Italians and long-term foreign residents living below the poverty line, hoping to get them jobs and to stimulate badly needed economic growth.

"We heard on the news that the CAF would first see people whose surnames begin with an A or B, to avoid chaos," said Mariela Pinzon, an Italian resident of Colombian origin.

"My name starts with a P so I might have to come back," said Pinzon, one of the first in when the doors opened on Wednesday morning.

"If it works as we were promised it would, then really yes, it's an excellent system," said Pinzon, the unemployed mother of a teenaged girl.

Despite fears that officials would be overwhelmed by hordes of people seeking the payments, Italian television said queues were reasonable throughout the country.

"We were expecting more people, we were expecting a little more, but one has to prepare documents to make this request, and not all of them have yet," said CAF employee Elisabeth Micolano.

18 months

The first payments will be made around the end of April or early May, a few weeks before European parliamentary elections, and the programme will cost a whopping 6.6 billion euros.

Crucially, applicants cannot turn down more than two job offers, the second of which could be 250 kilometres (155 miles) from home. The third offer could be anywhere in the country.

"If they give you a job then people obviously have to accept the work offered, it shouldn't encourage people to do nothing," said pensioner Scaglione.

The payments can be made for up to 18 months and are renewable after a month.

Successful applicants must have been in Italy for at least two years for Italians and 10 years for foreigners.

"Some foreigners have little income, for example I have four children, and a very low income, and I pay rent," said Ruwena, an Italian resident of Filipino origin who moved here in 1992.

"So I think there will be a lot of foreigners who will ask, and not only foreigners, Italians too."

The measure will help around 1.3 million Italian families, according to the Italian statistics institute Istat, including many in the more impoverished south of the country.

On average, poor families will end up receiving around 5,000 euros extra a year.

The money will be paid into bank accounts which can be accessed using a special debit card, initially only to buy food in certain shops.

In future, the cards can be used to pay for clothes or other necessities. Any money left at the end of the month goes back to the state.

No new jobs but happier citizens in Finland's basic income test

Yahoo – AFP, Sam KINGSLEY, 8 February 2019

It didn't generate any jobs, but Finland's universal basic income experiment still
yielded valuable insights

A groundbreaking trial providing a guaranteed basic monthly income to 2,000 jobless people has led to improved wellbeing but failed to boost employment, Finnish authorities announced on Friday.

Last December the Nordic nation concluded a two-year experiment in which a randomly selected group of unemployed people were paid an unconditional, tax-free 560 euros ($634) a month.

Researchers studied whether the no-strings-attached income could better incentivise jobless people to find work than traditional unemployment benefits, which may be docked as soon as the recipient starts earning money.

Although the widest such study to be conducted in recent years in Europe, the Finnish trial was limited to participants who were already unemployed.

Proponents of a true "universal income" call for a monthly payent, sometimes described as a citizens' wage, to be given to everyone regardless of their wealth, family or work situation.

Nevertheless Finnish researchers believe their findings provide important insights for reforming the country's system of welfare payments.

"The recipients of a basic income had less stress symptoms as well as less difficulties to concentrate and less health problems than the control group," Minna Ylikanno, lead researcher at Finland's welfare authority Kela, said in a statement.

"They were also more confident in their future and in their ability to influence societal issues," she added.

Results at this stage are preliminary and relate only to the first year of the study, meaning Friday's findings are far from conclusive.

But a hoped-for stiumulus to levels of employment has not yet materialised, the project's researchers said.

"The recipients of a basic income were no better or worse than the control group at finding employment in the open labour market", Ohto Kanninen, research coordinator at the Labour Institute for Economic Research, said in a statement.

Finland's social affairs minister, Pirkko Mattila, conceded on Friday that the government has no plans to roll out the scheme across the whole country.

"Even though the basic income model developed for the experiment is not likely to be adopted as such for more extensive use, I think the experiment was very successful," Mattila said in a statement.

