German trend for working less is no longer paying off

Germans’ contentment soared during the chancellorship of Angela Merkel, a time while the economy grew even as the population worked fewer hours, a long-term study has found.
However, that contentment peaked in 2020 and has since been hit by the pandemic, the onset of war in Russia, a cost of living crisis, high inflation and the end of cheap energy.
Merkel, 70, was in power for 15 years from 2005 and oversaw a transformation: by the end of her tenure the nation’s average annual growth had tripled, compared with the four years before her inauguration. Tax revenues were up and unemployment down by more than half.
The population’s “life satisfaction” also grew markedly during this time, according to a study published by the German Institute for Economic Research on Wednesday.
Asked to rate their contentment out of ten, in 2004 the average German answered 6.7, but by 2021 — the last year for which figures were available — that had risen to 7.4. Values peaked in 2020, at the outset of the pandemic, at a rating of 7.5, according to surveys of some 30,000 people over time.
• Germany can no longer manufacture success
This boom period appears all the shinier in contrast to what has followed: the aftershocks of Covid-19, Russia’s invasion of Ukraine, high inflation and a general economic downturn, which were not covered by the survey.
Yet the demand for flexible working continues, with younger generations seeking to work part-time or fewer hours, and many refusing to check emails outside the office. In line with trends of recent decades, Germans worked fewer hours on average last year than anyone else across the group of 38 rich nations in the Organisation for Economic Co-operation and Development.
Although productivity remains relatively high, German workers on average also took a record 19.4 sick days last year, according to the country’s largest health insurer. In a recent YouGov poll, more than a quarter of respondents who had called in sick recently — including a third of men— admitting lying about their illness.
Suffering from rising energy costs and high interest rates, Germany slumped to become the worst-performing major economy last year, according to the International Monetary Fund (IMF), who believe this position is unlikely to change in 2024.
All this has knocked national happiness and generated political discontent towards the new centre-left coalition led by Olaf Scholz of the SPD, and many Germans are now looking with nostalgia to the Merkel years.
In the latest World Happiness Report, compiled by an international team of academics, Germany had slipped to 24th place, down from 17th five years ago.
The finance minister Christian Lindner, of the liberal Free Democrats, also voiced alarm about an apparent slacking off of the national work ethic earlier this year.
• Petrolhead minister’s drive to woo Germans with pro-car policies
“People in France, in Italy and elsewhere, they work a lot more than we do,” Lindner said, while announcing tax incentives to “make Germans fall back in love with overtime”.
Government officials have repeatedly attempted to blame Germany’s economic weaknesses on adverse circumstances, after a decade-long dependence on cheap Russian gas and oil. Scholz himself once pointed out that the Merkel-era economy benefited from the pro-market welfare-state reforms of her SPD predecessor, Gerhard Schröder.
But according to a YouGov survey published last month, only 7 per cent of German voters believe conditions have improved since the end of Merkel’s chancellorship; 61 per cent say that conditions in Germany have worsened, while 83 percent of them at least partially blame Scholz.
With state elections in Thuringia, Saxony and Brandenberg due next month, polls suggest the hard-right AfD and the left-populist Alliance Sahra Wagenknecht will gain at all three elections, causing alarm among established parties.