Breakfast Business with Joe Lynam
The clear differences between US and European workplaces
21 Nov 2025
Chapter 1: What are the key differences between US and European workplace protections?
One of the clear differences between American and European workplaces are the social protections over here. Longer maternity leave, more holidays and sick pay, as well as more generous workplace pensions. But America is growing faster and its citizens are becoming richer than us on average. So is it time we diluted some of the generous extras we take for granted here in order to boost incomes?
It was one of the themes this week at the EU's workplace research agency Eurofound, which is tucked away in Loughlinstown. And Ifeilo Kalfin is the executive director of Eurofound and is sitting in front of you. Good morning, Ifeilo. Good morning, Joe. Remind us what Eurofound does.
Eurofound does research. We are researching on the living and working conditions in Europe. We are comparing the countries, the member states of the European Union. We are looking at new developments like what happens at work with the digitalization, what are the problems in the different sectors of the economy, why there are shortages.
We try to explain this, why there is no desire or interest of the labor force to join some of the sectors. We look at the public services that are very much linked to, for example, people kept at home to care about family members rather than going to work.
Chapter 2: How does the EU's social model impact living conditions?
So we look at housing, we look at the care sector. And again, we make cross-border pan-European analysis. So you can compare the different countries for how they fare.
And this week, you're marking your 50th anniversary in Ireland with a big discussion about the European social model. And the Taoiseach went to visit you guys as well. What was the discussion about that social model? Do you think... that the social model might be too generous in Europe?
That's a very good question. Unfortunately, the answer cannot be yes or no. I mean, it's a bit more than that. First, I don't think that Europe should follow anybody else's model. I mean, if we try to become more Americans than the Americans or more Chinese than Chinese to catch up, it's not going to work.
Europe has a very unique social model and we would say that this is part of the competitive advantages of Europe. So I would look at the social model as an asset rather than as a burden for the Europeans.
Chapter 3: What insights does Eurofound provide about labor market shortages?
And I can give you some very tangible examples. I mean, the cost of inaction for the women in Europe outside of the labor market is 400 billion euro a year.
That's what it costs for not having women in the workplace.
Yes, and this is very conservative estimate. So what we put there, this is data that is taken from Eurostat. This is what is not produced if these people are staying at home. I mean, the loss in GDP growth. This is what taxes that are not paid. And this is social transfers that go to women, for example, in order to keep them at home. 400 billion, 2% of GDP.
Same figure is about 1% of GDP or about 100 billion for the needs, for the young people that are not in education or training. So, I mean, the question is...
Isn't it better to invest this so that you increase the economy, especially in a situation where you have shortages on the labour market and you still have people that are, for whatever reason, are not on the... But just playing the devil's advocate, in America they have a more sink or swim attitude.
In other words, you must work, otherwise you're really, really going to struggle, i.e. potentially starve.
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Chapter 4: Is the European social model too generous compared to the US?
We in Europe don't allow that. There is this kind of protection underneath them. But the Americans have seen more growth.
Yes, and we have to see where the growth in America comes from. It's not because of their very frugal, I would say, compared to the European social model. Both economies have two-thirds of the value created coming from services. I mean, it's another issue why Europe is losing the industrial potential. But the services in America grow much faster than in Europe. Why?
Because you have all these gigantic tech companies that are investing lots of money, private money, into research, development, etc., etc. So, I mean, if Europe tries to follow this model, then that means to create mega-European companies, to start relying very much on private investments in research and tech, I'm not sure that we are going to catch up with Americans if we do that.
On the other hand, Europe is very attractive. I mean, the fact that you can attract talents, you can attract people that are highly qualified and are happy to work in Europe comes not because of the salaries. It comes because exactly of the social model, because they would come, but they would be interested what is the
Chapter 5: What are the economic implications of women's participation in the workforce?
for their kids, what is the housing, the accessibility of that, what is the access to healthcare, etc., etc. So the European model of living, I mean, having much more integrity and human-centric approach, I would say makes this place much better to live than others.
And yet, since the Draghi report, it's fair to say that change is coming to make Europe more competitive. Hopefully, yes.
Draghi doesn't say slash the social transfer.
But he does say spend. hundreds of billions every year to make Europe more competitive.
Yes, that's true. What he speaks about is to create a genuinely common market in terms of financial markets, in terms of capital, in terms of research, ideas, patents, etc., etc., But nobody mentions cutting the social transfers. Having said that, I don't say that we have the perfect system because, indeed, I mean, social transfers, they're very much national responsibility.
So you don't have too many European policies on that because taxpayers are paying for that. European budget is 40 times lower than the national budget, the amount of the national budget. And the thing is that in many countries, probably you have much more spending that is needed.
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Chapter 6: How can Europe enhance its competitiveness in the global market?
I mean, you have spending, to give you an example, in Belgium, you have lifelong unemployment benefits, which are cut from next year, by the way.
You definitely don't have that in the United States. Thank you so much, Ifilo, for coming in. That is Ifilo Kalfin, the executive director of Eurofound, the EU research arm into the workplace.