"We can use the data from the experiment to redesign our social security system; that is going to be the next major reform.”

Similar schemes have been trialled in Canada and Kenya.

The experiment has not been without its detractors. Finnish trade unions have called instead for employers to pay living wages that do not need to be subsidised by benefits.

The Paris-based Organisation for Economic Cooperation and Development (OECD) has claimed that a basic income programme in Finland would not be economically viable and could leave significant numbers of people in worse poverty than now.

In 2017, Swiss voters rejected a proposed universal income in a referendum after critics slammed the idea as rewarding the lazy and the feckless.

Unemployment levels in selected countries of the European Union in June 2018 (as % of the active population)

Unemployment levels in selected countries of the European Union in June 2018 (as % of the active population) #EUunemployment pic.twitter.com/HPeAvNWgs7

— AFP news agency (@AFP) July 31, 2018

Dutch welcome EU deal on social dumping: ‘what a ride!’, says minister

DutchNews, October 24, 2017

Lodewijk Asscher. Photo: regering.nl

Outgoing social affairs minister Lodewijk Asscher has welcomed a decision by EU ministers to stamp out social dumping on the European labour market, which has been a key part of his European efforts. 

The deal to reform the 1996 directive on posted workers means that companies will no longer be able to employ workers from other parts of the EU for lower wages for longer than 12 months. Posted workers will also be given the same holiday and other rights. 

Asscher took to Twitter to welcome the deal. ‘From ‘Code Oranje’ in 2013 when the commission branded me a xenophobe to this moment. What a ride,’ he said, referring to a controversial article he wrote about the impact of free moment on the labour markets four years ago. 

The issue of equal pay for equal work has divided the EU. Western member states back a change to stop their workers being undercut while Eastern countries want to maintain their competitive edge – due to their cheaper labour force. 

Monday’s agreement took almost 12 hours of talks and compromises and reaffirms the principle of ‘the same pay for the same work in the same place’. It will come into effect in 2021. 

However, the deal will not apply to the transport sector – one of the main areas of dispute – until a separate agreement has been reached.

Gelijk loon in plaats van minimumloon

— Lodewijk Asscher (@LodewijkA) October 23, 2017

France's Macron enacts contested labour reforms

Yahoo – AFP, Gina DOGGETT, 22 September 2017

France's Macron enacts his contested labour reforms

Paris (AFP) - President Emmanuel Macron on Friday signed sweeping changes to France's complex labour code into law, ramming through a landmark reform four months into his administration despite protests from hardline unions.

"The reform... constitutes an unprecedented transformation of our social model (and) the economic functioning of our country," the 39-year-old Macron said, adding that it had been "carried out in record time".

The measures are designed to give employers more flexibility to negotiate pay and conditions with their workers while making it easier and less costly to shed staff.

Macron signed the reform, contained in five executive orders, seated at his desk in the Elysee Palace before television cameras in a US-inspired novelty for a French president.

The overhaul, eagerly awaited by the business community and France's EU partners, was fast-tracked via executive orders as a way of avoiding a prolonged debate in parliament.

The measures chip into worker protections that have long been sacrosanct in France, frustrating reform-minded governments whether on the left or the right.

But Macron insisted Friday that the reform contained "new rights and new protections", such as a provision for higher payouts to workers made redundant.

'Watch out, Macron!'

Three months of negotiations with union leaders produced a split between those willing to compromise -- the CFDT and FO -- and those determined to fight the reforms, led by the largest and most militant union, the CGT.

But the resistance has been weaker than that faced by Macron's Socialist predecessor Francois Hollande over his more limited changes to the labour code, which sparked a wave of sometimes violent protests last year.

On Thursday, some 132,000 people demonstrated across France, just over half the numbers who took part last week in the first major protests to challenge Macron since his election in May.

The CGT has vowed to continue to combat his reforms, while radical left leader Jean-Luc Melenchon wants to get tens of thousands into the streets on Saturday.

Melenchon, the head of the France Unbowed party, has led opposition to the measures, occupying ground vacated by the traditional left and right parties, which have been eclipsed by Macron's centrist Republic on the Move.

But the reform comes as the former investment banker's approval ratings plunge, with recent polls showing that only around 40 percent of French voters are satisfied with his performance.

Protesters have seized upon his recent criticism of opponents to the labour market changes as "slackers", with slogans such as "Watch out, Macron, the slackers are in the street".

France's 'pharaoh'?

CGT leader Philippe Martinez warned Macron: "When you are president, you should show humility rather than strutting about."

Philippe Braud, professor emeritus at Paris's Sciences Po university, said he believed popularity was not a concern for Macron.

"He knows he won't be defeated in the street," Braud told AFP.

Macron insists that his signature reform offers the best cure to France's stubbornly high unemployment rate, which stands at 9.6 percent, roughly twice the levels in Britain or Germany.

"The reform offers pragmatic solutions for very small companies and small and medium-sized businesses... which create the most jobs today," he said Friday.

Public opinion is divided, according to a recent BVA poll, with most respondents saying they think the reform will boost France's competitiveness but fail to improve employees' working conditions.

Critics say the use of executive orders -- which kept parliamentary debate over the proposals to a minimum -- bolster perceptions of Macron as a monarchical or even "pharaonic" leader.

But Macron insists he has a mandate for change after his presidential win in May and his party's thumping parliamentary victory in June.

"Democracy does not happen in the street," Macron said in New York on Wednesday in another broadside at the protesters.

The reform will enter the statute books on Monday, though a few changes, including a measure to streamline workers' committees, will not take effect until the end of the year.

French parliament approves Macron's labour reform drive

Yahoo – AFP, Charlotte HILL and Clare BYRNE, August 2, 2017

French President Emmanuel Macron wants to give employers more power to
negotiate conditions with workers at the company level rather than being bound
by industry-wide agreements (AFP Photo/CHARLY TRIBALLEAU)

Paris (AFP) - France's parliament on Wednesday adopted a bill allowing the government to fast-track changes to the labour code, the first major reform of Emmanuel Macron's presidency which aims to slash unemployment.

After weeks of at times heated debate between lawmakers, the Senate approved a bill allowing the government to loosen the labour laws after negotiations with unions and employers' groups.

Liberalising France's labour market -- long a demand of its eurozone partners led by Germany -- was one of the central planks of the centrist Macron's election manifesto.

The upper house Senate adopted the final version of the text by 225 votes to 109, completing its adoption.

Former investment banker Macron wants to give employers more power to negotiate conditions with workers at the company level rather than being bound by industry-wide agreements.

France's 39-year-old leader also wants to cap the compensation awarded by courts in dismissal cases.

Employers cite the current lack of visibility on the amount of damages awarded by courts as a disincentive to hiring.

With nearly 3.5 million people out of work, Macron has made job creation his top priority, pledging to cut unemployment from a projected 9.4 percent this year to 7 percent by 2022.

The government says the labour reforms, which have been the subject of several rounds of negotiations with employers and trade unions, will benefit both bosses and workers.

While companies will, for instance, find it easier to lay off staff during a downturn, jobless workers will receive higher payouts.

The reforms also aim to streamline negotiating channels within companies, by fusing the plethora of workers' committees dealing with everything from working hours to health and safety into a single body.

The bill easily passed the National Assembly, or lower house, where Macron's Republic on the Move (REM) party has a large majority.

The stiffest resistance came from the leftist France Unbowed, which accused the ruling party's novice lawmakers of being presidential "stooges" for waving through a bill they said would unravel decades of social gains.

Political minefield

Successive French governments have attempted to reform France's labour laws, without much success.

Ex-president Francois Hollande's Socialist government sparked months of at times violent protests by pushing through a labour bill last year that was far more timid than that of Macron.

Macron immediately got down to negotiations with union leaders to try to avoid a similar debacle.

Despite his attempts to disarm them, some unions leaders are already calling for demonstrations.

The hardline CGT union has called for countrywide strikes and protests on September 12.

Employers, by contrast, have welcomed the imminent changes, which will be implemented by means of executive orders in September.

"France must become as attractive as its neighbours," the head of the Medef employers' federation, Pierre Gattaz, said last week, calling the overhaul "absolutely essential for the country."

European court tears up pre-pack bankruptcy deal, backs workers

DutchNews, June 22, 2017

The European Court of Justice on Thursday ruled in favour of four daycare workers sacked in a pre-packed bankruptcy deal. 

The case was brought by the FNV trade union representing the four who lost their jobs when daycare group Estro went bust in 2014 and restarted immediately as Smallsteps. In total, 1,000 of the 3,800 members of staff lost their jobs. 

A pre-pack deal allows companies to restructure and prepare a restart as part of the bankruptcy process but has been condemned for leaving staff and suppliers in the lurch. Unions say it is often used by companies as a way to force through a reorganisation. 

The court, which had been asked to rule on the situation by a lower Dutch court, said that workers involved in a pre-pack bankruptcy should keep the same rights as in a normal takeover. In the pre-pack set-up they often end up with worse pay and conditions and only a small financial settlement if made redundant. 

Claim

The court ruling means all Estro staff are officially employed by Smallsteps because ‘European law takes precedence’ labour law professor Evert Verhulp told news agency ANP.

 ‘However, to claim back pay, they should have made it clear that they wanted to continue in their jobs. That does apply to the four who went to court. The others will be able to apply for a golden handshake but it is unclear if Smallsteps will be able to pay.’ 

Other companies which have used the pre-pack bankruptcy construction include McGregor, prawn processor Heiploeg, travel agency Neckermann, lingerie retailer Marlies Dekker and the Free Record Shop.

‘This ruling means that the pre-pack is no longer an attractive way to reorganise and get rid of staff and secondary benefits cheaply,’ FNV deputy chairman Kitty Jong said in a statement. ‘Up to today, workers had no rights if a company went bust.’

Dutch call for action on EU-wide ‘equal pay for equal work’

DutchNews.nl, June 19, 2015

The Netherlands is one of seven EU countries to write to the European Commission urging new measures to stop people posted to work in another country from being underpaid and otherwise exploited. 

The letter to employment commissioner Marianne Thyssen has also been signed by Germany, France, Austria, Sweden, Belgium and Luxemburg and calls on Brussels to ensure everyone is entitled to ‘equal pay, for equal work in the same place’. 

Dutch social affairs minister Lodewijk Asscher told the Volkskrant eastern European countries are also adding their support to the campaign. ‘They think it is terrible their people are being exploited here or are looked down on,’ Asscher told the paper.

In particular, the signatories want changes to the current regulations on foreign postings, which have created an entire industry based on lower wage expectations and undermining existing pay deals.

‘The abuse of these guidelines… is undermining support for the European ideal,’ the minister said. 

Foreign workers who come to the Netherlands for temporary assignments should be entitled to the same pay and conditions as Dutch workers but this is not always the case, Asscher said. ‘A foreign worker with 10 years’ experience is paid as if he is a starter. That is twisted.’ 

Asscher has repeatedly warned that more needs to be done to stop a ‘race to the bottom’ in terms of ensuring equal pay within the European union. 

Read the letter (English)

Related Article:

Union takes transport firm to court in support of Romanian drivers

European patent office under fire over ‘reign of terror’

DutchNews.nl, March 22, 2015

Photo: Yurtsevich Dzmitry Wikimedia
Commons

The European patent office in Rijswijk came under fire in the Dutch media this weekend after claims the management operate a reign of terror. 

The Volkskrant said on Saturday that many staff have psychological problems. 

‘The pressure of work has gone up enormously and colleagues are becoming desperate,’ one source told the Volkskrant. The organisation has become a bastion of fear, the source said. 

The low point came in 2013when a young colleague killed himself while at work, the source said. There has never been an investigation into the death but other workers suspect the unreasonable pressure played a part. 

The organisation has refused to allow the labour inspectorate to look into working conditions at the EU institution and its president Benoît Battistelli told the NRC the inspectors have ‘no reason to intervene’. 

The paper says Battistelli has invoked the immunity offered to international organisations to avoid an investigation into the suicide. There have also been two suicides among patent office staff in Germany, the NRC says. 

Since then, trade union SUEPO and the personnel committee have been pressing for an independent inquiry. It says workers are being pressured by production targets. 

One worker who tried to gauge the feelings of the institution’s staff was sacked by sending an email to the entire international workforce of 2,700 people was sacked on the spot, the Volkskrant said. 

Dutch law 

Dutch labour inspectors are unable to take any action because the patent office does not fall under Dutch law. 

After talks with the foreign affairs ministry, the inspectors have referred staff to the International Labour Organisation, documents in the possession of the NRC show. 

In a reaction, Battistelli told the paper the suicides are personal tragedies which should not be used strategically against the management. There is no evidence of a connection between the suicide and the patent office, he said.

Qatar 'won't host 2022 World Cup' says FIFA's Zwanziger

Yahoo – AFP, 22 Sep 2014

A computer generated image shows the stadium to be built in Al-Wakrah for the

Qatar 2022 World Cup (AFP Photo)

Berlin (AFP) - Qatar will not host the World Cup in 2022, according to Theo Zwanziger, the German member on the executive committee of world football's governing body FIFA.

"I think that at the end of the day the 2022 World Cup will not take place in Qatar," Zwanziger said in an interview with Sport Bild Plus.

The former head of the German football federation (DFB) cited high summer temperatures as the reason Qatar would lose the right to host football's global showpiece.

Migrant labourers work on a construction site

 on October 3, 2013 in Doha in Qatar (AFP

Photo/Karim Jaafar)

"As Mr Zwanziger himself says, it's his personal opinion," a FIFA spokesman responded to AFP subsidiary SID when asked about the German's statement.

Zwanziger said: "Doctors say, and I had insisted on this point in the protocol, that they cannot guarantee that a World Cup can be held in summer in these conditions."

While Qatar has reportedly developed stadium cooling systems, Zwanziger said "the World Cup involves not only stadiums. There are fans coming from the four corners of the world who will be concerned by the heat".

"The first incident putting a life in danger will be subject to an investigation. And that, nobody in the FIFA Executive Committee would want to reply to."

But in an interview with Die Welt newspaper, Hassan al-Thawadi, secretary-general of the Qatar 2022 organising committee, declared himself "sure that the 2022 World Cup would take place in Qatar".

"No, I'm not worried," he said. "Firstly because there's no basis to lose the World Cup.

"And secondly because it's the first World Cup in the Middle East.

"When people think of this region, it's rather in terms of conflict. The World Cup will be an occasion to unite peoples. It will leave a positive heritage."

Controversy has plagued FIFA's awarding of the World Cup to Qatar in 2010, with summer temperatures in the Gulf emirate reaching the upper-40s Celsius.

A Qatari youth holds a mock World Cup trophy during celebrations in Doha on

 December 3, 2010 a day after the world football's governing body FIFA announced

that the tiny Gulf state will host the 2022 World Cup (AFP Photo/Marwan Naamani)

The idea of switching the World Cup to cooler winter months does not sit comfortably with all officials of Europe's big leagues.

Gas-rich Qatar has also come under the spotlight over foreign workers' rights as well as accusations that corruption played a part in winning the right to host the World Cup.

Britain's Sunday Times newspaper has alleged that former Qatari football boss Mohamed Bin Hammam paid more than $5 million (3.7m euros) to gain support for the emirate ahead of the vote.

Qatar has strongly denied the allegations.

FIFA's ethic committee is to announce in early 2015 the results of its investigation into the attribution of not only the 2022 World Cup to Qatar, but also the 2018 edition to Russia.

Emir assures Merkel: Qatar has never supported 'IS' militants

At a meeting in Germany, Qatar's emir has told Chancellor Angela Merkel his country does not provide financial support to Islamist militants. The leaders also discussed the Gulf state's human rights record.

Deutsche Welle, 17 Sep 2014

Sheikh Tamim bin Hamad Al Thani made the assurances on Wednesday during meetings with Chancellor Merkel and President Joachim Gauck in Berlin.

"What is happening in Iraq and Syria is extremism and such organizations are partly financed from abroad," the emir said at a news conference in the German capital.

"But Qatar has never supported and will never support terrorist organizations," he said.

Qatar has previously been accused of providing financial backing to extremist groups, including al Qaeda and Islamic State (IS) in Iraq and Syria. Qatar has also come under pressure from its neighbors in the region for supporting the Islamist Muslim Brotherhood in Egypt, the Palestinian Hamas, and Islamist groups in Libya.

Following Wednesday's meeting, Merkel told reporters the emir had reassured her "the fight against IS is as much the task of Qatar as it is of other countries." She added that she had "no reason" not to believe what the emir said. "There is a broad commonality that we can not accept this kind of intolerance and brutality."

The chancellor also pointed out that Qatar had also pledged its support to the US-launched alliance formed to combat IS fighters.

The terror group has made significant territorial gains in parts of Iraq and Syria in recent months, prompting US President Barack Obama to launch a new strategy - including airstrikes - to "degrade and destroy" the militants.

Human rights concerns

In her meeting with the emir, Merkel said she had also raised concerns about human rights and conditions for foreign workers in Qatar.

The country is preparing to host the FIFA World Cup in 2022, but has faced criticism after reports dozens of workers from India and Nepal had died on stadium construction sites. Some labor rights groups have argued for Qatar to be stripped of its hosting responsibilities.

"We do not say: We are the ideal state, which does not make mistakes," the emir said, and added that the government was working to address the problem.

Economic ties

Economic cooperation and investment were also on the agenda at the talks, with Merkel saying the resource-rich country was an important partner for the European Union, and that Germany had a lot to offer in the way of environmental technology and infrastructure.

"We are pleased about every Qatari investment," the chancellor said, praising the Gulf state's decision to buy shares in German companies, including Volkswagen, construction giant Hochtief, Siemens and Deutsche Bank.

At 34, the emir is the youngest head of state in the Arab world. He took over the position from his father, Hamad bin Khalifa Al Thani, who increased Qatar's economic output sevenfold during his reign from 1995 to 2013.

nm/glb (Reuters, dpa, AFP)

Related Article:

Qatar-Gulf deal forces expulsion of Muslim Brotherhood leaders

Swedes test a future of less work, more play

Yahoo – AFP, Peter Harmsen, 29 May 2014

Robert Nilsson, a mechanic with Toyota in the Swedish city of Gothenburg,

 prepares a part of a rear window to be attached to a Toyota Prius car on May 8,

2014 (AFP Photo/Peter Harmsen)

Gothenburg (Sweden) (AFP) - Robert Nilsson, a 25-year-old mechanic in Sweden's second city Gothenburg, may be the harbinger of a future where people work less and still enjoy a high standard of living.

He gets out of bed at the same time as everyone else, but instead of rushing to work, he takes it easy, goes for a jog, enjoys his breakfast, and doesn't arrive at his Toyota workshop until noon, only to punch out again at 6:00 pm.

"My friends hate me. Most of them think because I work six hours, I shouldn't be paid for eight," Nilsson said, talking while fitting part of a rear window onto a Toyota Prius with swift, expert moves.

A woman smells cherry trees in full

 blossom at Kungstradgarden in central

 Stockholm on April 17, 2014 (AFP

Photo/Jonathan Nackstrand)

Sweden often stuns first-time visitors with its laid-back prosperity, making foreigners wonder how it is possible to have both lots of money and lots of leisure.

Part of the answer, according to economists, is a productive and well-educated workforce that adapts to new technologies quicker than most.

Exactly how much –- or how little –- Swedes work compared with other nations is a somewhat open question.

"We have a 40-hour work week, but also we have a little more absence than many people and we start work late in life because we study longer," said Malin Sahlen, an analyst at Timbro, a libertarian Stockholm-based think tank.

In 2012, the average Swede worked a total of 1,621 hours, according to the Paris-based Organisation for Economic Co-operation and Development.

This is more than the Netherlands with 1,381 hours, but less than Britain with 1,654 hours or the United States with 1,790 hours – and way below Chile's 2,029 and Mexico's 2,226 hours.

"We could work more, that's a fact," said Sahlen.

Less is more

But far from looking to increase time spent at work, some in Sweden are out to prove that less is more and that cutting hours can boost productivity.

In an international productivity ranking by the Conference Board, a non-profit business research organisation, Sweden was already placed close to the top, coming 11th out of 61 countries.

The United States was third, the Netherlands number five, and Britain number 13, whereas Chile and Mexico were both in the bottom third.

Now, the Social Democrat-led city government in Gothenburg is planning to test the impact of shorter hours on productivity, in an experiment beginning on July 1.

One group of government workers in the elderly care sector are to work six hours a day, while another will work the eight they are used to.

After a year, the municipal government will analyse the results and decide whether the six-hour day brings enough savings -- in the form of fewer sick days for instance -- that it warrants becoming permanent and extended to other sectors.

So far, the plan is limited to the civil service, but city councillor Mats Pilhem of the Left Party is convinced that all of Sweden is headed towards a shorter work day.

"People have long work lives, and it's necessary to think of ways to create a more humane environment for them in the workplace," he said.

'Crazy idea'

Critics like Timbro's Sahlen warn the math does not add up in terms of the wider economy, saying it would be far too expensive to make a large part of the labour force work 25 percent less -- for the same pay.

"I think it's a crazy idea and I don't think it's going to be reality either," she said.

Opponents say shorter workweeks have been experimented across Europe -- 35 hours in France and Germany, an average of 30 hours in the Netherlands -- to mixed economic results.

"It's the kind of populist and socialist policy that's very dangerous for the economy, and we shouldn't go through with it," warned Maria Ryden, a member of Gothenburg city council for the centre-right Moderates, which oppose the plans.

"We're capable of working more."

Swedes relax at the Tyresö Castle,

south-east of Stockholm on June 22,

2007 (AFP Photo/Sven Nackstrand)

But proponents of cutting the workday point at short term benefits in the form of fewer sick days, and greater efficiency at work due to fewer breaks.

And they argue greater savings will come in the long run, with a workforce that is less exhausted and therefore more productive as it approaches retirement.

'Saw the results'

Left-wing councillor Pilhem says the concept has already proven its merits -- at mechanic Nilsson's workplace, Toyota.

Toyota's Gothenburg branch introduced the six-hour day in 2002 to make its facilities more efficient by having two shifts, one in the morning and one in the afternoon, instead of a single, longer one.

Nilsson confirms that in his experience a six-hour day -- paid as much as eight -- is more efficient because it requires fewer breaks.

"Every time you have a break, it takes 10 to 15 minutes to get back to work, because you have to see where you were when you left off," he said.

That efficiency is reflected in the salary, as the Toyota workshop pays technicians like Nilsson 29,700 Swedish kronor (3,300 euro, $4,510) a month, well above the 25,100 kronor (2,790 euro, $3,810) national average for workers in the private sector.

"It was a huge success straight away," said Toyota service centre manager Elisabeth Jonsson.

"We saw the results, and everything was working for the staff, for the company, for the customers, so I don't think we ever had any discussion about putting an end to it."